We keep vehicles for a long time, our newest is a 2014. We have paid cash for the last 2 we have bought because those were the years or earning nothing on your savings. We did finance the Mazda for 36 months because Mazda had .9% APR and no early payoff penalty. I would use financing at a rate under 3% these days, and earn 4% on that same money from a savings account at a bank.
10 yr Auto loans....yikes!
- Thread starter ZZman
- Start date
I have seen that from Ford on their pickups. SO-spend $70,000.00 on a new pickup then you borrow "cheap money"!
A car is a depreciating asset whether it is leased or purchased on borrowed money. Funny how people think sometimes about financial things....Well, look at it this way. My most expensive car was $44,700 in 12/06. I borrowed 36 months and put $30k down. At the time, people in the office said, that's dumb. Why would you not lease the vehicle? It's a depreciating asset.
I felt there were 2 reasons. I wanted the car, and I would buy a car for about $15k, the rest is in fact just a luxury.
My desire has tapered off and the types of cars I like today, are around $115k. I'm not going to be able to put down $100k, and finance $15k. So if I had to have the car, I'd likely need a 15 year heloc
I hear this a lot. And while it sounds good on paper, the problem in practice is the people who borrow tens of thousands of dollars for a decade at 3% or more for a car "these days", have little to nothing in the bank to earn any interest on in the first place.
What kind of interest rate on that? 12-18%?Well I just got a 72 months loan with nothing down on a used EV with no remaining warranty. So I guess the world is ending
11.9% credit score low 600s
Isn’t property like this already? if you have to pay property tax, then who truly owns it? (hint, try not paying the tax to find out.)
Concur, would be an outlier scenario
Contrarian here. I am someone who keeps a vehicle for a long time. If I could get a relatively low interest loan and do it over many years, why not? Even though I have enough to pay cash, why not leave the money in the investments. Having said that, it isn't what I have done in the past: either paid cash or short term (3 years or less) loans.
Zee09
$200 Site Donor 2023
I have no problem with that.
I paid cash for many cars and as I got older I got car loans instead and bought real estate which for me was a great investment. Whatever works for you.
That's not the way it works, though. Longer the term, higher the risk, more interest you pay through the higher rate and longer amortization.
Long term loans are never cheap. Short term are.
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I would agree.
So that's paying ~40% more for the car in the end. Not what I want to sign up for really... This is for the Volt I assume?
Do you have investments expected to do better that 12% for a while?
I have no investments, no assets, and no savings. But the last car I financed, a Ford Escape, I paid off in about half the time of the loan and I intend to do that again. Just prioritizing my credit card debt first. And the Volt has saved me a ton of money on gas already.
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Go to the library for a copy of The Total Money Makeover.
