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Posted: 7/1/2014 9:52:02 PM EDT
[#1]
If building your credit is what you're after, making regular payments could certainly help with that.
You're going to get a myriad of answers so pepper your Angus IBFT "I have no debt" |
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Posted: 7/1/2014 9:55:22 PM EDT
[#2]
I would make a big enough down payment to get the monthly payments comfortable for you. Then finance the rest. Make sure that the company you get your loan with reports monthly.
If you really want to build credit get a "cash back/rewards" credit card and put a few things on it every month and pay it in full every month. Revolving accounts help build credit faster than anything.. They can also mess your credit up the fastest too if you are not responsible with them. Good luck with your auto purchase. |
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Posted: 7/1/2014 10:00:27 PM EDT
[#3]
I don't like debt, but it's almost free right now. Get into a credit union or something, you can get 1.9% or better. Make the payments. Just don't spend the money that you could have put towards the car on something else.
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Posted: 7/1/2014 10:20:29 PM EDT
[#4]
Well my 401k is going at 17% intrest toward my retirement. my car loan is currently .9% so my net gain on that 20K is 16.1%. over 3 years that is like 10K gained. ill take that any day. small down payment keep the rest semi liquid in an investment. .9% intrest rate is basicly free money(cuz inflation is at 3.5%).
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Posted: 7/1/2014 11:03:54 PM EDT
[#5]
What ever gets your the lowest interest rate. Pay as much extra but DO NOT do a principle only payment. If you have the cash pay it down to $1000 and let it sit until you have to make your final payment.
On my 1st car I paid it down to $1 and they did an auto adjust and closed the loan. All I wanted to do was have it sit on my credit it report. Building brownie points |
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Posted: 7/1/2014 11:43:16 PM EDT
[#6]
Quote HistoryQuoted:
Well my 401k is going at 17% intrest toward my retirement. my car loan is currently .9% so my net gain on that 20K is 16.1%. over 3 years that is like 10K gained. ill take that any day. small down payment keep the rest semi liquid in an investment. .9% intrest rate is basicly free money(cuz inflation is at 3.5%). Where are finding .9%? Local CUs here are at 1.75% - 2.25% depending on age. Also kudos on that return rate. Unfortunately for me any extra money I'd have would be used to pay down studen loans and not fund my 401K. |
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Posted: 7/2/2014 9:10:21 AM EDT
[#7]
Quote HistoryQuoted:
Where are finding .9%? Local CUs here are at 1.75% - 2.25% depending on age. Also kudos on that return rate. Unfortunately for me any extra money I'd have would be used to pay down studen loans and not fund my 401K. Quote HistoryQuoted:
Quoted:
Well my 401k is going at 17% intrest toward my retirement. my car loan is currently .9% so my net gain on that 20K is 16.1%. over 3 years that is like 10K gained. ill take that any day. small down payment keep the rest semi liquid in an investment. .9% intrest rate is basicly free money(cuz inflation is at 3.5%). Where are finding .9%? Local CUs here are at 1.75% - 2.25% depending on age. Also kudos on that return rate. Unfortunately for me any extra money I'd have would be used to pay down studen loans and not fund my 401K. Sounds like you are already loaded up with debt. Student loans , thinking about financing car, etc. I know there are some people who get lucky and make the spread borrowing money at a low rate and investing it at a high rate but there is risk involved. That return on your investment is not guaranteed lets say it goes down and now you are paying interest on a loan and losing money on the investment. Talk about a kick in the nuts. I will say however that people doing the spread are at least disciplined. The VAST majority of people that borrow money simply do it to buy things they can not afford. Before they know it the majority of their paychecks are going out every month for payments. Then they hit a speed bump in life like a job loss or something and they are in a huge bind. I don't borrow money. I max out my retirement plan so I get to make that 17% as well when it there only I am not borrowing money to do it. I love the fact that each month I just worry about my utility bills. Low stress and it is amazing how fast you can save up when you don't have payments. |
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Posted: 7/3/2014 9:55:26 AM EDT
[#8]
Quote HistoryQuoted:
Where are finding .9%? Local CUs here are at 1.75% - 2.25% depending on age. Also kudos on that return rate. Unfortunately for me any extra money I'd have would be used to pay down studen loans and not fund my 401K. Quote HistoryQuoted:
Quoted:
Well my 401k is going at 17% intrest toward my retirement. my car loan is currently .9% so my net gain on that 20K is 16.1%. over 3 years that is like 10K gained. ill take that any day. small down payment keep the rest semi liquid in an investment. .9% intrest rate is basicly free money(cuz inflation is at 3.5%). Where are finding .9%? Local CUs here are at 1.75% - 2.25% depending on age. Also kudos on that return rate. Unfortunately for me any extra money I'd have would be used to pay down studen loans and not fund my 401K. Why would you pay a nickle more than your regular payment on a student loan? Put the extra in a retirement account. |
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Posted: 7/3/2014 10:18:25 AM EDT
[#9]
I have financed cars in the past.
