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Please, please, please, *do not* "fly high". Put your "car payment" in savings once it's paid off and don't touch the money until you can pay cash for another vehicle that you will keep for a while. Do you want to pay interest your whole life or earn it?
You can fly high with an extra $457 in the bank! I don't mean I will be going around buying up fancy clothes and such. Most likely that extra money will end up going into the mortgage if I have one by then. Even with my car payment I am saving a ton of money now, so it isn't like I need to save much more liquid cash.
But do you at least admit that anyone who can afford car payments just to have a warranty can afford to escape the debt trap and pay cash, still always having a warranty? That's all I'm arguing. My comment is only meant to rebut the "car payments are necessary to have a warranty" argument.
ill agree that having a warranty is probably not a good reason to buy a new car. ive never needed to use a warranty, I always feel like they are going to claim that whatever problem it is isn't covered. but in any case, im pretty sure you can always buy a warranty.
you went into a whole scenario that seemed unrelated. my philosophy is to finance everything, put nothing down. id finance a chocolate bar over 60 months if I could. the longer money is in my pocket, the better.
Our last three cars have been 0% financing. Heck yes we financed them!
yeah, I currently have a '11 enclave and '13 forester and both of them 0% 60 month financing (0 down). every payment knocks off an equal amount of principal from the balance. ive had the enclave 2 years 3 months and the car is already worth significantly more than the loan balance. you can bet that ill never pay a penny more than the required monthly payment.
ill agree that having a warranty is probably not a good reason to buy a new car. ive never needed to use a warranty, I always feel like they are going to claim that whatever problem it is isn't covered. but in any case, im pretty sure you can always buy a warranty.
you went into a whole scenario that seemed unrelated. my philosophy is to finance everything, put nothing down. id finance a chocolate bar over 60 months if I could. the longer money is in my pocket, the better.
You are missing the point. While I agree that the warranty doesn't justify a new car, the point I am making is that even if it did, you can still buy new cars without "payments".
You are missing the point. While I agree that the warranty doesn't justify a new car, the point I am making is that even if it did, you can still buy new cars without "payments".
I guess I am missing the point because I got the feeling your last post you were looking for agreement that there is no need to buy a new car in order to have a warranty. I missed the part where you mentioned the debt trap and paying with cash. in that case, no paying with cash to avoid debt isn't a good idea. its a bad idea. if you buy a car and don't have "payments" then either your credit is bad so you would have to pay a high interest rate or you are doing something wrong. that means that if you pay $3k for a car and you don't finance it, you are doing something wrong.
debt is good. it reduces risk and helps you increase your net worth.
what? i bought a new honda last year and i think the total price was like $19k. my payments are less than $300 a month. i never wanted or cared about having a brand new car but with the lower interest rates and warranty it just made financial sense. i have purchased many old and cheap used cars in the past but the breaking down and the repair bills were not worth the hassle, esp now that i can afford the $300 a month for something more reliable. i had almost enough cash to purchase the car new but then i would have no cash! i'd rather pay the interest on the loan then have no cash in case of another emergency. and a car is a necessity, esp in locations without reliable public transportation. its not like i can just prolong the purchase until i save up the cash. i need a car to get to work every day. my previous car would not pass state inspection and would have required thousands in work to get it to that point.
the problem is that truly reliable used cars just aren't for sale these days, esp at good prices. plenty of people have stories of this or that 10-15 year old car that runs amazingly, but how many of those cars are for sale for $1k? none...no one is selling them.
We have 3 vehicles. ZERO car payments. Does not help your credit score by not owing.
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Most likely that extra money will end up going into the mortgage if I have one by then. Even with my car payment I am saving a ton of money now, so it isn't like I need to save much more liquid cash.
