flhrci
Final Approach
So, when you are wanting to trade or just get another car/truck/whatever, are you going to buy (finance), buy (cash), lease, or sell your children to pay for it?
David
David
When you are ready for another car poll.
- Thread starter flhrci
- Start date
EdFred
Taxi to Parking
When I was in my 20s I suspended "life." No dating no movies no traveling. I cut expenses everywhere, and the first thing I did was pay off my vehicles - truck and motorcycle. Then took that monthly payment money and every other penny and slammed it at my house, and paid that off. The goal now is to never have another loan for anything - although since I don't keep $300,000 liquid - everything except emergency fund is invested - I may need a very temporary loan to buy the next place since timing may not work out between buy/sell/close dates.
Cars boats planes whatever else - cash or I'm not purchasing.
The only way I'll finance anything is if I'm absolutely sure I can get the money to pay it off completely if SHTF and the interest rate is favorable. Otherwise it's cash or nothing. I have the ability to do almost any vehicle repair myself if need be and I can always buy a cheap beater and make it reliable enough if I need to.
- Joined
- Jul 21, 2014
- Messages
- 9,771
- Location
- Broken Arrow, OK
- Display Name
Display name:
SoonerAviator
If interest rates remain low, cash for whatever I sell my current vehicle for and finance the rest. Usually ends up with $15-20K financed over 4 years at less than 2%. My investments average a lot more than that, so it’s better to keep the cash invested. I’m not buying any vehicle over $35K so if t needed to pay it off quickly we could.
Unit74
Final Approach
- Joined
- Mar 8, 2014
- Messages
- 6,992
- Display Name
Display name:
Unit74
Nobody wants to hear this BS story any more.....
Blah, blah, blah,...cash, blah blah blah, top ramen.....
Step into the real work, em Kay?
- Joined
- Sep 26, 2011
- Messages
- 1,635
- Location
- State of Confusion
- Display Name
Display name:
chartbundle
Sorry, can't vote, since I have no children the option for "Sell Off Someone Else's Children" is missing.
Sell off an appendage?
The “steal it” option seems to be missing....
NoHeat
Final Approach
Well, the poll asked how to pay for it, and stealing isn't a way of paying.
MuseChaser
Pattern Altitude
- Joined
- Feb 23, 2019
- Messages
- 2,038
- Display Name
Display name:
MuseChaser
You don't finance the things you want unless, as one poster has already said, the money you would use to make the purchase is earning higher returns than the finance rate you can obtain. You only finance the things you ABSOLUTELY NEED (meaning, something that keeps you healthy and/or makes sure you continue to earn money) and can't pay for, and in that case you buy the cheapest version available that'll get the job done and pay it off as fast as humanly possible.
denverpilot
Tied Down
Debt-free for many years now. Not going back.
If you don't have the title in hand, you don't own it. You're just renting a massively depreciating asset, with an option to buy. Mind that gap if you total it.
If you don't have the title in hand, you don't own it. You're just renting a massively depreciating asset, with an option to buy. Mind that gap if you total it.
RJM62
Touchdown! Greaser!
- Joined
- Jun 15, 2007
- Messages
- 13,157
- Location
- Upstate New York
- Display Name
Display name:
Geek on the Hill
It really depends. I haven't paid interest on a car loan in years, and I would get full insurance coverage on a new car anyway; so if the next purchase also came with 0.0 financing, it would be kind of silly not to finance. Why lay out money that could be getting better returns literally anywhere?
The only reason I can think of would be the insurance discount for a fully-paid-off car. Last time I checked, it was less than I would make keeping the money in a money market account. From what I've been told, that particular discount goes down the longer an insured has been claim-free. But it would be something I'd check again.
Basically, I'd do some math and choose the option that made the most financial sense. But at 0.0 percent, it's hard to think of a reason not to finance other than a desire to remain debt-free for personal or philosophical reasons.
Rich
The only reason I can think of would be the insurance discount for a fully-paid-off car. Last time I checked, it was less than I would make keeping the money in a money market account. From what I've been told, that particular discount goes down the longer an insured has been claim-free. But it would be something I'd check again.