I won't do it again. Considering that gas is only going to go up, it's nice to not care what gas is priced when filling either of my vehicles. Saving $400 a month car payment is not a bad thing. If your credit score is at 700 already, I would not worry about trying to build credit. In todays world, you're ahead of the game. Credit is cheap and easy if you're not a tard, which it seems you're not. Pay cash if you can, and put what you would have as a car payment into something better. TXL |
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Posted: 7/4/2014 12:14:33 AM EDT
[#10]
Deleted
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Posted: 7/4/2014 11:37:01 AM EDT
[#11]
dave ramsey would say pay cash, get a 3-5K car for cash, sell it after a while, move up the car ladder
big houses and big cars are not good for building your wealth |
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Posted: 7/4/2014 11:53:03 AM EDT
[#12]
Quoted:
I'm fairly young, and still building credit. My current score is around 700. The question is; would it be better to pay for a vehicle in full, or make a large down payment (say 5-6K) and finance 6-8K in order to build some credit and be able to afford a little nicer vehicle? I have some time to kill so here is something else to think about. How much car are you looking at buying relative to your income? I think most people go nuts with the amount of car they buy as a ratio to the rest of their world. As an example a buddy was recently looking at buying a 19k car. He makes about 30k a year. That is insane. I didn't buy a car that cost that much until I was making over 100k a year. Cars go down in value and they do it fast. Whatever car you are buying look at a five year old one and see what it is going for. Can you afford that kind of a hit? I have found that I like to buy 2-4 year old vehicles. You can get them at a substantial discount to newer ones and can drive them 2-3 years and not take a bloodbath when you sell them. Also you can buy a pretty damn decent vehicle for 10k or less. No need to drop the big bucks on a car unless it fits well in your world. You want to own the car you don't want it to own you. |
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Posted: 7/4/2014 2:03:09 PM EDT
[#13]
Quote HistoryQuoted:
I have some time to kill so here is something else to think about. How much car are you looking at buying relative to your income? I think most people go nuts with the amount of car they buy as a ratio to the rest of their world. As an example a buddy was recently looking at buying a 19k car. He makes about 30k a year. That is insane. I didn't buy a car that cost that much until I was making over 100k a year. Cars go down in value and they do it fast. Whatever car you are buying look at a five year old one and see what it is going for. Can you afford that kind of a hit? I have found that I like to buy 2-4 year old vehicles. You can get them at a substantial discount to newer ones and can drive them 2-3 years and not take a bloodbath when you sell them. Also you can buy a pretty damn decent vehicle for 10k or less. No need to drop the big bucks on a car unless it fits well in your world. You want to own the car you don't want it to own you. Quote HistoryQuoted:
Quoted:
I'm fairly young, and still building credit. My current score is around 700. The question is; would it be better to pay for a vehicle in full, or make a large down payment (say 5-6K) and finance 6-8K in order to build some credit and be able to afford a little nicer vehicle? I have some time to kill so here is something else to think about. How much car are you looking at buying relative to your income? I think most people go nuts with the amount of car they buy as a ratio to the rest of their world. As an example a buddy was recently looking at buying a 19k car. He makes about 30k a year. That is insane. I didn't buy a car that cost that much until I was making over 100k a year. Cars go down in value and they do it fast. Whatever car you are buying look at a five year old one and see what it is going for. Can you afford that kind of a hit? I have found that I like to buy 2-4 year old vehicles. You can get them at a substantial discount to newer ones and can drive them 2-3 years and not take a bloodbath when you sell them. Also you can buy a pretty damn decent vehicle for 10k or less. No need to drop the big bucks on a car unless it fits well in your world. You want to own the car you don't want it to own you. You make 100K and only drive a 20K vehicle? Color me impressed. FYI, the price range I'm looking at is about 20% of my yearly income. |
