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Old 06-09-2015, 02:23 PM
 
Location: Podunk, IA
6,143 posts, read 5,172,657 times
Reputation: 7022

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Quote:
Originally Posted by JONOV View Post
Typically 60-80% of your income. Good Luck.
I was lucky. I've had the same employer for a long time.
They will pay 100% for 6 months.
After that, there's long term, but you better have some backup.
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Old 06-09-2015, 02:32 PM
 
4,684 posts, read 6,083,420 times
Reputation: 3985
Half of Americans make under $30,000 a year, which comes out to about $1600-1800 a month after taxes and health coverage.

The average cost of a new car can easily be $30k with options now, so unless they can afford $5-600 a month @48 or 60 in payments, plus another $100+ in insurance, these 72 or 84 months loans are the only way to keep their payments around $300+ a month.
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Old 06-09-2015, 04:16 PM
 
Location: Morrisville, NC
9,126 posts, read 14,671,443 times
Reputation: 9012
Quote:
Originally Posted by SandyJet View Post
I took an 84 month loan on my wife's truck when GM was offering zero percent down and zero percent financing

Truck cost 50k. I bought 50k worth of Muni bonds instead and my tax free interest stream subsidizes car loan which is all principal anyhow.

GM includes upside down protection in loan. Meaning if car gets totaled or stolen you are guaranteed the payment will be at least size of loan. I also took and 84 month warranty at purchase also with zero down.

Pretty much my wife has to just not get sick of truck for 84 months which is a long commitment
Unfortunately most people are not entering into long loans with as much thought or in the financial shape you are in. What you are doing is smart and with the 0% loan, as long as you wife does not get tired of it for 3-4 years you will probably be ahead of the depreciation curve any way and could sell.
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Old 06-09-2015, 05:45 PM
 
294 posts, read 370,724 times
Reputation: 349
Interestingly enough, I bought my car when it was brand new back at the end of May 2008. Almost 84 months ago on the dot. The idea of having a payment that long seems crazy to me. I had the cash for it, took out a loan, and paid the loan off the next day just so it would show on my credit. So much happens in 84 months. I started and finished a 4 year degree. I moved abroad and back. I lived in 3 different states in the US and worked at least as many jobs as that. I mean, geez. Good on anyone who actually makes that happen, but holy crap. Buy a cheaper car and be free sooner!
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Old 06-09-2015, 05:50 PM
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n/a posts
Quote:
Originally Posted by SAAN View Post
Half of Americans make under $30,000 a year, which comes out to about $1600-1800 a month after taxes and health coverage.

The average cost of a new car can easily be $30k with options now, so unless they can afford $5-600 a month @48 or 60 in payments, plus another $100+ in insurance, these 72 or 84 months loans are the only way to keep their payments around $300+ a month.
Yes, and that's the problem.

People buy more than they can reasonably afford.

The average shouldn't be around 30k. It's only crept up because of cheap financing and long term loans that make it possible for people to buy more car without increasing their payment.
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Old 06-09-2015, 10:53 PM
 
Location: NWA/SWMO
3,106 posts, read 3,955,468 times
Reputation: 3279
Quote:
Originally Posted by kiplingif View Post
Interestingly enough, I bought my car when it was brand new back at the end of May 2008. Almost 84 months ago on the dot. The idea of having a payment that long seems crazy to me. I had the cash for it, took out a loan, and paid the loan off the next day just so it would show on my credit. So much happens in 84 months. I started and finished a 4 year degree. I moved abroad and back. I lived in 3 different states in the US and worked at least as many jobs as that. I mean, geez. Good on anyone who actually makes that happen, but holy crap. Buy a cheaper car and be free sooner!
I have found that you need at least 6mo of payment history on a loan for it to impact your credit in a significant manner.
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Old 06-09-2015, 10:54 PM
 
Location: NWA/SWMO
3,106 posts, read 3,955,468 times
Reputation: 3279
Quote:
Originally Posted by JONOV View Post
Nope...Having it repossessed and having an added struggle to make it to treatment might be up there.



Typically 60-80% of your income. Good Luck.
I pay all of my bills (housing, electric, water, insurance, car note, land note, etc.) with 1 paycheck. The next one is for food and fun. I think I'd survive on 60-80%. Fun? No. But survival isn't about "fun".

So lets look at this on the flip side...what if my car note were $700 because I financed for 36mo instead of 78? How would THAT work out?
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Old 06-10-2015, 01:09 AM
 
5,989 posts, read 6,718,618 times
Reputation: 18480
What if you drove an old beater for a year and saved that other paycheck each month? What if after a year you sold the beater for about what you had paid for it, and bought a 3 yr old car with the savings, and continued to bank that 2nd paycheck? What if 4 yrs later, you sold that now 7 yr old car and bought your next car for cash, continued to save whatever your car payment would have been, and never had to take a car loan again?

What if you didnt do this, and someday you lost your job? You would be one paycheck away from losing your car.
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Old 06-10-2015, 05:16 AM
 
Location: Podunk, IA
6,143 posts, read 5,172,657 times
Reputation: 7022
Quote:
Originally Posted by JWG223 View Post
So lets look at this on the flip side...what if my car note were $700 because I financed for 36mo instead of 78? How would THAT work out?
What if you bought a car that was half as expensive as the one you bought and had no car payment at all for 3 years?
Then you invested the $13K you saved toward your retirement?
That could work out pretty good!
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Old 06-10-2015, 05:27 AM
 
Location: NWA/SWMO
3,106 posts, read 3,955,468 times
Reputation: 3279
Quote:
Originally Posted by eaton53 View Post
What if you bought a car that was half as expensive as the one you bought and had no car payment at all for 3 years?
Then you invested the $13K you saved toward your retirement?
That could work out pretty good!
Then I would have ended up with a car probably 5 years old and been paying out the nose to keep it on the road IN ADDITION to the cash I paid to acquire it, IN ADDITION to the pain in the arse that is rental cars, time in the shop, calling friends when I'm stranded, and all that other crap.

I can comfortably pay every bill I have on less than half my month's income. Exactly what's your issue with this, and how do you think dealing with all that junk is "working out pretty good"?
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