Basically, I'd do some math and choose the option that made the most financial sense. But at 0.0 percent, it's hard to think of a reason not to finance other than a desire to remain debt-free for personal or philosophical reasons.
Rich
I agree with Rich. I haven't had a car payment in four cars. I don't know if I could get sufficient funds by selling off my children, but perhaps the grandkids would net something.
I've never been offered an insurance discount for not having a car loan. A zero percent loan is enticing but often the same offer has some immediate cash benefit as well.
I've never been offered an insurance discount for not having a car loan. A zero percent loan is enticing but often the same offer has some immediate cash benefit as well.
More often than not, 0% financing is merely a marketing ploy. The profit that would have come from interest payments is simply baked into the price of the car. Try negotiating a lower purchase price and see whether they still offer 0%.
RJM62
Touchdown! Greaser!
- Joined
- Jun 15, 2007
- Messages
- 13,157
- Location
- Upstate New York
- Display Name
Display name:
Geek on the Hill
It's not so much a discount as one of the actuarial factors considered in calculating the premium. It has to do with the possibility of a driver intentionally totaling a car to get out of a loan. Or at least so I've been told.
Again, it depends. I was buying a 2016 Soul with manual transmission -- not an easy car to move -- in October of 2016. They had to get the car off the lot. I had two approvals in my pocket at 1.9 percent and asked if they could do better, and they came up with 0.0 percent. That was after the price had been agreed upon.
But yeah, most times it's just marketing. And October is almost always the best month to buy a new car.
Rich
luvflyin
Touchdown! Greaser!
Financing can make you money sometimes. Zero interest loans are common nowadays. I’ve tried to get the price down by paying cash. Dealer/salesman could care less. So I take the loan and let the money earn interest. Once I found a great deal on a car. I said I’m paying cash. The price was only available if you financed. It was a Mazda and yeah, Mazda was the lender. I asked is there a prepayment penalty. Salesman said no. I said let me see the Contract. He was lying, I don’t think intentionally though. The deal was you could pay it off after they collected a certain amount of interest. It was nominal. I put a pencil to it and did it. Made payments for just a few months and then paid it off. I was way ahead on the deal. I didn’t put a pencil to not insuring the car which is required by the lender because I’d do it anyway. Not insuring might have changed the equation
luvflyin
Touchdown! Greaser!
Yeah. Sad thing is, consumer debt drives the economy. If to many people practiced what you preach we would be in recession. Retail sales would plummet. Scratch that, depression. Scratch that to, something lower than depression. ‘ell, our entire existence as an ‘economy’ is based on being trillions of dollars in debt. IBTL
Last edited:
flhrci
Final Approach
I do not believe any one ever qualifies any way.
luvflyin
Touchdown! Greaser!
I've tried that a couple times. Didn't work. Maybe if I would have tried dealin' more it might have.
Ravioli
Ejection Handle Pulled
- Joined
- Dec 1, 2014
- Messages
- 8,021
- Location
- Somewhere else
- Display Name
Display name:
Unwanted Guest - Perma-ban Pending
And also before the lock: Huh?
Consumer debt drives the economy? Where's that coming from. Is your thesis that if the available capital for consumer purchases was limited to the total US payroll instead of the total borrowing limits of the consumers, then the economy would shatter? That's not likely.
Logically, if I make $50k and have credit cards I can spend another ~$20k. But I can't spend any of the $50k more than once, so my true spending capacity DECREASES because I'm servicing the interest on the 20k. That's not boosting consumer spending, unless you're in the financial markets collecting the interest. But the interest market isn't great either because of defaults (which happen regularly).
luvflyin
Touchdown! Greaser!
