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New car buyers take out bigger loans, set record
- Thread starter Mr Nice
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The average car loan is $30K?
I'll NEVER finance another car in my life. PERIOD. I bought a $13K car and did a $4k downpayment ... still more than I'm comfortable with. If that means that in 10 years I'm still driving a 2000 Cherokee and 2011 Focus - so be it.
I know a few people who have financed 30K cars with only $1000 or so down. The payment is outrageous!
I have a ton of student loan debt, as well. Once i'm debt free, I'll never finance another thing (other than a house).
I'll NEVER finance another car in my life. PERIOD. I bought a $13K car and did a $4k downpayment ... still more than I'm comfortable with. If that means that in 10 years I'm still driving a 2000 Cherokee and 2011 Focus - so be it.
I know a few people who have financed 30K cars with only $1000 or so down. The payment is outrageous!
I have a ton of student loan debt, as well. Once i'm debt free, I'll never finance another thing (other than a house).
We are turning into a country of phonys, bling, LEASED instead of purchased.
Originally Posted By: HerrStig
We are turning into a country of phonys, bling, LEASED instead of purchased.
I know someone who leased a compact for $300 a month ...
We are turning into a country of phonys, bling, LEASED instead of purchased.
I know someone who leased a compact for $300 a month ...
Is there anyone out there in the real world whose nature is so delicate that their health would suffer in a Camry XLE?
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When I sold cars, nearly everyone only cared about the payment. If I could make it $350 a month, they would have financed it at 10% for 72 months and paid sticker. People with fresh bankruptcies trying to buy new $25k cars. People want nice new cars and they buy them whether they can afford them or not.
Originally Posted By: VicVinegar
When I sold cars, nearly everyone only cared about the payment. If I could make it $350 a month, they would have financed it at 10% for 72 months and paid sticker. People with fresh bankruptcies trying to buy new $25k cars. People want nice new cars and they buy them whether they can afford them or not.
and they see me rollin in my 2 older cars and think that I'm the poor one lol
When I sold cars, nearly everyone only cared about the payment. If I could make it $350 a month, they would have financed it at 10% for 72 months and paid sticker. People with fresh bankruptcies trying to buy new $25k cars. People want nice new cars and they buy them whether they can afford them or not.
and they see me rollin in my 2 older cars and think that I'm the poor one lol
non Mobile link.
http://finance.yahoo.com/news/car-buyers...dF9BRkM-;_ylv=3
Some people just 'crave' a new car every few years.
http://finance.yahoo.com/news/car-buyers...dF9BRkM-;_ylv=3
Some people just 'crave' a new car every few years.
Financing something is not always a terrible thing. It helps you build a solid credit history.
New cars are expensive. To make it worse banks are starting to extended loan terms. 72, 84, and even 96 mos. are fast becoming the new 36, 48, and 60 mos. and the used market is so inflated as of late as to make new cars comparable in price if you catch he incentives right. The gap between a used car being a better investment than a new car has narrowed or even diminished.
If you have some good investment opportunities (with ROR above the APR on your auto loan), financing isn't a terrible thing.
Just bought new Sonata GLS (Canada version has sun-roof, heated seats front/rear, leather wheel, gear shift, fog lights, alloys) for $25,700 on the road. Interest is 1.9% from Hyundai financing and payments are $448 per month for 5 years. I get to write off the interest against my income so I am at 1% interest. Yes, our marginal tax rate is up around 50%.
I have the cash but why tie that up in the car when I can borrow the money for next to nothing?
I have the cash but why tie that up in the car when I can borrow the money for next to nothing?
I bought a 2004 Saturn for $4,200 2 years ago and have put under $400 into it in repairs. Bring any new car example you want....it is NOT cheaper than buying a sub $5,000 car that is going to run well for the next 150,000 miles.
Once you pay off a car, you can trade that car, every 3 to 5 years and keep a affordable car payment. That used to be my philosophy. Now cars last up to and beyond 200,000 miles, so I have decided to buy a new one or very late model, take care of it and keep them and run them payment free, until they die and start over and run another cycle of 10 to 15 years. What I find incrediable are the number of stupid people who keep trading a car upside down. My sisterinlaw bought a new car and actually said the car dealer paid off her last car and put her in a new car. I was going to try to explain it to her, but hey, why rain on her brilliance.
Its our consumerist culture.
People with only high-school educations and not-too-great careers, somehow think they "deserve" a new car. Who cares if they can afford it - "I'm worth it".
Capitalism at its finest.
[edit] and then we can talk about needing the newest iphone and $100/month phone bills too.
People with only high-school educations and not-too-great careers, somehow think they "deserve" a new car. Who cares if they can afford it - "I'm worth it".
Capitalism at its finest.
[edit] and then we can talk about needing the newest iphone and $100/month phone bills too.
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Credit Score = I love debt score
You have to remember to factor in the depreciation in your calculations. A brand new $25,000 car at 0% interest with a no down payment sounds like a great deal, but you lose around $2000-3000 in depreciation the first year. Already, you are under water on the loan. Depending on the car you buy, depreciation can be even higher. A $38,000 Honda Odyssey loses $5000 in value the first year. That is $416 a month out the window in lost value. Your best bet is to always buy a used car 3-5 years old and pay cash. If you save $200 a month, in 4 years you have $9,600. That can buy you a nice used car.
You have to remember to factor in the depreciation in your calculations. A brand new $25,000 car at 0% interest with a no down payment sounds like a great deal, but you lose around $2000-3000 in depreciation the first year. Already, you are under water on the loan. Depending on the car you buy, depreciation can be even higher. A $38,000 Honda Odyssey loses $5000 in value the first year. That is $416 a month out the window in lost value. Your best bet is to always buy a used car 3-5 years old and pay cash. If you save $200 a month, in 4 years you have $9,600. That can buy you a nice used car.
There are ways to build credit without going into debt or paying any interest (well, only one way that I can think of, anyway). Get a credit card, use it for everyday purchases (stuff that you normally buy anyway) and pay the balance off in full every month. I went from having absolutely no credit history to having a credit score over 700 in one year without going into debt, and without paying a dime in interest. If you really want to get technical, you could say you're "in debt" from the time you make a purchase until you pay your credit card bill, but you'd just be splitting hairs IMO.
JHZR2
Staff member
Every pauper deserves all kinds of gadgets that they can't afford, plus they cant safely merge onto the highway unless they have 250hp. Didnt you get the memo?
Makes sense given that new cars are expensive. And used cars are not much cheaper so why buy someone's problems when you can get new?
My last loans were near $30k for 5 years. Paid the one off in 5 years and this one is due to be done in 4 at the end of this year. Doesn't bother me as I want a nice car. So I pay.
No different than loosing $$ on a house under the guise of an "investment". Or any other thing we buy - they all are useless after a while. It's all your priorities. Some want a nice house and others want a nice car. In the end, both are loosing propositions.
Depreciation is a red herring as it only affects you if/when you sell or trade it.
My last loans were near $30k for 5 years. Paid the one off in 5 years and this one is due to be done in 4 at the end of this year. Doesn't bother me as I want a nice car. So I pay.
No different than loosing $$ on a house under the guise of an "investment". Or any other thing we buy - they all are useless after a while. It's all your priorities. Some want a nice house and others want a nice car. In the end, both are loosing propositions.
Depreciation is a red herring as it only affects you if/when you sell or trade it.
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