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The financing came from myself. I paid it out of my account with money I saved. Don't buy it if you can't afford it. You can't afford it if you don't have the money on-hand.... Weird concept right!?!
Try Self Pre-Financing.
I paid off my first car early, and had the bank continue making payments, but now into my savings/investment account and my spendable income appeared unchanged.
By the time I needed to replace that car, I could get the next for cash. Several decades and several additional cars later and I've must have saved tens of thousands of dollars that would have gone to the bank.
All it takes is several years of financial discipline at the beginning.
Curious to hear about your experiences financing – did you take a car loan? How was that process?
As you can see, there are a lot of opinions. Some of them may not apply to you, so shrug them off if they don't.
I'm a lot older - and hence richer - than you. But I remember a time when paying cash for a car was impossible. 10,000 may as well have been 10 million, for all the money I had.
If you are starting out, start cheaply, with a car reputed to have a long life. Buy a 2 year old car if you can. Honda; Toyota. Buy something you like, though, because smart people keep their cars a long time.
Try to arrange financing through your own bank. Talk to them first to see what kind of loan you can expect. The reason you do this is because the bank will give you a slightly better rate than the dealer.
I pay cash, but the last time I bought a car was 2011. We bought an '08 CR-V. Still looks new.
We're retired, thank you.
We typically go the car loan route and justify it because the plan is to keep the vehicle for 10 years minimum so the car is at the halfway or less point in its lifespan at the point when it's paid off.
We did a 0% finance offer from Subaru/Chase for our August Outback purchase. Which lets us keep the money in question in savings making more than that and also keeps us liquid. (Given the slow depreciation rate of Subarus, it didn't take much of a down payment- ended up being the maximum amount that the dealer would let us put on the card for the frequent flyer miles and then pay in full at the next statement close- to make sure we aren't upside down on the vehicle)
Toyota and to a decent extent Honda are also slow depreciators and often when you run the numbers, it's more cost effective to buy new in that kind of scenario if there's a good promotional financing offer from the manufacturer than it is to buy gently used.
Know your credit score and what number the manufacturer usually requires in order to qualify for the best financing. We're 800+ fico borrowers and cut the sale guy off when they go into 'if you qualify for...' because we will.
Part of the annoying game of dealer finance is that they want to sell you gap insurance/true coat/extended warranty for 'only another $75 per month', which adds up to a disturbing amount over the course of the loan. Decline all add-ons and if you really want an extended manufacturers warranty you typically have a couple of months to shop around from one from either the manufacturer directly or another dealer that will charge less for it.
Try Self Pre-Financing.
I paid off my first car early, and had the bank continue making payments, but now into my savings/investment account and my spendable income appeared unchanged.
By the time I needed to replace that car, I could get the next for cash. Several decades and several additional cars later and I've must have saved tens of thousands of dollars that would have gone to the bank.
All it takes is several years of financial discipline at the beginning.
You actually spent more than saved, meaning instead of taking low interest loans and investing your cash getting higher returns, you spent it. Poor use of cash.
Wealth building involves having your money work for you.
The financing came from myself. I paid it out of my account with money I saved. Don't buy it if you can't afford it. You can't afford it if you don't have the money on-hand.... Weird concept right!?!
Some people need a car to get to places, like work for example. No car, no work, no income.
Spending $150/mth for a car payment, and in return get say $2000/mth from work, is a pretty good return in my opinion, especially if the loan is hovering near zero percent.
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