What I'm saying is people won't buy as much 'stuff'. That means less 'stuff' will be manufactured. Less 'stuff' will need to be packaged. Less 'stuff' will need to be transported. Less 'stuff' will need to be thrown away. Salesman, factory workers, truckers, pilots, train workers etc will be without jobs. Lets not forget the Storage industry where we put all the 'stuff' we have that we don't have room for. A lot of them are going to be outta work. Now all of them ain't going to be able to buy as much stuff and it continues. The strength of our economy, as we know it, is fueled by, dependent on, stuff we don't need. You have a point about no one person being able to do it continously though. But it's enough until the next crop of spenders comes along. On a lighter note.
RJM62
Touchdown! Greaser!
- Joined
- Jun 15, 2007
- Messages
- 13,157
- Location
- Upstate New York
- Display Name
Display name:
Geek on the Hill
It's not that hard, especially if you have cash for a down payment, shop in the fall, and don't really need a new car. Wait until the dealership calls you and be ambivalent about it. "I dunno. The car I have runs fine. I'm thinking about keeping it." Then reluctantly agree to look at some new one after some arm-twisting. Continue in that vein for the duration of the dealership's dog and pony show, and they'll move mountains to move cars.
In my case, because I prefer manual transmission, that's another plus. Manual transmission cars are harder to move; so come fall, when they really need to get the manual-transmission cars off the lot, they roll out the red carpet for potential buyers.
It's all a game. They want to move the cars, and the manufacturers' finance companies exist for that purpose. About a year ago, I priced the Kia Niro plug-in hybrid through Sam's Club. I got pre-approved financing offers from Kia Finance within a day. I think they were at 0.9 percent. All I would have had to do would be add a few grand to the down payment, and they would have gone down to 0.0.
I decided to wait a few years, though. Hybrid and electric car technology is advancing too quickly to trade in a car that runs fine and isn't even halfway through its warranty. I'll wait until the warranty's almost gone and take another look then.
Rich
Gary
En-Route
Out shopping for a pick-um-up truck (my retirement gift to myself). 99.99% sure I'll just pay for it. Possibility does exist to save few $ if I take advantage of a 0% financing, but, seems to me, when car shopping "cash is king". Much easier to just say cash, no trade, no financing - just trying to keep it simple. We have nearly always bought new and kept them until the repair cost outweighs the usefulness of the vehicle.
AKBill
En-Route
I have never had a "New" vehicle. Most of my vehicles start out between 5 to 10 years old. I would love a new truck, but can not justify $35 to $50K to hall my *ss around. Just bought an 8 year old GMC Sierra for $10K. I'm good with that. Traded my 97 F150 for 3 months hangar rental..
flhrci
Final Approach
Is there such a thing as "new" in Alaska? LOLI have never had a "New" vehicle. Most of my vehicles start out between 5 to 10 years old. I would love a new truck, but can not justify $35 to $50K to hall my *ss around. Just bought an 8 year old GMC Sierra for $10K. I'm good with that. Traded my 97 F150 for 3 months hangar rental..
JOhnH
Touchdown! Greaser!
His story is almost identical to mine, except that he got an earlier start and was a bit more frugal than I was. So I don't get tired of hearing those types of stories. I "hope" they provide at least a guide to other young people who don't want to end up poor. I chose that route because I didn't want to end up like my parents; always in debt to the limit. When their debts started taking too much of their income, the would go to HFC (Household Finance Company) and take out a debt consolidation loan that extended their payments ever further. They were in debt till the day they died. And I wound up shouldering way too much of that debt.
But I was lucky in one way; I had a very good State College (Ga Tech) that I could go to and pay in-state tuition. It still took me 8 years to graduate, but I graduated with zero debt (and a lot of work history for my resume).
denverpilot
Tied Down
I gotta ask: Why? None of their debt was owed by you?
JOhnH
Touchdown! Greaser!
Because I loved them and if I hadn't made some of their payments they would have been evicted or had their car repossessed. They were already skimping on decent food and medical care. By then, it was already too late for me to consider myself an enabler.
denverpilot
Tied Down
Ahh I see. I thought you meant after they were deceased.
Ah ha! That explains why you're such an upstanding fellow with his head on straight!
From one ramblin' wreck to another: TO HELL WITH GEORGIA!