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You couldn't have timed this better. In another post on here (today I think) someone expressly mentions the point I'm trying to make:
Just think, had he just gone out and bought a cheapie new car in 2013 and instead of the money he blew on those other cars (at least $10k between the cars and mx costs from his posts) he would most likely own the car outright, with 60,000 miles, and only be three years old with seven years left on the powertrain warranty. Instead he's $17k in debt on his current car with another couple thousand on his credit card from trying to fix the last beater (all it $20k).
Only if he had the crystal ball to know in advance that the repair costs would be so astronomical.
You couldn't have timed this better. In another post on here (today I think) someone expressly mentions the point I'm trying to make:
Just think, had he just gone out and bought a cheapie new car in 2013 and instead of the money he blew on those other cars (at least $10k between the cars and mx costs from his posts) he would most likely own the car outright, with 60,000 miles, and only be three years old with seven years left on the powertrain warranty. Instead he's $17k in debt on his current car with another couple thousand on his credit card from trying to fix the last beater (all it $20k).
Dude that is the worse example possible. That poster is on the verge of bankruptcy and has to significantly change his/her life in terms of getting a roommate, making more money, and trying to manage all of the DEBT PAYMENTS that they have.
They made a bad problem worse, by signing up for a damn near $500 a month car note. That poster has been making a series of stupid financial decisions for the last 6 years. More debt after more debt, more spending after more spending, without the damn INCOME STREAM to cover it.
Only if he had the crystal ball to know in advance that the repair costs would be so astronomical.
It's like I'm talking to a brick wall here.
I'm telling you guys (and gals) that this is reality. I have seen it over, and over, and over again. It's a sad story, one that repeats itself over and over again. The fact is you refuse to see it, that's fine, I can't make the horse drink the water, I can only lead them to it.
jotucker actually recommended a nine year old Chrysler PT w/ 100,000 miles on it! LOL!!
I'm telling you guys (and gals) that this is reality. I have seen it over, and over, and over again. It's a sad story, one that repeats itself over and over again. The fact is you refuse to see it, that's fine, I can't make the horse drink the water, I can only lead them to it.
jotucker actually recommended a nine year old Chrysler PT w/ 100,000 miles on it! LOL!!
Yes, that is a car the OP can afford, it's from a good dealer, has a SOLID Car Fax, and runs solid in terms of the operating components. It does the job in getting the OP from work to school. It's not a piece of trash beater.
But hey, if people want to listen to your advice.....hell....let them. They will end up like Serious Conversation, the OP in the link you posted. They will end up in debt to their eyeballs without the income to cover it.
They will end up UNDERWATER on a vehicle, which is where you owe more on the outstanding balance for the car loan, than the damn car is WORTH. You know what I call that? I call that STUPID. But you apparently call that SOUND FINANCIAL JUDGMENT.....so hell, if people want to follow your "sound financial judgment", go right ahead!
I'm telling you guys (and gals) that this is reality. I have seen it over, and over, and over again. It's a sad story, one that repeats itself over and over again. The fact is you refuse to see it, that's fine, I can't make the horse drink the water, I can only lead them to it.
jotucker actually recommended a nine year old Chrysler PT w/ 100,000 miles on it! LOL!!
Your subjective impressions don't align with the real data. Look at any car, almost, new vs. 5 years old, on Edmunds.com/tco.html and see that the repair costs don't go up to such astronomical levels typically. I don't care what your experience is, human experience is subjected to enormous biases as any introductory psychology class can demonstrate. Real data wins, hands down.
If my interest rate is over 10%, I simply will not get the car. I am running my credit score to see what it actual is. If a my score is bad and interest is too high, I will just simply wait. I want a 2014-2015 car, but not at the price of high interest rate.
Thanks
An interest rate over 2% is high in this market. You are willing to go up to 9%?
That is insane to me... sorry.... no disrespect. I'm not understanding your thinking on this issue.
Your subjective impressions don't align with the real data. Look at any car, almost, new vs. 5 years old, on Edmunds.com/tco.html and see that the repair costs don't go up to such astronomical levels typically. I don't care what your experience is, human experience is subjected to enormous biases as any introductory psychology class can demonstrate. Real data wins, hands down.
Yes but if you depreciate the cost of a 5 year (or 1 or 2 or 3 or 4 year) old car you'll find the decline in value is almost completely linear (in some cases with very little decline in value at all). While it may cost "thousands" less than a new one it will also last x years/miles less. You're trading less money now for less useful life, which in the end won't really save any money, and also taking a much bigger risk owning the car at the end of its life vs the beginning.
