How many of you consider your car payment to be a lifelong commitment, that is you sign that first contract for a new car. Then after some number of years, you resign a contract for the next new car and continue those monthly payments. You have no break or maybe a small break in payments but move right on to the next new car. The payments differ for each contract based on the purchase price but your affordability judgment is focused more on those payments. Is your car payment like the utility bill, just a part of life?
Lifetime car payments.
- Thread starter OneEyeJack
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Originally Posted By: OneEyeJack
Is your car payment like the utility bill, just a part of life?
For people who have no mechanical ability, yes.
Is your car payment like the utility bill, just a part of life?
For people who have no mechanical ability, yes.
Originally Posted By: OneEyeJack
How many of you consider your car payment to be a lifelong commitment, that is you sign that first contract for a new car. Then after some number of years, you resign a contract for the next new car and continue those monthly payments. You have no break or maybe a small break in payments but move right on to the next new car. The payments differ for each contract based on the purchase price but your affordability judgment is focused more on those payments. Is your car payment like the utility bill, just a part of life?
Sure, why not. A car is a depreciating asset with a cost per mile that you need to work into your budget, buy new and keep for 15 years, lease every 3, buy old junkers...all have a cost attached to them.
How many of you consider your car payment to be a lifelong commitment, that is you sign that first contract for a new car. Then after some number of years, you resign a contract for the next new car and continue those monthly payments. You have no break or maybe a small break in payments but move right on to the next new car. The payments differ for each contract based on the purchase price but your affordability judgment is focused more on those payments. Is your car payment like the utility bill, just a part of life?
Sure, why not. A car is a depreciating asset with a cost per mile that you need to work into your budget, buy new and keep for 15 years, lease every 3, buy old junkers...all have a cost attached to them.
Nope. For my primary car I pay cash and keep it for 12 + years.
Isn't that what gap insurance and car fires are for? I'm confused.
It's all about cost and what you want and need.
In my case I haven't made a car payment since 2011. But looking at my current fleet, my thought is that it might last a little longer. So a few payments (maybe one used one new) will be in the future....
Since I don't waste money on the useless stuff (90 dollar jeans, anyone?), and try to make all my stuff last-I'm not worried about car payments. ( I refuse/cannot drop that much cash at a time) Of course, there will be a down payment.
Yeah, my neighbors next door always have car payments, but they are always on the go. Husband is back in college for his masters, wife keeps the kids busy. And they both work full time.
Not everyone one does in life is going to always make sense...nor would I judge them to be stupid or wasting their money.
Who knows...maybe they have car payments and no house payments? Sometimes people live smart in different ways....
I mean, I'm committed to many things, like my wife of 16 years.
But you can't make love to a car.....
In my case I haven't made a car payment since 2011. But looking at my current fleet, my thought is that it might last a little longer. So a few payments (maybe one used one new) will be in the future....
Since I don't waste money on the useless stuff (90 dollar jeans, anyone?), and try to make all my stuff last-I'm not worried about car payments. ( I refuse/cannot drop that much cash at a time) Of course, there will be a down payment.
Yeah, my neighbors next door always have car payments, but they are always on the go. Husband is back in college for his masters, wife keeps the kids busy. And they both work full time.
Not everyone one does in life is going to always make sense...nor would I judge them to be stupid or wasting their money.
Who knows...maybe they have car payments and no house payments? Sometimes people live smart in different ways....
I mean, I'm committed to many things, like my wife of 16 years.
But you can't make love to a car.....
I can buy five brand new BMW's for cash right now if I wanted to. Fortunately, I learned long ago about depreciating assets, and I tend not to waste money on depreciating assets if I dont have to. Which is why all my cars have long been paid off and are about 10 years old. I dont NEED the latest and greatest. I just need a solid reliable, well maintained car, which is exactly what I have.
I will soon trade one of them in, in which case the new car will be paid off within 18 months and I will keep it for 10-12 years. I dont consider car payments a life time payment option.
I will soon trade one of them in, in which case the new car will be paid off within 18 months and I will keep it for 10-12 years. I dont consider car payments a life time payment option.
My 2010 Fusion is paid in full, and was paid off 5 months after I opened the loan. Unless the loan is 0.0%, or very close to it, I'm not about to keep the loan going for any longer than I have to. My 2014 Altima, which is the only car I've ever purchased brand new, came with a 60-month loan at 0.9%.. and with that low of an interest rate, my overall interest over the life of the loan is less than $400, so I'm going to simply make the monthly payments once a month until it's paid off.. It helps my credit, and doesn't really cost much. Once it's paid off, however, I'll be keeping it for at least another 4 or 5 years after it's paid for. I see no reason to buy another one.