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Posted: 7/5/2014 9:38:39 AM EDT
[#14]
Quote HistoryQuoted:
You make 100K and only drive a 20K vehicle? Color me impressed. FYI, the price range I'm looking at is about 20% of my yearly income. Actually no our current vehicle is only about 5% of our yearly income. I don't want to get into specifics but I make quite a bit more than 100k and the car is worth less than 20k. I was just saying I drove cheaper vehicles until my income was higher to where the more expensive vehicles made sense. I haven't figured out a hard rule of thumb but there is no way I would buy a car that cost over 20k unless I had a six figure income. It blows my mind what some people spend on cars relative to their income. If you are looking at vehicles 20% of your income it sounds like you are pretty conservative and will do fine. Me personally I don't get the fascination with spending huge amounts on cars. I don't want to drive around in an unreliable piece of junk but I don't need some fancy high dollar car to impress people. I work too hard for my money to throw it away on depreciating item like that. |
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Posted: 7/5/2014 2:22:11 PM EDT
[#15]
Quote HistoryQuoted:
Actually no our current vehicle is only about 5% of our yearly income. I don't want to get into specifics but I make quite a bit more than 100k and the car is worth less than 20k. I was just saying I drove cheaper vehicles until my income was higher to where the more expensive vehicles made sense. I haven't figured out a hard rule of thumb but there is no way I would buy a car that cost over 20k unless I had a six figure income. It blows my mind what some people spend on cars relative to their income. If you are looking at vehicles 20% of your income it sounds like you are pretty conservative and will do fine. Me personally I don't get the fascination with spending huge amounts on cars. I don't want to drive around in an unreliable piece of junk but I don't need some fancy high dollar car to impress people. I work too hard for my money to throw it away on depreciating item like that. Quote HistoryQuoted:
Quoted:
You make 100K and only drive a 20K vehicle? Color me impressed. FYI, the price range I'm looking at is about 20% of my yearly income. Actually no our current vehicle is only about 5% of our yearly income. I don't want to get into specifics but I make quite a bit more than 100k and the car is worth less than 20k. I was just saying I drove cheaper vehicles until my income was higher to where the more expensive vehicles made sense. I haven't figured out a hard rule of thumb but there is no way I would buy a car that cost over 20k unless I had a six figure income. It blows my mind what some people spend on cars relative to their income. If you are looking at vehicles 20% of your income it sounds like you are pretty conservative and will do fine. Me personally I don't get the fascination with spending huge amounts on cars. I don't want to drive around in an unreliable piece of junk but I don't need some fancy high dollar car to impress people. I work too hard for my money to throw it away on depreciating item like that. I agree. I see personally see no reason to drop that kind of coin on heavily depreciating asset...then again, the people who do that probably don't understand the money we put towards firearms and ammo haha. Different strokes for different folks I suppose. |
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Posted: 7/6/2014 9:00:49 AM EDT
[#16]
The quickly-depreciating car theory needs to be looked at depending on your vehicle.
