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I won't go into too much detail here ... Mainly, what my DW and I would like to understand is: "Is it easier to deal with car dealers while we're still working? Or, should we wait until we're retired to replace our oldest vehicle"?
It seems pretty sensible to me that dealers (and lending institutions) are "in it for the money", and so would be more inclined to 'deal' with you when you have regular, earned-income to show them; like your latest pay stub, or something. Once we retire, we'll still have regular income ... just nowhere-near the level we have coming in, right now.
It sounds reasonable but, has anyone experienced anything different from this line of thought? Please don't hesitate to "weigh-in" about this, 'cause I told DW that I would ask-around about it.
You answered your own question. When will u be the better credit risk? That will drive the interest rate you pay. We have purchased two cars and a second home in retirement, however we had fixed income streams and had maintained a high credit scores in retirement. You indicate you will have lower income how will the car impact your debt to income level after you retire?
We bought our "retirement" car when our truck and sedan started acting up. Both were 10+ years old. So we were about 14 months early but we have no regrets. Honda CRV. Just adore it.
I had my full income and husband had retirement income. I did not want to finance a car after retirement as income is only 1/3 of wages until I get my SS anyway.
We have purchased two cars and a second home in retirement,
however we had fixed income streams and had maintained a high credit scores...
Which raises the question of whether someone needs to finance these sorts of purchases...
or whether they able to choose to finance them -- as a cash management technique.
I take the position that if financing is needed then too much car (or house) is in the picture
and that these folks need to trim the sails a bit.
First, I never want to finance anything else for the rest of my life.
But second, I don't want to HAVE to but another car for the rest of my life. I just spent the last month getting my 29 year old convertible street ready again. After I get it to everyday dependable, I will start working on my truck that sprung a leak a month ago. After that, I MAY purchase a kit car and try to make it electric.
I know most people are not into working on cars, so I would just leave it at - purchase straight out.
Which raises the question of whether someone needs to finance these sorts of purchases...
or whether they able to choose to finance them -- as a cash management technique.
I take the position that if financing is needed then too much car (or house) is in the picture
and that these folks need to trim the sails a bit.
Why? Credit union interest rates were under 2 percent. Why on the mortgage? I got below market rates and could have paid cash multiple times? It is no different than my working years and didn't need to tie money up that could have and is invested. It is all in the numbers even if they need to finance. Some high income retirees need to finance because of their liquid asset level.
Why do I bring it up?
Because many people aren't in the position to choose that you are.
And the OP asked us to: Please don't hesitate to "weigh-in" about this
Even at low interest rates it's a continuing monthly debt obligation...
and one that too often will end up being for more car or more home
than is really appropriate relative to their overall net worth and financial condition.
Why do I bring it up?
Because many people aren't in the position to choose that you are.
Even at low interest rates it's a continuing monthly debt obligation...
and one that too often will end up being for more car or more home
than is really appropriate relative to their overall net worth and financial condition.
Agreed, now you are differentiating based on circumstances instead of never. Also there are couples that are pension/SS wealthy with little debt and without sizable liquid assets this can create the need to finance
You answered your own question. When will u be the better credit risk? That will drive the interest rate you pay. We have purchased two cars and a second home in retirement, however we had fixed income streams and had maintained a high credit scores in retirement. You indicate you will have lower income how will the car impact your debt to income level after you retire?
... Thanks for your reply, TuborgP ... It's as I suspected ... Right now, our debt to income ratio is definitely lower; we own everything outright, except for the house. From what we know about what we'll be able to afford in retirement, buying a decent used car will impact our credit worthiness. That's something we need to consider.
I didn't believe I was very far-off the mark about "financing", and that's what I told my DW while we were looking at vehicles, today ...
Thanks for that bit of confirmation. As I kind-of said, neither of us has had car payments for quite a long time. For us, it's a big decision!
We bought our "retirement" car when our truck and sedan started acting up. Both were 10+ years old. So we were about 14 months early but we have no regrets. Honda CRV. Just adore it.
I had my full income and husband had retirement income. I did not want to finance a car after retirement as income is only 1/3 of wages until I get my SS anyway.
... Your planning, and our planning appear to be similar. We want a "retirement" vehicle to travel in, since our older ones are well-past 100K miles, each, and kind-of uncomfortable on the road.
We don't want to finance a vehicle, but our credit union has some pretty-good rates, and we can get financing for 60-months on a used car. I don't think I got "60-months" when I bought my new Exploder, back in '98!
The more I look at advice from y'all on City-Data, the more comfortable I'm becoming with getting another vehicle financed before I retire ... which will be in a few, short months!
Thank You!
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