How Much of Your Car Should You Finance? Zero percent.

[Slimprofits]

Re: Took your advice - very pleased.

Would anyone recommend getting the extended warranty from the dealer?

Regards,

jim

Starting point for that conversation is, how long do you plan to keep the car for?

[jimdice]

Re: How Much of Your Car Should You Finance? Zero percent.

At least three years.

jim.

[Guest]

Re: How Much of Your Car Should You Finance? Zero percent.

This thread gets my emphatic vote as the most terminally dull and boring thread ever posted to iTulip.

[ 55,000 page views, and counting! :eek: ]

[jimdice]

Re: How Much of Your Car Should You Finance? Zero percent.

Well unfortunately, while Rome burns, people in other parts of the world still have to get to work...

jim

[Guest]

Re: How Much of Your Car Should You Finance? Zero percent.

Yeah sorry Jim. Did not mean to get on your case. Congrats on your supercheap deal for a high end car. Maybe I should do something like that, but I can't stay focused on this topic long enough to execute it. Mine is a generalized frustration with people (55,000 of them apparently) who when it comes to CARZ exhibit all of the fascination with this topic which we all had when we were 18 years old. What is it about CARZ anyway? On a side note, I "drive" a little turbodiesel Jetta that gets 47 miles per gallon (I gas up about once every five weeks) and yet I live four blocks away from my place of work! I never get to drive any freaking where! That's no fun! I guess I drive about 3000 miles a year, and I've got one of the most economical vehicles possible for when petroleum goes to $400 a barrel. Except it didn't, so I wound up buying the super fuel efficient car for nuthin'! :mad:

Well unfortunately, while Rome burns, people in other parts of the world still have to get to work...

jim

[Slimprofits]

Re: How Much of Your Car Should You Finance? Zero percent.

Jim will you get to 100,000 miles in the three years?

You need to look at the cost of the warranty and measure it against possible repairs.

There is probably no need to buy your extended warranty from the dealer. I think you can almost always get the same coverage for less with an aftermarket warranty. Infiniti might have a program that is similar to Hondacare. I bought my Honda at a dealer in California along with an offer for their third-party warranty, but paid considerably less for true Hondacare (service at any Honda dealership) from another dealership in Massachusetts that serves the aftermarket.

You might be better off, even with low interest rates, depositing money on a regular basis in an interest bearing account for the same period and saving that for possible repairs. No repairs and you keep all of the cash.

[Chris]

Re: How Much of Your Car Should You Finance? Zero percent.

This was the first iTulip article I ever read and because of it i proudly drove a rusty, 998cc 'shitbox' for the last couple of years. Until today; when I purchased a brand new diesel motor for the wife (cash) which turns in an impressive 80mpg on combined cycle. Powered on biodiesel and with no road tax to pay, this baby will be one cheap motor to run.

Thanks EJ!

[photoncounter]

Re: How Much of Your Car Should You Finance? Zero percent.

This was the first iTulip article I ever read and because of it i proudly drove a rusty, 998cc 'shitbox' for the last couple of years. Until today; when I purchased a brand new diesel motor for the wife (cash) which turns in an impressive 80mpg on combined cycle. Powered on biodiesel and with no road tax to pay, this baby will be one cheap motor to run.

Thanks EJ!

Same here -- first article I read on this site (thanks to my manager for introducing me to itulip). Drove an old 92 Honda (college car) with no regrets for 2 years after graduation, although I was fortunate enough to start working as soon as I graduated. Part of the money saved went in to buying some real yellow stuff.

I have passed on this article to few other friends, who have also benefited. I think this article must be handed to college grads on their graduation or by the employer along with the company manual or something.

Thanks to EJ and itulip.

[don]

Re: How Much of Your Car Should You Finance? Zero percent.

I too have passed this approach on to many and you can gauge by the hefty percentage that look at you in disbelief where their finances lie.

[BiscayneSunrise]

Re: How Much of Your Car Should You Finance? Zero percent.

dude you are going for the...



prize.

Now that was one of your funnier ones MM. After seeing this thread revived, I am now aware of why Lukester was so disliked.