I bought a 2002 Chevy Avalanche in 2010 for $12k, because it was "the right thing to do." Buy an older vehicle and let someone take the depreciation hit. My dad bought a brand new RAM truck in 2008 for a lot more money... I think it was $45k. We both bought new trucks this year. I lost the same dollar amount on my vehicle in four years ($8k) as he did in six! Not percentage wise, but actual dollars. I could have been driving around a new truck, instead of a 10 year old truck, for the same depreciation hit. This is mostly the case with trucks right now, but it's worth looking into with other cars as well. |
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Posted: 7/6/2014 9:01:47 AM EDT
[#17]
finance, get a better deal, pay it off in full
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Posted: 7/6/2014 9:15:46 AM EDT
[#18]
Quote HistoryQuoted:
I agree. I see personally see no reason to drop that kind of coin on heavily depreciating asset...then again, the people who do that probably don't understand the money we put towards firearms and ammo haha. Different strokes for different folks I suppose. Quote HistoryQuoted:
Quoted:
Quoted:
You make 100K and only drive a 20K vehicle? Color me impressed. FYI, the price range I'm looking at is about 20% of my yearly income. Actually no our current vehicle is only about 5% of our yearly income. I don't want to get into specifics but I make quite a bit more than 100k and the car is worth less than 20k. I was just saying I drove cheaper vehicles until my income was higher to where the more expensive vehicles made sense. I haven't figured out a hard rule of thumb but there is no way I would buy a car that cost over 20k unless I had a six figure income. It blows my mind what some people spend on cars relative to their income. If you are looking at vehicles 20% of your income it sounds like you are pretty conservative and will do fine. Me personally I don't get the fascination with spending huge amounts on cars. I don't want to drive around in an unreliable piece of junk but I don't need some fancy high dollar car to impress people. I work too hard for my money to throw it away on depreciating item like that. I agree. I see personally see no reason to drop that kind of coin on heavily depreciating asset...then again, the people who do that probably don't understand the money we put towards firearms and ammo haha. Different strokes for different folks I suppose. Choose carefully and the vehicle you buy can depreciate far less then the typical norm. For example, the one I am buying has had an average depreciation of about 30% over 5 years. [and used car prices for it bear that out] I tend to hold vehicles for 15 years or so and I keep them up pretty well. The one I am selling is going for about 45% of what I paid for it [almost] new and is 14 years old so the cost of ownership won't be horrible. Is it an appreciating asset, hell no it isn't but then again, neither is 99% of the goods people buy. [and that includes new guns and such] |
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Posted: 7/6/2014 3:00:57 PM EDT
[#19]
Quote HistoryQuoted:
The quickly-depreciating car theory needs to be looked at depending on your vehicle. I bought a 2002 Chevy Avalanche in 2010 for $12k, because it was "the right thing to do." Buy an older vehicle and let someone take the depreciation hit. My dad bought a brand new RAM truck in 2008 for a lot more money... I think it was $45k. We both bought new trucks this year. I lost the same dollar amount on my vehicle in four years ($8k) as he did in six! Not percentage wise, but actual dollars. I could have been driving around a new truck, instead of a 10 year old truck, for the same depreciation hit. This is mostly the case with trucks right now, but it's worth looking into with other cars as well. I agree there are variables within the markets and sometimes there are strange situations. Around 2004-5 I bought a used diesel pickup that was a 2002 I think. I Drove it two years and put probably 50k miles on it. I sold it after two years for more than I paid for it. I got a really good deal when I bought it and when I was selling it happened to be in high demand. |
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Posted: 7/6/2014 3:45:04 PM EDT
[#20]
Quote HistoryQuoted:
Choose carefully and the vehicle you buy can depreciate far less then the typical norm. For example, the one I am buying has had an average depreciation of about 30% over 5 years. [and used car prices for it bear that out] I tend to hold vehicles for 15 years or so and I keep them up pretty well. The one I am selling is going for about 45% of what I paid for it [almost] new and is 14 years old so the cost of ownership won't be horrible. Is it an appreciating asset, hell no it isn't but then again, neither is 99% of the goods people buy. [and that includes new guns and such] Quote HistoryQuoted:
Quoted:
Quoted:
Quoted:
You make 100K and only drive a 20K vehicle? Color me impressed. FYI, the price range I'm looking at is about 20% of my yearly income. Actually no our current vehicle is only about 5% of our yearly income. I don't want to get into specifics but I make quite a bit more than 100k and the car is worth less than 20k. I was just saying I drove cheaper vehicles until my income was higher to where the more expensive vehicles made sense. I haven't figured out a hard rule of thumb but there is no way I would buy a car that cost over 20k unless I had a six figure income. It blows my mind what some people spend on cars relative to their income. If you are looking at vehicles 20% of your income it sounds like you are pretty conservative and will do fine. Me personally I don't get the fascination with spending huge amounts on cars. I don't want to drive around in an unreliable piece of junk but I don't need some fancy high dollar car to