In addition, you're moving the goalposts. We're not talking about buying a five year old car, a car JO suggested was almost twice that age at 9 years with 100,000 miles, and as a triple whammy was a Chrysler product. That statistically is quite different than what you suggest doing. That line of thinking works well with used luxury cars but not so great with the regular Toyotas and Hondas of the everyday American fleet.
The OP is thinking his credit score is 550. Before setting foot in a dealership, the OP needs to find out EXACTLY what his credit score is. Most dealers pull an auto-enhanced version of the FICO score so for example, if someone has handled installment loans well but had some difficulties paying credit cards on time, their auto-enhanced score may be ok. My overall credit isn't that great but I've had a lot of well-paid car loans so I'm able to get close (but not quite) to the best terms, especially on new vehicles where the manufacturer subsidizes the financing (aka promotional rates such as 0%, 1.9%, 2.9%, etc).
If the OP's credit score is indeed in the mid 500's, now is not the time to buy their dream car since they are almost certainly looking at an interest rate somewhere in the neighborhood of 15-25%. In that case, I'd say they should keep what they have unless it's on it's last leg and costing a fortune to repair. If that is the case and the OP doesn't have at least $4-6k to buy a RELIABLE used car, then I would suggest buying a basic small Kia, Hyundai, Chevy, or similar vehicle.
Make EVERY payment on time for a year and it will most likely be possible for the OP to refinance into a better loan or consider trading if the negative equity isn't a killer and can be offset with a cash down. Bottom line-do not roll negative equity into another loan! If the OP is stuck with a high interest loan and does not put down a SUBSTANTIAL (40-50% down) down payment-GAP insurance is a must! New vehicles depreciate substantially the minute their driven off the lot. God forbid if the vehicle is involved in an accident or stolen and declared a total loss, insurance will only pay what the replacement cost is. Bottom line-if replacement cost is $10k and you owe $13k, you are on the hook for the other $3k unless you have GAP insurance. All of my vehicles have that coverage.
Good luck to the OP and may I suggest having a friend or family member go with you when you're looking at cars. Don't hesitate to think things over.
In addition, you're moving the goalposts. We're not talking about buying a five year old car, a car JO suggested was almost twice that age at 9 years with 100,000 miles, and as a triple whammy was a Chrysler product. That statistically is quite different than what you suggest doing. That line of thinking works well with used luxury cars but not so great with the regular Toyotas and Hondas of the everyday American fleet.
I remember when I was climbing up the financial ranks, trying to get my "stuff" together.
- I bought a 1997 Mercury Villager, about $2,400 at the time and kept it for about 18 months. It had about 100k miles on it. The only major repair was an axle, which was about $300. It had decent fuel economy and it got me from work, to school, to recreation, to light traveling, to back home.
- After that, I traded it in to get a 2005 Dodge Neon. I still was around the same financial situation but just wanted a "nicer" car. Kept that one for about another 18 months give or take. It had about 100k miles on it. No major repairs done on it. Great fuel economy. Got me from work, to school, to recreation, to light traveling, to back home. The car was about $2,850. Within 18 months of having this car, my financial status was set, it was the year 2011 and I bought a 2011 Dodge Charger OUT OF POCKET (no note), including the car itself, the chrome accessories and the chrome wheels. Also that Charger wasn't brand spanking new, it had miles on it, so it allowed me to save in the purchase price.
I bought both of these vehicles in the same fashion that I recommended to the OP, which was using Auto Trader, and examining the inventory of reputable dealers within a 20 - 50 mile radius. I examined Car Faxes of the vehicles to make sure the vehicles were in good shape, as well as looked at the pictures of the exterior of the vehicle.
Your goal isn't anything fancy.....your goal is a decent looking car, without ANY major operating issues, that can get you from work, to school, to back home. UNTIL your financial situation improves, that's all the hell you should be purchasing.
But again, like I said, I'm not about to keep going back and forth with you. If the OP wants to follow your stupid advice of buying a NEW car for $15,000 ($12k with a 7% rate, with a 7 year term) then go right ahead. Hell....just don't come back on this forum OP saying you followed "wheel's advice" and are now underwater on the car and you are struggling to make payments. Because I will hop my tail right up here and say I TOLD YOU SO.
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