The whole idea of being in debt over a car for the rest of my life is something I find abhorrent.
The whole idea of being in debt over a car for the rest of my life is something I find abhorrent.
Originally Posted By: bubbatime
I can buy five brand new BMW's for cash right now if I wanted to. Fortunately, I learned long ago about depreciating assets, and I tend not to waste money on depreciating assets if I dont have to. Which is why all my cars have long been paid off and are about 10 years old. I dont NEED the latest and greatest. I just need a solid reliable, well maintained car, which is exactly what I have.
I will soon trade one of them in, in which case the new car will be paid off within 18 months and I will keep it for 10-12 years. I dont consider car payments a life time payment option.
Agree 100%. Buy low mileage used, maintain it, drive it til it makes no sense to fix it. Or some moron totals it.
I can buy five brand new BMW's for cash right now if I wanted to. Fortunately, I learned long ago about depreciating assets, and I tend not to waste money on depreciating assets if I dont have to. Which is why all my cars have long been paid off and are about 10 years old. I dont NEED the latest and greatest. I just need a solid reliable, well maintained car, which is exactly what I have.
I will soon trade one of them in, in which case the new car will be paid off within 18 months and I will keep it for 10-12 years. I dont consider car payments a life time payment option.
Agree 100%. Buy low mileage used, maintain it, drive it til it makes no sense to fix it. Or some moron totals it.
I just did an analysis for my nephiew who is graduating college about buying cars. back in 2000 I was into dave ramsey and he preached buying cars with cash. I did a spreadsheet back them simulating two drivers.
One driver bought a car on 1/1/2000 and got a 20K 5 year loan at 4.5%. (some of yaull remember when loans were 12%)
driver 2 waited 5 years to buy his car and put the same amount driver 1 was paying on his loan into a CD making 1.5% APR
so in 2005 driver traded in his now paid off 5 year old car and got a new one which now cost 20% more (inflation). He got a loan for the new car price minus the trade in value. I estimated about a 30-40% trade in value if hes lucky.
Driver 2 walked in with his checkbook and bought the same car as driver 1 for the same price but paid cash. He then proceeded to put the same amount that driver 1 was now paying on his new loan into the 1.5% account to pay for his next car.
Every 5 years after that for 40 years this repeats.
In 2040, driver 2 has spent $53K less on the same cars. drier 2 bought since 2005.
Now the most important thing I told him is the different mindeset when you are paying cash vs a loan. $200 for lusterizing sealant. (loan - no problem, cash -- [censored]???) $500 floormat package!! All these little extras will get discussed when cash is getting laid out on the table vs just a signature on the page and a "few extra dollars a month."
I think this alone drives the paying cash savings better than simple interest calculations.
One driver bought a car on 1/1/2000 and got a 20K 5 year loan at 4.5%. (some of yaull remember when loans were 12%)
driver 2 waited 5 years to buy his car and put the same amount driver 1 was paying on his loan into a CD making 1.5% APR
so in 2005 driver traded in his now paid off 5 year old car and got a new one which now cost 20% more (inflation). He got a loan for the new car price minus the trade in value. I estimated about a 30-40% trade in value if hes lucky.
Driver 2 walked in with his checkbook and bought the same car as driver 1 for the same price but paid cash. He then proceeded to put the same amount that driver 1 was now paying on his new loan into the 1.5% account to pay for his next car.
Every 5 years after that for 40 years this repeats.
In 2040, driver 2 has spent $53K less on the same cars. drier 2 bought since 2005.
Now the most important thing I told him is the different mindeset when you are paying cash vs a loan. $200 for lusterizing sealant. (loan - no problem, cash -- [censored]???) $500 floormat package!! All these little extras will get discussed when cash is getting laid out on the table vs just a signature on the page and a "few extra dollars a month."
I think this alone drives the paying cash savings better than simple interest calculations.
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I know a lot of people that do this.
I am personally not a fan, but it is their money.
The only time I really agree with it is with say a single mom or elderly lady. She needs something reliable and if she has nobody to help with repairs, they'll need a fairly new car.
I am personally not a fan, but it is their money.
The only time I really agree with it is with say a single mom or elderly lady. She needs something reliable and if she has nobody to help with repairs, they'll need a fairly new car.
JTK
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Like dishdude said, since when is vehicle ownership not going to continuously cost you money, regardless of if you pay cash for it, finance or lease it?
