002 wrote

3PT wrote Always buy USED and pay in full

No and no.

While a used vehicle will be cheaper you will not get all the benefits of a new vehicle such as free maintenance for 5 years (often times for the whole time you own the vehicle) as well as the warranties. This isn't to say finance a $12k vehicle when you were planning to outright own one for $2k, I'm saying stay in your price range. Don't go older and used for more options, go newer for the piece of mind and remember you can buy those options off Ebay.

For the finance vs paid in full it depends. Let me break it down with numbers from my position. I took out a $10k loan at 10.74% for 5 years. I can either pay it off today and be strapped for cash but own the truck, or I can pay it off in 5 years. In 5 years at the end of my loan I will have paid $12,968, so almost $3k in interest in 5 years. However you can count inflation rates and argue that the $3k in 5 years is only worth $2,750 or what ever the math would be, but let's go with $3k. Can I spend that $10k over 5 years to make more than $3k? This doesn't have to do with buying and selling stuff but it can be as simple as buying in bulk. For it to be worth it I'd have to save or make $1.64/day for 5 years which is pretty easy. I'm not saying I can't do it with having the truck paid off, I'm saying it's easier to do so with the $10k in my pocket, plus I have a cash safety net if the economy goes bust or the truck breaks down.

PLOT TWIST!!! You settle down with a girl / guy and you want to buy a hose. You can't because you spent all your money on your car to pay it off so you have no money for a down payment.

Let's work on the same numbers in a different way. I have my $10k loan, but I pay $5k off right now. That means I only owe $5k which brings the amount of interest I pay down to $1,484. That's a very small number to spend over 5 years which is good because now I'm not paying much to keep money in my pocket and I have a cash safety net still.

Also keep in mind that financing your car gains you credit so around year 2 or 3 you could refinance the remainder of the load for a lower interest rate. Everything goes hand in hand with that too, you need credit to get a house, any sort of a loan, a good credit card, even some jobs require a good credit score.

Buying a vehicle brand new is a mug's game, there's no point when you can buy one a year old for 40% cheaper. In most cases the car is going to be mechanically sound for a long time and if not you have the 40% you saved to use on repairs.

450 wrote

002 wrote

3PT wrote Always buy USED and pay in full

No and no.

While a used vehicle will be cheaper you will not get all the benefits of a new vehicle such as free maintenance for 5 years (often times for the whole time you own the vehicle) as well as the warranties. This isn't to say finance a $12k vehicle when you were planning to outright own one for $2k, I'm saying stay in your price range. Don't go older and used for more options, go newer for the piece of mind and remember you can buy those options off Ebay.

For the finance vs paid in full it depends. Let me break it down with numbers from my position. I took out a $10k loan at 10.74% for 5 years. I can either pay it off today and be strapped for cash but own the truck, or I can pay it off in 5 years. In 5 years at the end of my loan I will have paid $12,968, so almost $3k in interest in 5 years. However you can count inflation rates and argue that the $3k in 5 years is only worth $2,750 or what ever the math would be, but let's go with $3k. Can I spend that $10k over 5 years to make more than $3k? This doesn't have to do with buying and selling stuff but it can be as simple as buying in bulk. For it to be worth it I'd have to save or make $1.64/day for 5 years which is pretty easy. I'm not saying I can't do it with having the truck paid off, I'm saying it's easier to do so with the $10k in my pocket, plus I have a cash safety net if the economy goes bust or the truck breaks down.

PLOT TWIST!!! You settle down with a girl / guy and you want to buy a hose. You can't because you spent all your money on your car to pay it off so you have no money for a down payment.

Let's work on the same numbers in a different way. I have my $10k loan, but I pay $5k off right now. That means I only owe $5k which brings the amount of interest I pay down to $1,484. That's a very small number to spend over 5 years which is good because now I'm not paying much to keep money in my pocket and I have a cash safety net still.

Also keep in mind that financing your car gains you credit so around year 2 or 3 you could refinance the remainder of the load for a lower interest rate. Everything goes hand in hand with that too, you need credit to get a house, any sort of a loan, a good credit card, even some jobs require a good credit score.

Buying a vehicle brand new is a mug's game, there's no point when you can buy one a year old for 40% cheaper. In most cases the car is going to be mechanically sound for a long time and if not you have the 40% you saved to use on repairs.

I completely agree with buy used and pay in full.

If you finance you pay more and you have to have very expensive insurance. While there are benefits of buying a new car they are not near what you will save with buying a car that is 5 years old and way way cheaper.

You also have to think about this if you borrow money and say loose your job or have major unexpected expenses you not only will not be able to afford the note/insurance they are going to repo your car and you loose all the money that you paid monthly in notes with nothing to show and your credit will take a hit making it very hard to borrow money.