[Slimprofits]

Re: How Much of Your Car Should You Finance? Zero percent.

http://www.bloomberg.com/news/2013-1...ift-sales.html

As the fifth anniversary of the Federal Reserve’s policy of keeping interest rates near zero approaches, the market for subprime borrowing is once again becoming frothy, this time in the car business. As with mortgages in 2006 and 2007, the central bank’s stimulus is making it easier for people with spotty credit to buy cars as yield-starved investors purchase riskier bonds linked to auto loans.
While surging light-vehicle sales have been one of the bright spots in the U.S. economy, it’s increasingly being fueled by borrowers with imperfect credit. Such car buyers account for more than 27 percent of loans for new vehicles, the highest proportion since Experian Automotive started tracking the data in 2007. That compares with 25 percent last year and 18 percent in 2009, as lenders pulled back during the recession.

[touhy]

Re: How Much of Your Car Should You Finance? Zero percent.

http://www.bloomberg.com/news/2013-1...ift-sales.html

As the fifth anniversary of the Federal Reserve’s policy of keeping interest rates near zero approaches, the market for subprime borrowing is once again becoming frothy, this time in the car business. As with mortgages in 2006 and 2007, the central bank’s stimulus is making it easier for people with spotty credit to buy cars as yield-starved investors purchase riskier bonds linked to auto loans.
While surging light-vehicle sales have been one of the bright spots in the U.S. economy, it’s increasingly being fueled by borrowers with imperfect credit. Such car buyers account for more than 27 percent of loans for new vehicles, the highest proportion since Experian Automotive started tracking the data in 2007. That compares with 25 percent last year and 18 percent in 2009, as lenders pulled back during the recession.

What could go wrong. Bernack/Yellen knows what he/she is doing.

[ljaycox]

Re: How Much of Your Car Should You Finance? Zero percent.

Indeed, a VP Sales can't get away with driving a beater. For anyone with a job where a show car is justified because it's expected (e.g., a meaningful portion of income depends on appearances), a used luxury car is still the right way to go. For example, a three year old BMW M3 just off lease with 30k miles on it (that is, just broken in) can be had for $35,000 vs $49,000 new. Consistently avoiding the 30% haircut you get for buying new, even with cash, for the first 2 to 3 years of ownership... over time, this really adds up.

If you make enough money, you can drive whatever you want. One of the other things you can buy with financial independence is the right to eccentricity, and owning a car that's less expensive than the car everyone knows you can afford is one of them. Warren Buffett drives a Lincoln Town Car with a license plate that reads: "THRIFTY". The car's cost is a rounding error on the return he earns on his wealth daily.

I'm thinking of adopting the eccentric's car look... a Toyota Corolla or Honda Civic, because I'm concerned about pollution and fossil fuel consumption. Fifty percent of the pollution generated by a car is created in producing a car, so if I'm worried about pollution, I don't buy a new Pruis (rhymes with "Pious"), but buy a used Toyota Corolla or Honda Civic, and drive it slowly. That and an old truck, and replace the FX with the two–the Corolla for getting around, the truck for hauling stuff.

What do you think?

EJ, that is exactly my program. 05 Accord bought used for 35% of new (original receipt in glove box, and an 01 Tundra. We are rehabbing a 100 year old house so the truck is a necessity. I also bought a used scooter as my main get around town vehicle so the truck gets driven very little. I have never liked high transportation outlays. It is much more environmentally friendly to buy something older and use it as little as possible. Always cash of course, but when you buy a vehicle at 3-5 years old they are a great bargain. Our Honda and Toyota experience shows that, properly maintained, these vehicles can easily last 15-20 years.

[loweyecue]

Re: How Much of Your Car Should You Finance? Zero percent.

I agree with the sentiment of the thread only in case of looking at a car as an investment. I never look at cars as an investment. Yes I do borrow money to buy a car and in my opinion I am paying for the utility I get out of having the car. I have no interest in selling it either, because have owned all my cars till they are ready to be donated. I guess I am saying how you chose to live is a personal thing and should not be judged only from a financial POV.

[aaron]

Re: How Much of Your Car Should You Finance? Zero percent.

I agree with the sentiment of the thread only in case of looking at a car as an investment. I never look at cars as an investment. Yes I do borrow money to buy a car and in my opinion I am paying for the utility I get out of having the car. I have no interest in selling it either, because have owned all my cars till they are ready to be donated. I guess I am saying how you chose to live is a personal thing and should not be judged only from a financial POV.

Wow, this is an old thread. The world has changed. It was an interesting one (I am not looking for new cars).


Perhaps buying a very fuel efficient car, right before the Second Great Inflation, using credit, might be a good "bet"? There are good financing deals around (under 0-3% is what you want). So long as inflation will not cause your company to have to lay you off, you should eventually have a higher salary and/or you can sell the car for more than you paid.