exb00st

Interweb high rollahz, son.

QUIKAG

If they pay $25k for a Civic, then they should be slapped upside the head. Excluding the $25k Civic, I think this couple should finance two vehicle purchases and that is why I prefaced my statement with "after the first or second car purchase, you should try to pay cash or have the ability to pay cash."

By pay cash, I mean have liquid assets (cash, CD, equities/bonds, etc. in after-tax non-retirement funds). However, if you can get a higher yield with your investments than it would cost for a low-interest vehicle financing, then you should consider financing the car if you're good with money (and won't blow through the money you would have otherwise used to pay cash for the vehicle.)

vader1

Yes and no. I just took out a loan on the Highlander I purchased because I could not pay cash for it. It does not put a strain on my finances and I also put over 30% of my gross into retirement accounts. (just to watch it lose value apparently)

I shoot for retirement at 55, so I choose to stash every penny I can into these accounts, and use low rate financing and make car payments. Whether or not the decision to make payments and stash money away is better than stashing less and paying cash depends on the rate of return I earn, but I usually come out ahead this way. And I do not stretch my finances to buy vehicles, its a dumb investment.

Thats not to say that I did not do that a LOT in my twenties. I am a former $30k millionaire.

asiliat

Rats, I'm still a $30K million, and I have a GTI, the S, and my 929RR bike. Then there's the house payments. Man, I'm living on borrowed time.

The bank owns EVERYTHING!

Thanks guys, way to make my morning....

TheDonEffect

Yeah, the finance guy is the worst, when we were getting the girlfriend's tC, we got the right price and what not, and the dumb**** tried to charge us 24% interest when we already preapproved for the 0% and 2.9% that Toyota and Honda were offering respectively (cuz we were shopping new at first). Goodness friggin gracious, I still think the rate was a lil higher than I wouldve liked (so I guess he wins) but it was right at market levels at the time anyway without using a credit union or whatever. He actually asked what did I know? I said, uhm, bought three cars, a house, and probably know more about managing my 401K than you do.
So in a fit of rage we got up and was actually walking out, not leveraging, then the sales guy sorta gave him a look, he sighed, and said hold on (it was 930 at night at this point) and gave us a better rate. This was probably all staged of course.
But yeah, I used to be all for being civil with guys just doing their jobs, but car sales guys I'm gonna start treating like scum if they keep trying to dick on people and take advantage of the undereducated. I mean it's one thing to charge full price and selling that it's a deal when the market shows it's selling for well below, it's another to offend you about your credit and intelligence or sell you something that should/already is in included. Like those mechanics who used to sell window dressing or blinker fluid, we joke about these things but there's a reason why we talk about it; I remember being in kindergarten and my mom was complaining about her squeaking wipers, took it to the dealer and the dealer said she needed a new windshield, which she grudgingly bought.

TheDonEffect

Lol, maaaan, I should be doing that before I'm 30, not like my 401k is growing no matter how much I throw at it (man, dollar cost averaging really is a lesson in patience, lol). But yeah, using leverage appropriately is sound financial planning, you can either pay off car quickly and in the end of the term wind up with that depreciating asset, or save and invest it and in the end of the term still have all that money growing. Still, being free from debt has huuuuuuge perks, but you gotta wonder would you rather have a 20K note or a 20K lump in your 401K, I guess it all comes down to your source of income.

st4rk

airgate

...but just think...if you were to die tomorrow, at least you enjoyed the time you had here, right?

Reminds me of that story where the retired Telecom worker saved and saved. After his retirement, he ordered the Cadillac of his dreams...a week before it arrived, he died of a heart attack.

NFRS2K3

Just had to comment on the dog in your sig. That's the funniest thing I have seen in a while. I almost pissed myself laughing

airgate

Haha, that made me LOL!