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Old 12-03-2014, 01:31 PM
 
Location: Pikesville, MD
5,229 posts, read 11,481,696 times
Reputation: 4846

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Quote:
Originally Posted by Mandalorian View Post
0%/low APR financing is big for a lot of people.

I buy my cars new and loaded, but I keep them 10/15+ years. I don't need a new car every 2/3 years, so I get something I want to drive for the long run even if it costs a little more money. Any car made in the last 4 years or so should last easily 20.

I pay cash.
I don't "need" a new car every 2-3 years, but I LIKE to change up every couple years if not sooner. It's my hobby and a passion. And I like to finance at low rates and pay off early. I don't tie up my cash in a new car, though I will pay cash for the right older car, if it's one that I want (though even then, if it's a good car, I might finance for 4-5 years at a low rate and pay it off as I see fit). I tend to use the cash on hand to upgrade and modify the cars, though. As I've said, a hobby doesn't need a finacial ROI any more than a vacation trip does, though a lot of my hobby cars have paid for themselves or paid for the next one in line...

I just like too many cars to settle down to live with one forever, and I've got a million ideas for projects and customs in my head.
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Old 12-03-2014, 01:34 PM
 
Location: Living on the Coast in Oxnard CA
15,370 posts, read 25,567,363 times
Reputation: 19641
Quote:
Originally Posted by zoomzoom3 View Post
Easy, 72 and even 84 month loans are becoming more common as the prices of new vehicles increase.

Those types of loans really spread out the pain, but can really leave you upside down unless you've made a fairly large down payment. They're OK I suppose if you only put 10K miles per year on a car & just drive them until the wheels fall off.
Its funny that you mention that, A co-worker was looking into this recently. He wanted a Subaru and if he financed for 12 months the interest rate was 0.9$ If he financed for 24 months it went up to 1.9% by the time it was up to 72 months the interest rate was sitting at 4.9%. I think I was looking at it and you saved maybe $80 off your monthly bill but had to pay that amount for 12 more months. I didn't see the savings by purchasing over a 72 month period over a 60 month period. Personally it seemed to me that it would be better to just save up the money over the 60 month time frame and pay cash.

The OP wanted to know how us people that don't make $200,000 do it, well that is my story and we bought a Honda Accord earlier this year. It was a 2011 but it is nice as can be.
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Old 12-03-2014, 01:49 PM
 
Location: Vermont
10,089 posts, read 10,604,044 times
Reputation: 13438
One factor that I haven't yet seen mentioned is that lots of people with new cars don't buy them, they lease them. Generally not a good deal economically, but it is very common.
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Old 12-03-2014, 01:54 PM
 
Location: East of Seattle since 1992, originally from SF Bay Area
28,381 posts, read 50,562,503 times
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Our 2014 Escape SE 4WD was listed at $28,500 but we got it for $23,000, $3,000 for our trade and a loan at under 3% from the credit union. I can't see spending even $30,000 on a new vehicle, there are plenty of options for less and it really only takes about $300/month, you don't need to make $200k unless you are going for a Mercedes or some of the higher end Lexus models.
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Old 12-03-2014, 01:55 PM
 
Location: Pikesville, MD
5,229 posts, read 11,481,696 times
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Quote:
Originally Posted by jackmccullough View Post
One factor that I haven't yet seen mentioned is that lots of people with new cars don't buy them, they lease them. Generally not a good deal economically, but it is very common.
I've leased a few. Both MINI Coopers and the Volt are leases. Partly so that my wife is in a fun new car that has a warranty that I don't have to fix, while having the latest safety equipment, and partly so that I'm not tempted to mod them since they technically aren't "owned." And the Volt, well it was just a heavily subsidised lease, so that a $40k electric car that costs me nothing to commute with is leased like it was a $25k car. We write off the lease on the MINI as a business expense, too, since she uses it for her home based business.
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Old 12-03-2014, 01:56 PM
 
4,429 posts, read 3,103,104 times
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In Colorado on top of higher monthly payments they hit you at registration. They take taxable value of car and you have to pay a certain percentage first year and goes down a bit year after year.

On a $30K car, you're probably talking north of $1000 just to register the car first year. Second year maybe $800, etc. After 10th year it's a flat fee.

Other states have a flat fee regardless of age/cost.

So definitely cost prohibitive for those who lease or purchase NEW cars every few years.
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Old 12-03-2014, 02:02 PM
 
3,280 posts, read 3,542,348 times
Reputation: 3966
Quote:
Originally Posted by Merc63 View Post
I don't "need" a new car every 2-3 years, but I LIKE to change up every couple years if not sooner. It's my hobby and a passion. And I like to finance at low rates and pay off early. I don't tie up my cash in a new car, though I will pay cash for the right older car, if it's one that I want (though even then, if it's a good car, I might finance for 4-5 years at a low rate and pay it off as I see fit). I tend to use the cash on hand to upgrade and modify the cars, though. As I've said, a hobby doesn't need a finacial ROI any more than a vacation trip does, though a lot of my hobby cars have paid for themselves or paid for the next one in line...

I just like too many cars to settle down to live with one forever, and I've got a million ideas for projects and customs in my head.
Everyone needs a hobby and cars are certainly fun. I think this topic was directed more at the average consumer than enthusiasts.
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Old 12-03-2014, 02:04 PM
 
Location: Pikesville, MD
5,229 posts, read 11,481,696 times
Reputation: 4846
Quote:
Originally Posted by Mandalorian View Post
Everyone needs a hobby and cars are certainly fun. I think this topic was directed more at the average consumer than enthusiasts.
Oh, agreed. But someone up ahead of us said even car guys don't need to change up cars and I disagree with that, unless you can afford a huge collection and the room to put them all.
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Old 12-03-2014, 02:12 PM
 
Location: Somewhere in America
12,305 posts, read 10,044,600 times
Reputation: 20460
Bought a new Durango a few months ago. Had a down payment, a trade in, and a car loan. Piece of cake!
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Old 12-03-2014, 02:33 PM
 
Location: Raleigh, NC
1,988 posts, read 3,084,853 times
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A lot of the responses above were What Cars to Buy, and Why or Why Not Buy, but the OP's question was "HOW???"

I financed my first car with a 5 year note. (Five year notes were rare, but I had to because it was pretty expensive, and my first New car).
I lived a lifestyle that was one bump below what my income suggested and paid the car off in 3 years.
I kept the car, and kept on paying the payments only to a separate savings/investment account.

3 years later, when I sold the car, I could pay for the new one in cash. (OK, I had to get a personal lone from Mom Savings and Loan for $1k to make up the difference). I paid that off in just a few months, ... and kept on making car payments to myself..
Car2 was kept for 6 years and Car3 was paid for in cash, kept for 4 years until it was totaled.
Car4 was paid for in cash (+ insurance from the cab that hit me).

I've never taken the time to figure out how much interest I've earned vs. what I would have paid to car loans, but I'm sure it's tens of thousands of dollars.
All because I lived a small step below my Spend-All-The-Paycheck lifestyle for a few years to get ahead the first time, and from then on, maintained a reasonable financial discipline by continuing to "pay myself".
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