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Buying a new car and keeping it over 10+ years it just makes sense
Buying an old model and fixing it well over 200k + makes sense too
Changing a car every now and then no way; one more thing, there are lots of overpriced/upside down cars and loans rolling down the roads; and that’s the worst situation or examples; the owners are just not aware of it or just ignorant
I remember when we wanted to by a CRV; we checked the prices and 2 dealerships were fighting for our business; in the first case everything went smooth till we hit the finance department; our bitter experience; but long story short in a grand scheme of things they wanted us to charge $33k for CRV EX-L; no way, we abandon the dealership; next week we went to the second one and the transaction was a breeze; this time with everything priced in tax, vhiecle, tag, title, interest all for $28k; of course we plan to keep it for a long haul...
Buying an old model and fixing it well over 200k + makes sense too
Changing a car every now and then no way; one more thing, there are lots of overpriced/upside down cars and loans rolling down the roads; and that’s the worst situation or examples; the owners are just not aware of it or just ignorant
I remember when we wanted to by a CRV; we checked the prices and 2 dealerships were fighting for our business; in the first case everything went smooth till we hit the finance department; our bitter experience; but long story short in a grand scheme of things they wanted us to charge $33k for CRV EX-L; no way, we abandon the dealership; next week we went to the second one and the transaction was a breeze; this time with everything priced in tax, vhiecle, tag, title, interest all for $28k; of course we plan to keep it for a long haul...
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No not me. Ca$h for the Forester ($19,600) on October 4 2008.
As a sales guy I get a car allowance. I choose to buy my vehicles and drive them until the wheels fall off or to where it doesn't make sense fixing them any longer.
I can usually get 10 years out of a vehicle with the very heavy miles I do. (This would be like 20 years for the average driver).
I either buy the vehicles new for cash or finance at lower interest than what I'm earning on my investments.
Other sales people I have worked with over the years think that they need a new car as soon as the payments are up on the current vehicle they are driving, regardless of how many miles are on it.
Justifying this decision with ... "Yeah but it will most likely break so that means I should go out and buy a new one" instead of reasoning that if the repairs are cheaper than recurring payments and it's minimal down time then why would you replace the vehicle and not continue to drive it with some repairs in mind and bank the difference in saved car payments.
I guess that is why I have 2 houses paid for at 35 and they don't.
I can usually get 10 years out of a vehicle with the very heavy miles I do. (This would be like 20 years for the average driver).
I either buy the vehicles new for cash or finance at lower interest than what I'm earning on my investments.
Other sales people I have worked with over the years think that they need a new car as soon as the payments are up on the current vehicle they are driving, regardless of how many miles are on it.
Justifying this decision with ... "Yeah but it will most likely break so that means I should go out and buy a new one" instead of reasoning that if the repairs are cheaper than recurring payments and it's minimal down time then why would you replace the vehicle and not continue to drive it with some repairs in mind and bank the difference in saved car payments.
I guess that is why I have 2 houses paid for at 35 and they don't.
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You are describing leasing.
I don't have any car payments. Giving finance companies interest payments is foolish if you don't have to. Leasing even makes less sense to me.
Payments are the American merry go round. No thanks. I have never had a car payment and never will. If I don't have the cash, I lower my sights on the level of car I will buy. I try to live debt free and other than a mortgage, did well. I can understand if your absolutely clueless about fixing your car though. If your drive junk and its in the shop all the time, it might be cheaper to buy new or almost new.
I finance typically when they have 0%, or a rate lower than what my investments are earning. When I do finance a car after the loan is paid off I continue to pay myself the monthly payments. Then when the urge bites to get another vehicle that money becomes the down payment, if I decide to finance, or goes toward the cash purchase. I stick to a very simple rule. I will never buy a vehicle that I can't pay for in full, w/o strapping myself, finance or not.
I was hoping to get away without a new vehicle but my DD just started to turn to rust. I wish they didn't salt the roads so much. If I lived somewhere that didn't have salted roads, I could get out of buying a new car ... forever! But I already have two rusted vehicles.
I wasn't going to enter back into the car payment cycle. Could have swung the new Forester. But I qualified for 0% interest and no finance charges. Figured it's worth my while to deal with payments and just do minimum down .
This one is getting krowned!
I wasn't going to enter back into the car payment cycle. Could have swung the new Forester. But I qualified for 0% interest and no finance charges. Figured it's worth my while to deal with payments and just do minimum down .
This one is getting krowned!
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