Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
According to Suze Orman, lots car buyers are being downright dumb. Suze is a internationally known financial expert who has made a lot of people rich. I'm in her camp on this one because I think 60 plus month car loans are all about learning the hard way.
It's sounds like she's got a bigger gripe about the price of the car being bought than the loan.
I got that... I've never paid $30K for a car and only paid $20K one other time in 45 years of driving.
The rest have been cheaper, less than $15K. I don't want to have a bunch of money tied up in depeciating cars.
As far as the loan, she should understand that if the interest rate is low, there's no harm in dragging it out.
Any financial "expert" should be in love with cheap or even free money.
If I had taken money out of stocks to pay cash, in the market of the past few years I would've lost more than the entire value of the car!
Now, that would've been dumb. Instead, I got sub 2% car loans and left my cash were it was.
Quote:
Originally Posted by Stylo
“A car will never, ever increase in value”
My fun car would like to differ. It’s been appreciating since I bought it.
I also have one that's not depereciating.
It costs very little to keep it... the cost of insurance, maintenance and repairs has been minimal.
I like to go to car shows, so I look at it as cheap entertainment.
Suze probably blows a lot more on clothes, purses and shoes than I do on cars!
Quote:
One thing I never do is buy new. Deprecation can be worse than any loan.
I've bought 'em, but they were under circumstances that caused them to have a huge discount.
The last one was in '15. It was cheap for a pretty nice new car and I'm getting my money's worth out of it.
Much of what she’s saying is good. However each person is free to make their own buying or leasing decision. In my younger years I bought the best used car I could afford. In those days it was used GM car because of the depreciation compared to Toyota and Honda cars of the same age and miles. When I turned 46 I bought my first new car, a 2015 Hyundai Elantra. I don’t have expensive taste. It had the features I wanted for the price I wanted and I plan to keep the car for no less than ten years. My wife just bought her first new vehicle, a 2019 Hyundai Kona. She also plans on keeping it for no less than ten years. To get the features we wanted from a Honda or Toyota would have risen the price beyond our budget price.
It’s sad to see recent college graduates buying expensive new vehicles while still trying to pay their student debts. One person I know is a young doctor. He’s driving a Toyota Camry from two generations ago. Said he’ll continue to drive that car until it breaks down or his student loans are paid out, whichever comes first. Other doctors are leasing expensive cars, trucks, and or SUVs while still paying student debts.
I never really cared for her. But I understand some people need to be reassured what and what not to do with their money. She just preaches common sense. Its sad some of the things you really need to know in life, aren't taught in school.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
44,576 posts, read 81,186,228 times
Reputation: 57813
It's a matter of convenience. By the same logic a 30 year home mortgage is dumb, when a 15 year is available. Yet the 30 is far more common, because it's the only way most people can afford the payments. For some a new car is 2nd only to their home in important purchases, and the 60 or 72 month loan if under about 4% interest makes a much better vehicle possible
for those without the financial means to pay cash or get a shorter term loan. For our cars, it would be rare to go the whole term, we almost always pay it off early, when we have enough in one of our savings accounts, or sometimes trade in before paid off.
I realize a lot of people could never afford a 36 month car loan, but I really do think 60 months should be the max. If you can’t afford the payments on a 60 month loan then you need to find a more affordable vehicle.
I just bought a used car last week and I qualified for the credit unions platinum interest rate (1.7% on a used car!) thanks to my high credit score, but it made me think...is that really a 'good' financial move. 60 months for a used 2013?
Seems like most of the risk is on the credit union too...which is strange in itself??
Much of what she’s saying is good. However each person is free to make their own buying or leasing decision. In my younger years I bought the best used car I could afford. In those days it was used GM car because of the depreciation compared to Toyota and Honda cars of the same age and miles. When I turned 46 I bought my first new car, a 2015 Hyundai Elantra. I don’t have expensive taste. It had the features I wanted for the price I wanted and I plan to keep the car for no less than ten years. My wife just bought her first new vehicle, a 2019 Hyundai Kona. She also plans on keeping it for no less than ten years. To get the features we wanted from a Honda or Toyota would have risen the price beyond our budget price.
It’s sad to see recent college graduates buying expensive new vehicles while still trying to pay their student debts. One person I know is a young doctor. He’s driving a Toyota Camry from two generations ago. Said he’ll continue to drive that car until it breaks down or his student loans are paid out, whichever comes first. Other doctors are leasing expensive cars, trucks, and or SUVs while still paying student debts.
This is similar to my buying of a car over the years. I bought used cars, usually never paid more than 12K for them. I've typically had a 3 year loan for a 10K car. I keep them as long as possible which is usually about a decade.
It doesn't make sense to me to buy a 30K+ car. The average car loan now for a new car is around 30K. Considering how fast they depreciate, that's money wasted and expensive.
I agree with some of Suze Oreman's financial advice, and with this regarding cars, she's right for the average buyer out there. I know Dave Ramsey (another financial advisor) says to buy a beater for 2K or so. That's probably too restrictive since you are buying a much older car and it could have a lot of issues of breakdowns.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
