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Just curious cause I have friends and many people who talk about saving "money" cause they got a lower car payment but all they did is extend their loan and are always negative equity. Don't get me wrong I like vehicles, but I'm not playing that game.
So does anyone pay off their loan and later get a good deal and buy? Not buy upside down.
Unless they’re actually taking that money they “saved” and actually placed it into a account and saved it...they haven’t saved anything. They simply haven’t spent it
Last new car I bought on payment was 2004 and I paid it off in 2005. I didn’t like the payments
People often think just because the car is paid off, they have no payments. What they don't know is that the car is not going to last forever. When, not if, the time comes for a new car, they have nothing to show for. They are looking at a $40,000 purchase with no equity, no downpayment and are looking at $800/mo car payment. Those payments that they "saved" should have been set aside for the next purchase. You either pay now or pay later. There is no free motoring.
We have two fully paid off vehicles. One is a 2006 Honda Ridgeline with over 230,000 miles on it and it's still going strong. The other is a 2013 Honda Civic and we just got it over two years ago. I hate having car payments so I put down a hefty down payment and pay extra towards the car loan until it is paid off. We plan to buy a newer Honda Ridgeline next year. We will not have an 800.00 dollar truck payment. We will keep the monthly payments under five hundred a month and I will pay the loan off early. The less debt we have the better. I don't buy vehicles new and I always pay then off early, and get a good deal at the dealership. It can be done. 🙂
We paid off my Supercrew and the wifes 2017 Titanium Escape after 16 months. Just don't like making payments. We do, however, budget money per month to buy new vehicles next year so there really won't be many payments. I've learned from a bud who owns a Ford dealership to let the dealership get you the loan, then pay it off after 12 months. He can cut you a better deal over cash, get you lower interest rates(assuming good credit rating), and you get a real good recommendation on your credit reports. He makes his by getting a discount from the lender on the loan. The banks hate it though. Looking at his paperwork, the bank took about $340.00 hit on just the Escape. They didn't collect near enough interest to cover what they paid him for sending them the loan.
We paid off my Supercrew and the wifes 2017 Titanium Escape after 16 months. Just don't like making payments. We do, however, budget money per month to buy new vehicles next year so there really won't be many payments. I've learned from a bud who owns a Ford dealership to let the dealership get you the loan, then pay it off after 12 months. He can cut you a better deal over cash, get you lower interest rates(assuming good credit rating), and you get a real good recommendation on your credit reports. He makes his by getting a discount from the lender on the loan. The banks hate it though. Looking at his paperwork, the bank took about $340.00 hit on just the Escape. They didn't collect near enough interest to cover what they paid him for sending them the loan.
We just did this. We got a way better deal getting a loan through the dealer rather than paying cash. We put a big chunk down on a 2019 truck, took the Ford loan on the remainder and did a refi with our local bank before the first payment was due and got an even better rate. We'll pay it off over a year or less.
We make a payment to ourselves every month so we can replace our cars when the time comes. I also bought a 2015 SUV this year. Wrote a check. So I guess we are still making a payment, it's just to us.
Just curious cause I have friends and many people who talk about saving "money" cause they got a lower car payment but all they did is extend their loan and are always negative equity. Don't get me wrong I like vehicles, but I'm not playing that game.
So does anyone pay off their loan and later get a good deal and buy? Not buy upside down.
Wife and I paid off both of our previous vehicles. I’ve only not paid off two vehicles. The first one I just bought when I received orders to be stationed in Italy. I signed over the car and payments to a young couple just starting together. The second was a car I wrecked. All other cars were paid out in full. If you buy a decent car and keep it no less than ten years then when your vehicle is paid off transfer your monthly payment to a savings account towards emergency repairs or your next vehicle purchase. The longer you keep the vehicle without issues then the more you have put aside for that next vehicle. If you’re lucky then your next vehicle will be paid in cash instead of a loan. Thus you’ll be saving thousands of dollars in interest.
I have a 2015 Hyundai Sonata Limited, a 2015 Jeep Wrangler Rubicon and a 2016 Chevy Silverado LTZ. All bought brand new and all fully paid off. Sometime in the next year I'll be getting a 2020 or 2021 Sierra, which will be paid off within a few years at the most. My wife has a 2018 Subaru Outback Touring that's on an accelerated payoff schedule. I don't believe in forever financing.
Just curious cause I have friends and many people who talk about saving "money" cause they got a lower car payment but all they did is extend their loan and are always negative equity. Don't get me wrong I like vehicles, but I'm not playing that game.
So does anyone pay off their loan and later get a good deal and buy? Not buy upside down.
Lots of Dave Ramsey followers do, but his advice (minus the part about total abstinence from credit cards) really ought to be common sense apart from the fact that many people are simply not resistant enough to peer pressure, culturally conditioned pre-suppositions, and advertising.
You've got people like me that choose not to have car loans at all (even if that means driving an un-flashy car for several years while saving up for a better one, etc.). And then you have people who have the money but try to out-earn their loan in the stock market. IIRC, if you do the latter in the optimal way, you have something like an 80% - 85% chance of success if you can get a 0% or 0.9% interest rate; as the rate increases, the odds of winning with that strategy go down. At rates over 7% , your odds of winning with that strategy are not so good (but might still happen if you hit a bull market in the early years of the loan).
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