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Man am I happy you put that in CAPS, I read it the first time and didn't understand...but then the CAPS made me get your point! ...
No problems yet under warranty, both cars are well maintained. If they become a $ sink I'll just get them fixed and sell, they have great resale value.
As much as I love BMW's and Audi's they don't have a great resale value.. especially after the warranty is up. For example, take an '05 Audi S4.. what was that $50k new ? I think they go for $15k-18k now.. that to me doesn't seem like a good resale value. Good resale is trucks , especially diesel trucks , that is an example of good resale.
Just me (not incl wife)
$100k
$350/mo ('12 Sonata 2.0T Limited)
$45 insurance
Lease a new car every 3 years with $0 down. I don't like buying tires, repairs, or expensive maintenance. Oil changes are included in lease, so that's all she gets. I rotate the tires every 5k miles and change air/cabin filters mid way through lease.
Who, me? Endicott? Kid Creole? Any way you look at it you're wrong...
It's really simple, actually. The vast majority of people who take out loans on vehicles are fiscal fools.
If you can afford a loan payment for a vehicle, you can just as easily SAVE that money every month, and continue doing so for a few years where you can then afford to pay cash for that new car instead of making payments on it.
Sadly, since many people don't have the will power to continue saving that kind of money every month, for several years in a row due to the "I have to have it RIGHT NOW!!!!!!!!!!!!!!!" mentality, we get a bunch of people with monthly payments that stretch them to the limits.
I hear it all the time at work...."you make such good money...why are you driving a 10 year old truck with 100K miles on it? You can go buy a brand new one with virtually nothing for a payment!"
Why not? Because in a couple more years, which the current truck will easily last through, I'll have enough in the truck fund to go buy that new one outright and not have a payment to make. Of course, I won't be able to impress my "social circle", which apparently is also a big deal to some...but then I'm also not one whining about the economy, or how the big evil banks have screwed me to the wall either, lol.
Payments - 0
Insurance - 75 a month for two cars, an '07, and a '12 (bought it in the beginning of this year, one of the remainders on the lot).
I've had car payments - never again! We save money in a mutual fund, and can pull from that when the time comes to buy a new car. Instead of paying interest on a depreciating asset, we earn money while saving up to buy said depreciating asset.
Why would somebody begin with the assumption that everyone either borrows money or enters into a lease agreement when they acquire a new car?
This.
My wife and I have a monthly set-aside for car purchase, but we don't have a car note. Instead, we save what *would* be a hefty car payment each month. Once we agree that we've saved enough (around $40K or so depending on what kind of vehicle we have in mind for our next purchase), we can either go car shopping or wait for a deal on whatever car we really want to get.
Right now, we're putting $400 away per month, but we have gone as high as $500. That's a little high for a car payment, but I don't like to have long-term debts over my head for anything besides real estate. If we were to finance a car, we'd likely arrange a shorter term and a higher payment in order to pay it off faster.
We did finance the first car we ever bought, and we hated the experience. But dealers treat you differently when they know that you can be back in a half hour with a certified check, so that's how we roll now.
If you can afford a loan payment for a vehicle, you can just as easily SAVE that money every month, and continue doing so for a few years where you can then afford to pay cash for that new car instead of making payments on it.
But what if all your savings go towards repairs and you lose days at work because of break downs by buying a POS?
Also, what if you have the money in the bank but want to take a loan out so you can keep the money for an emergency. I had a heart attack this past April and then kidney failure. I have not been able to work since then. Thank god I took a loan out when I bought my car because I can afford $200 month payments. If I had of paid cash at the time, which I could have, I would have probably lost my house this summer because I wouldn't have had that money in the bank to go towards my mortgage.
Another thing to think about as far as getting a loan for a car is that it helps to build up credit so you can get a better interest rate if you later apply for a mortgage, in which case the extra money spent in interest for a car will more then be made up for in interest saved on a mortgage.
So yes, there are some good reasons to take a loan out for a new car.
Income: Good bit more then average household income for Pittsburgh
Payment on my Corvette: $490
Payment on her Escape: $430
Insurance: ~$110/m for both vehicles
Loan
Everyone worked really hard their whole lives, and studied hard in school while working three jobs, and/or turned their lives around, is a self-made man, never borrowed a penny, is incredibly skillful at investing, wakes up at 5am to go jogging 20 miles before breakfast, doesn't suffer anyone who does anything differently. Welcome to the internet.
But what if all your savings go towards repairs and you lose days at work because of break downs by buying a POS?
Also, what if you have the money in the bank but want to take a loan out so you can keep the money for an emergency. I had a heart attack this past April and then kidney failure. I have not been able to work since then. Thank god I took a loan out when I bought my car because I can afford $200 month payments. If I had of paid cash at the time, which I could have, I would have probably lost my house this summer because I wouldn't have had that money in the bank to go towards my mortgage.
Another thing to think about as far as getting a loan for a car is that it helps to build up credit so you can get a better interest rate if you later apply for a mortgage, in which case the extra money spent in interest for a car will more then be made up for in interest saved on a mortgage.
So yes, there are some good reasons to take a loan out for a new car.
This. Some can be so judgmental with regards to folks with car loans but frankly with today's low interest rates and unstable job market (both private and public) why would I take out $40K of our cash to buy a depreciating asset when I can put down 30-40% and finance two years at a rate less than 1%, some manufacturers have ZERO interest. That is free cash folks, if you invest your money right.
We can buy any car we want cash but it is pointless for us given our investments earn us more than the low interest rate on a car note.now when car loan rates were over 4% that is a different ball game although the same principle applies.
To each his own but I think it is ignorant for some to blatantly bash those with car loans without knowing a person's full history and especially in this fiscal environment.
We earn over six figures each and have one car note for $320, one has been paid off for awhile. Our insurance is $65 a month.
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