impress people. I work too hard for my money to throw it away on depreciating item like that. I agree. I see personally see no reason to drop that kind of coin on heavily depreciating asset...then again, the people who do that probably don't understand the money we put towards firearms and ammo haha. Different strokes for different folks I suppose. Choose carefully and the vehicle you buy can depreciate far less then the typical norm. For example, the one I am buying has had an average depreciation of about 30% over 5 years. [and used car prices for it bear that out] I tend to hold vehicles for 15 years or so and I keep them up pretty well. The one I am selling is going for about 45% of what I paid for it [almost] new and is 14 years old so the cost of ownership won't be horrible. Is it an appreciating asset, hell no it isn't but then again, neither is 99% of the goods people buy. [and that includes new guns and such] Good advice. I picked up a 1998 Toyota Tacoma 4x4 in 2002 for 9.5k. It had 80k miles at the time. Sold it two years ago with 245k miles for 3.5k. 6k for 10 years use and 165k miles aint bad. I also subscribe to the driving a modest vehicle theory. Unless you are in a line of work where you deal with a bunch of shallow assholes who are impressed by your driving a 7 series bmw, there really isn't a need. IMO, a vehicle is a tool used to get my ass from point A to B, and I've found that the cheaper ones usually do so more reliably than the more expensive ones. |
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Posted: 8/4/2014 8:31:48 AM EDT
[#21]
Regardless of how you pay for the vehicle. Buy it online. I buy several cars per year, and almost always they are much cheaper online.
https://amexnetwork.truecar.com/main.html I have used American Expresses car site with great success in the past. |
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Posted: 8/5/2014 2:47:05 PM EDT
[#22]
pay cash.
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Posted: 8/6/2014 10:14:51 PM EDT
[#23]
Quoted:
I'm fairly young, and still building credit. My current score is around 700. The question is; would it be better to pay for a vehicle in full, or make a large down payment (say 5-6K) and finance 6-8K in order to build some credit and be able to afford a little nicer vehicle? Check it out, I used to work for State Farm and this is the advice I gave people in your situation, and what I will be doing myself when I go to sell my old truck and get a new vehicle. Go for the large down payment. Here is why. If you buy a car for, say, $10,000 and put a $2,000 down payment and finance 8000 for 3 years, you pay $223 a month, plus interest. If you put $6,000 down and finance $4,000 for 3 years, you pay $111 a month, plus interest. If you put more money down, you save on interest. BUT what is even BETTER, is that whether you pay $223 a month for 3 years or $111 a month for 3 years, it will all have the same affect on your credit score. Financing less saves you money on the interest, and it keeps your monthly payment low, so if a tough month comes along, you aren't struggling to pay a car loan. |
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Posted: 9/12/2014 11:54:28 PM EDT
[#24]
Quote HistoryQuoted:
pay cash. at today's interest rates, why would you pay cash if you can put your money for more benefit elsewhere? it's a different story when car loans are once again at 7%. but today they are not. ar-jedi |
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Posted: 9/14/2014 5:03:25 AM EDT
[#25]
Quote HistoryQuoted:
You make 100K and only drive a 20K vehicle? Color me impressed. FYI, the price range I'm looking at is about 20% of my yearly income. Quote HistoryQuoted:
Quoted:
Quoted:
I'm fairly young, and still building credit. My current score is around 700. The question is; would it be better to pay for a vehicle in full, or make a large down payment (say 5-6K) and finance 6-8K in order to build some credit and be able to afford a little nicer vehicle? I have some time to kill so here is something else to think about. How much car are you looking at buying relative to your income? I think most people go nuts with the amount of car they buy as a ratio to the rest of their world. As an example a buddy was recently looking at buying a 19k car. He makes about 30k a year. That is insane. I didn't buy a car that cost that much until I was making over 100k a year. Cars go down in value and they do it fast. Whatever car you are buying look at a five year old one and see what it is going for. Can you afford that kind of a hit? I have found that I like to buy 2-4 year old vehicles. You can get them at a substantial discount to newer ones and can drive them 2-3 years and not take a bloodbath when you sell them. Also you can buy a pretty damn decent vehicle for 10k or less. No need to drop the big bucks on a car unless it fits well in your world. You want to own the car you don't want it to own you. You make 100K and only drive a 20K vehicle? Color me impressed. FYI, the price range I'm looking at is about 20% of my yearly income. i do. |
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Posted: 9/15/2014 1:03:35 PM EDT
[#26]
Quote HistoryQuoted:
at today's interest rates, why would you pay cash if you can put your money for more benefit elsewhere? it's a different story when car loans are once again at 7%. but today they are not. ar-jedi Quote HistoryQuoted:
Quoted:
pay cash. at today's interest rates, why would you pay cash if you can put your money for more benefit elsewhere? it's a different story when car loans are once again at 7%. but today they are not. ar-jedi I just got 1.8% on a new car. No way I'm paying that off early! |
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Posted: 9/15/2014 1:13:59 PM EDT
[#27]
Where can you get guaranteed returns greater than that right now?
