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Old 01-14-2016, 06:27 PM
 
1,950 posts, read 1,120,590 times
Reputation: 1381

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Quote:
Originally Posted by whoisjongalt View Post
Rich people ask "How much?". Broke people ask "How much per month?".
Right.... and the financially savvy of the rich, then continue to finance it.
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Old 01-15-2016, 08:18 AM
 
Location: Proxima Centauri
5,768 posts, read 3,198,301 times
Reputation: 6094
Quote:
Originally Posted by unit731 View Post
Listen to Dave Ramsey, etc.


If the new car for sale has 0% interest for a loan then you are actually losing money if you pay cash.
Well said.
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Old 01-15-2016, 08:33 AM
 
Location: The DMV
6,562 posts, read 11,200,245 times
Reputation: 8590
Finance, lease, or buy outright - these are just options. There is no absolute "right" answer to which is the better way to consume a car (or any other product you throw out there). The "right" way will depend on the buyer/lessee's financial situation and goals.

To me, being financial savvy simply means someone who makes the most out of their finances. It doesn't automatically mean they are better off financially off in general - or, it's relative. I know people who don't make a whole lot, but do well with what they have compared to their peers. I also know some wealthy people that you'd think are financial idiots (but realistically speaking, they can afford to be, so they don't really care).

In the end, the "wrong" choice would only be that if it detracted from your situation/goals.

If I want a certain car today, and I'm financially capable of (and comfortable with) paying a 15K ADM over MSRP, then writing a check for MSRP+15K ADM is the right choice for me.

If I can afford it, but like the challenge of making that money go a bit further, then taking a 0% loan and investing the rest is the right choice for me. Especially if I like to play the market.

If getting that car new for the least price possible, then waiting a year so the same model can be had for MSRP-5K is the right choice.

If I want the car, but feel it's worth only what I can get it for on the used market (and I'm perfectly fine with it), then that's the right choice.

In the end, it's not right or wrong. But right or wrong for YOU.
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Old 01-15-2016, 08:33 AM
 
18,492 posts, read 15,455,281 times
Reputation: 16145
Quote:
Originally Posted by johnd393 View Post
Never use your own money on a depreciating asset.
I don't know. I just thought I would say that.
Do you buy clothes? And keep your credit cards run up to do it?
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Old 01-15-2016, 08:37 AM
 
18,492 posts, read 15,455,281 times
Reputation: 16145
Quote:
Originally Posted by Mr.Hospitality View Post
Right.... and the financially savvy of the rich, then continue to finance it.
Depends on the interest rate offered. If a savvy rich person had $1 million in stocks and $500k in fixed income assets earning 2% annually, and was buying a $10k used car, he/she does not have to take 3% financing to be savvy, in fact it would make more sense to sell off bonds, assuming no significant tax consequences. Negative arbitrage (aka "throwing money down the toilet") is not necessary.
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Old 01-15-2016, 04:47 PM
 
Location: Vallejo
21,679 posts, read 24,828,364 times
Reputation: 18907
I prefer 0%.

If the lender won't approve you for monthly payments sufficient to buy a car, it's way too much car by a huge amount anyway. The dealer suggested a car that cost an extra $15,000 when I bought mine since they had approval for that with a stated income loan with no verification. So basically I could have just walked into the dealer with my credit scores and bought that without any income and $5,000 down instead of the $20,000 car I bought. Car loans are ridiculously easy to get basically.
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Old 01-15-2016, 05:59 PM
 
1,198 posts, read 1,782,631 times
Reputation: 1728
Quote:
Originally Posted by Malloric View Post
I prefer 0%.

If the lender won't approve you for monthly payments sufficient to buy a car, it's way too much car by a huge amount anyway. The dealer suggested a car that cost an extra $15,000 when I bought mine since they had approval for that with a stated income loan with no verification. So basically I could have just walked into the dealer with my credit scores and bought that without any income and $5,000 down instead of the $20,000 car I bought. Car loans are ridiculously easy to get basically.
Remember that deals involving spot financing are subject to verification after the sale and the loan terms can be changed or revoked outright within up to 30 days in some states.

So they'll let you off the lot with a corvette when you say you make $150k a year and have great assets, but when they go to verify that and it turns out that you fudged a bit and don't qualify they can adjust the risk or make you bring the car back.
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Old 01-15-2016, 06:19 PM
 
18,492 posts, read 15,455,281 times
Reputation: 16145
Quote:
Originally Posted by Malloric View Post
I prefer 0%.

If the lender won't approve you for monthly payments sufficient to buy a car, it's way too much car by a huge amount anyway. The dealer suggested a car that cost an extra $15,000 when I bought mine since they had approval for that with a stated income loan with no verification. So basically I could have just walked into the dealer with my credit scores and bought that without any income and $5,000 down instead of the $20,000 car I bought. Car loans are ridiculously easy to get basically.
Ok, but 0% is usually only available on NEW cars. If someone is wanting to buy a used car, their only options are to pay cash or finance and pay some interest.
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Old 01-15-2016, 06:25 PM
 
Location: Vallejo
21,679 posts, read 24,828,364 times
Reputation: 18907
Quote:
Originally Posted by MDrenter223 View Post
Remember that deals involving spot financing are subject to verification after the sale and the loan terms can be changed or revoked outright within up to 30 days in some states.

So they'll let you off the lot with a corvette when you say you make $150k a year and have great assets, but when they go to verify that and it turns out that you fudged a bit and don't qualify they can adjust the risk or make you bring the car back.
Nope. They can be, but mine wasn't. I walked in and said I made X, drove off. I did put down a decent down payment. That's generally all you need for them not to verify anything as long as credit score is good with factory lending.
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Old 01-15-2016, 06:49 PM
 
1,198 posts, read 1,782,631 times
Reputation: 1728
Quote:
Originally Posted by Malloric View Post
Nope. They can be, but mine wasn't. I walked in and said I made X, drove off. I did put down a decent down payment. That's generally all you need for them not to verify anything as long as credit score is good with factory lending.
I too have never had my 0% revoked, but I've seen it happen to others.

If they verify assets it's not something I've been made aware of, but I've definitely never provided paystubs or bank statements (then again I've never financed over $20,000.
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