Sure the market should do a lot better than 1.8% but that is not guaranteed. |
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Posted: 9/15/2014 1:26:59 PM EDT
[#28]
Quote HistoryQuoted:
Regardless of how you pay for the vehicle. Buy it online. I buy several cars per year, and almost always they are much cheaper online. https://amexnetwork.truecar.com/main.html I have used American Expresses car site with great success in the past. What about the quality of the purchase? Do you visit the dealership prior to buying for a test drive? |
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Posted: 9/15/2014 2:58:19 PM EDT
[#29]
Quote HistoryQuoted:
at today's interest rates, why would you pay cash if you can put your money for more benefit elsewhere? it's a different story when car loans are once again at 7%. but today they are not. ar-jedi Quote HistoryQuoted:
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pay cash. at today's interest rates, why would you pay cash if you can put your money for more benefit elsewhere? it's a different story when car loans are once again at 7%. but today they are not. ar-jedi To each his own. I personally would rather have a simplified life. Not having a million payments to make and worry about credit frees up emotional energy to actually look for deals that make real money. I never bought into the borrowing money cheap to invest and possibly make more money. 1. The APR is not the whole cost. Generally there are late fees, pay by phone fees, early termination fees, extra insurance costs, etc. and THOSE are where they make most of the money. There is a way to avoid them if you walk the thin line, but it takes too much research and effort to do that in my book. You spend all your time researching and watching your back among a bunch of creditors and it sucks up your free time that could be spent looking for cheap houses, cheap stocks, a better paying job etc. 2. If your income ends abruptly, you can lose more than you had to start. I would rather make a little less (its not that much less), but know I can keep it all in emergencies. |
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Posted: 9/15/2014 7:53:26 PM EDT
[#30]
Quote HistoryQuoted:
To each his own. I personally would rather have a simplified life. Not having a million payments to make and worry about credit frees up emotional energy to actually look for deals that make real money. I never bought into the borrowing money cheap to invest and possibly make more money. 1. The APR is not the whole cost. Generally there are late fees, pay by phone fees, early termination fees, extra insurance costs, etc. and THOSE are where they make most of the money. There is a way to avoid them if you walk the thin line, but it takes too much research and effort to do that in my book. You spend all your time researching and watching your back among a bunch of creditors and it sucks up your free time that could be spent looking for cheap houses, cheap stocks, a better paying job etc. Quote HistoryQuoted:
To each his own. I personally would rather have a simplified life. Not having a million payments to make and worry about credit frees up emotional energy to actually look for deals that make real money. I never bought into the borrowing money cheap to invest and possibly make more money. 1. The APR is not the whole cost. Generally there are late fees, pay by phone fees, early termination fees, extra insurance costs, etc. and THOSE are where they make most of the money. There is a way to avoid them if you walk the thin line, but it takes too much research and effort to do that in my book. You spend all your time researching and watching your back among a bunch of creditors and it sucks up your free time that could be spent looking for cheap houses, cheap stocks, a better paying job etc. why the heck would you be paying late fees etc? here toy go: http://www.ar15.com/forums/t_1_5/1656027_I_think_my_opinion_on_debt_is_changing_.html&page=3#i48860712 Quoted:
2. If your income ends abruptly, you can lose more than you had to start. I would rather make a little less (its not that much less), but know I can keep it all in emergencies. i don't know if you realize this, but you just made a strong argument for *not* paying cash. ar-jedi |
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Posted: 9/15/2014 8:49:43 PM EDT
[#31]
FWIW, https://www.lightstream.com currently has very low rate personal and auto loans, w/ easy terms, even better by 0.50% rates w/auto-pay. That sounds like what the OP might be looking for, to build credit and pay the vehicle off over whatever time is appropriate w/a large down payment. I also agree with ar-jedi, if you can redirect these interest bearing vechicle payments to tax qualified investments your probably better off in the LT. Additionally, I've no affiliation with this lender, please use this info at you own peril. Good Luck.
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Posted: 9/16/2014 4:41:17 AM EDT
[#32]
Quote HistoryQuoted:
why the heck would you be paying late fees etc? here toy go: http://www.ar15.com/forums/t_1_5/1656027_I_think_my_opinion_on_debt_is_changing_.html&page=3#i48860712 i don't know if you realize this, but you just made a strong argument for *not* paying cash. ar-jedi Quote HistoryQuoted:
Quoted:
To each his own. I personally would rather have a simplified life. Not having a million payments to make and worry about credit frees up emotional energy to actually look for deals that make real money. I never bought into the borrowing money cheap to invest and possibly make more money. 1. The APR is not the whole cost. Generally there are late fees, pay by phone fees, early termination fees, extra insurance costs, etc. and THOSE are where they make most of the money. There is a way to avoid them if you walk the thin line, but it takes too much research and effort to do that in my book. You spend all your time researching and watching your back among a bunch of creditors and it sucks up your free time that could be spent looking for cheap houses, cheap stocks, a better paying job etc. why the heck would you be paying late fees etc? here toy go: http://www.ar15.com/forums/t_1_5/1656027_I_think_my_opinion_on_debt_is_changing_.html&page=3#i48860712 Quoted:
2. If your income ends abruptly, you can lose more than you had to start. I would rather make a little less (its not that much less), but know I can keep it all in emergencies. i don't know if you realize this, but you just made a strong argument for *not* paying cash. ar-jedi How so. If I pay cash no one can take my car or my home if I stop making payments. With debt you can lose the car house and still be bound to pay the difference when the bank auctions it to someone with real money. It happens. Watch some documentaries on the depression. Lots of people investing on debt lost everything because they where too leveraged. I don't go anywhere close to that. I have however bought some properties and equipment for cheap from folks needing to sell in a hurry because they got in trouble doing exactly what you are recommending. Or bought at auction after couldn't make payments at 60% value. I have an uncle who had to downsize in house in the 90s abruptly playing leverage investing. He didnt learn his lesson. Every time I talk to I'm he's got some scheme about opening big personal loans to start some business or buy some house. A little debt is not horrific i guess but it just doesn't gain rewards worth the risk or complications. |
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Posted: 9/16/2014 10:00:37 AM EDT
[#33]
Quote HistoryQuoted:
Where can you get guaranteed returns greater than that right now? Sure the market should do a lot better than 1.8% but that is not guaranteed. Besides the fact that its lower than inflation if I do -nothing- with it... Why even give up access to the full lump sum? That can be a handy emergency account if nothing else for a very small price. ("Cash on hand" has a benefit and therefore a cost) And if not an emergency account, then you have capital available if some kind of opportunity comes up (the land you always wanted goes on sale, the market tanks and you can invest on sale, you decide you want to start your own business, etc.) It may not be worth it to you, but I like having flexibility and don't mind paying a small amount for it. YMMV |
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Posted: 10/11/2014 5:26:55 PM EDT
[#34]
Quote HistoryQuoted:
How so. If I pay cash no one can take my car or my home if I stop making payments. With debt you can lose the car house and still be bound to pay the difference when the bank auctions it to someone with real money. It happens. Watch some documentaries on the depression. Lots of people investing on debt lost everything because they where too leveraged. I don't go anywhere close to that. I have however bought some properties and equipment for cheap from folks needing to sell in a hurry because they got in trouble doing exactly what you are recommending. Or bought at auction after couldn't make payments at 60% value. I have an uncle who had to downsize in house in the 90s abruptly playing leverage investing. He didnt learn his lesson. Every time I talk to I'm he's got some scheme about opening big personal loans to start some business or buy some house. A little debt is not horrific i guess but it just doesn't gain rewards worth the risk or complications. Quote HistoryQuoted:
Quoted:
Quoted:
To each his own. I personally would rather have a simplified life. Not having a million payments to make and worry about credit frees up emotional energy to actually look for deals that make real money. I never bought into the borrowing money cheap to invest and possibly make more money. 1. The APR is not the whole cost. Generally there are late fees, pay by phone fees, early termination fees, extra insurance costs, etc. and THOSE are where they make most of the money. There is a way to avoid them if you walk the thin line, but it takes too much research and effort to do that in my book. You spend all your time researching and watching your back among a bunch of creditors and it sucks up your free time that could be spent looking for cheap houses, cheap stocks, a better paying job etc. why the heck would you be paying late fees etc? here toy go: http://www.ar15.com/forums/t_1_5/1656027_I_think_my_opinion_on_debt_is_changing_.html&page=3#i48860712 Quoted:
2. If your income ends abruptly, you can lose more than you had to start. I would rather make a little less (its not that much less), but know I can keep it all in emergencies. i don't know if you realize this, but you just made a strong argument for *not* paying cash. ar-jedi How so. If I pay cash no one can take my car or my home if I stop making payments. With debt you can lose the car house and still be bound to pay the difference when the bank auctions it to someone with real money. It happens. Watch some documentaries on the depression. Lots of people investing on debt lost everything because they where too leveraged. I don't go anywhere close to that. I have however bought some properties and equipment for cheap from folks needing to sell in a hurry because they got in trouble doing exactly what you are recommending. Or bought at auction after couldn't make payments at 60% value. I have an uncle who had to downsize in house in the 90s abruptly playing leverage investing. He didnt learn his lesson. Every time I talk to I'm he's got some scheme about opening big personal loans to start some business or buy some house. A little debt is not horrific i guess but it just doesn't gain rewards worth the risk or complications. Scenario 1: You have the cash for a 30,000 car. You spend it on the 30,000 dollar car. The next year, you lose your job. That's 20+ thousand you can't access - a sunk cost. Scenario 2: You have the cash for a 30,000 car. You buy the car on installment, paying 2% APR, for, say, 300 dollars a month. The next year, you lose your job. You tap into that 30K you still have (though it is probably over 31,000 by now), and you can keep going with those payments for some time, as well as make you house payments, utility payments, etc. while seeking out new employment. |
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Posted: 10/12/2014 1:14:33 AM EDT
[#35]
Scenario 3
Spend 10k on a used car, keep 20k in your emergency fund incase you loose your job. I really doubt most people on this site are spending 30k cash on a brand new vehicle. From what I see at gun shows people spend 5k on a car, spend the other 25k on guns and ammo and beef jerky. |
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Posted: 10/13/2014 3:18:42 PM EDT
[#36]
I bought a new Toyota Prius last year and financed at 0% for 60 month through Toyota Motor Credit.
Plenty of other automakers offer similar financing at different times of the year. You can buy a Sub 15K ford sedan and probably find 0% for 72 months. |
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Posted: 10/15/2014 7:43:43 PM EDT
[#37]
Quote HistoryQuoted:
Scenario 1: You have the cash for a 30,000 car. You spend it on the 30,000 dollar car. The next year, you lose your job. That's 20+ thousand you can't access - a sunk cost. Scenario 2: You have the cash for a 30,000 car. You buy the car on installment, paying 2% APR, for, say, 300 dollars a month. The next year, you lose your job. You tap into that 30K you still have (though it is probably over 31,000 by now), and you can keep going with those payments for some time, as well as make you house payments, utility payments, etc. while seeking out new employment. Scenario 3: If you have 30k cash and you put 15k in an emergency fund and you buy less car at 15k new car or used car. When you lose your job you have 15k to survive on before you run out of money. BUT the 15k lasts you longer because you only have insurance, food, taxes, electric as bills. No debt payments Even if you run out of cash no one can take your car, no one can take your house. You have extremely low risk of going into negative territory. All you need is money to eat and pay property taxes. If you really feel like going back into debt later, take a loan when you actually need it. This is how i live my life. Beholden to no one. If i lose my job, I have really no stress beyond missing out on some extra 401k contributions I would have made that year if i had worked the extra time. WHen I work, I increase my net worth. When I'm out of work, i dont have to worry about decreasing my net worth, or going into negative territory. |
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