Also what happens if you crash your car that you are paying a note on? Yes you will get money to fix your car from the insurance but it will skyrocket to the point you will probably not be able to pay it and your car will have take a hefty hit in price as it now has been wrecked.

If you buy your car straight out you own it. Can get whatever type of insurance you want and your car will not loose half of its value in a few years.

Overall I would say only buy what you can afford to pay in full. It may be cool to have a fresh new car but you are getting shafted hard when you take a loan. If you dont have enough money to buy a car ask any relative for a small loan to be paid back monthly and probably without any interest or the better option just save for one you can afford.

yomama9999 wrote

450 wrote

002 wrote

3PT wrote Always buy USED and pay in full

No and no.

While a used vehicle will be cheaper you will not get all the benefits of a new vehicle such as free maintenance for 5 years (often times for the whole time you own the vehicle) as well as the warranties. This isn't to say finance a $12k vehicle when you were planning to outright own one for $2k, I'm saying stay in your price range. Don't go older and used for more options, go newer for the piece of mind and remember you can buy those options off Ebay.

For the finance vs paid in full it depends. Let me break it down with numbers from my position. I took out a $10k loan at 10.74% for 5 years. I can either pay it off today and be strapped for cash but own the truck, or I can pay it off in 5 years. In 5 years at the end of my loan I will have paid $12,968, so almost $3k in interest in 5 years. However you can count inflation rates and argue that the $3k in 5 years is only worth $2,750 or what ever the math would be, but let's go with $3k. Can I spend that $10k over 5 years to make more than $3k? This doesn't have to do with buying and selling stuff but it can be as simple as buying in bulk. For it to be worth it I'd have to save or make $1.64/day for 5 years which is pretty easy. I'm not saying I can't do it with having the truck paid off, I'm saying it's easier to do so with the $10k in my pocket, plus I have a cash safety net if the economy goes bust or the truck breaks down.

PLOT TWIST!!! You settle down with a girl / guy and you want to buy a hose. You can't because you spent all your money on your car to pay it off so you have no money for a down payment.

Let's work on the same numbers in a different way. I have my $10k loan, but I pay $5k off right now. That means I only owe $5k which brings the amount of interest I pay down to $1,484. That's a very small number to spend over 5 years which is good because now I'm not paying much to keep money in my pocket and I have a cash safety net still.

Also keep in mind that financing your car gains you credit so around year 2 or 3 you could refinance the remainder of the load for a lower interest rate. Everything goes hand in hand with that too, you need credit to get a house, any sort of a loan, a good credit card, even some jobs require a good credit score.

Buying a vehicle brand new is a mug's game, there's no point when you can buy one a year old for 40% cheaper. In most cases the car is going to be mechanically sound for a long time and if not you have the 40% you saved to use on repairs.

I completely agree with buy used and pay in full.

If you finance you pay more and you have to have very expensive insurance. While there are benefits of buying a new car they are not near what you will save with buying a car that is 5 years old and way way cheaper.

You also have to think about this if you borrow money and say loose your job or have major unexpected expenses you not only will not be able to afford the note/insurance they are going to repo your car and you loose all the money that you paid monthly in notes with nothing to show and your credit will take a hit making it very hard to borrow money.

Also what happens if you crash your car that you are paying a note on? Yes you will get money to fix your car from the insurance but it will skyrocket to the point you will probably not be able to pay it and your car will have take a hefty hit in price as it now has been wrecked.

If you buy your car straight out you own it. Can get whatever type of insurance you want and your car will not loose half of its value in a few years.

Overall I would say only buy what you can afford to pay in full. It may be cool to have a fresh new car but you are getting shafted hard when you take a loan. If you dont have enough money to buy a car ask any relative for a small loan to be paid back monthly and probably without any interest or the better option just save for one you can afford.

Again, I'm not saying go out an get a loan on an $8k car when you only have $2k. What I'm saying is if you can afford to buy a $2k car, take out a loan of $2k. You have the money in the bank if you lose your job to still pay it off, but you also keep your cash safety net.

450, you will not find a year old car for 40% off what it was new. If you can then it has a ton of miles on it, or it has been wrecked and rebuilt. A year old car with 10-15k miles in normal condition would be about 20% cheaper if it's a more expensive car. If we're talking a cheaper car like a Ford Fiesta you won't save that much. For example, at a local dealer there's a brand new Fiests S for $10,925. if I go to KBB a 2016 Ford Fiesta S with the same options as the one at the dealer with 15k miles is worth $8645 which is 23.3$ cheaper.

Again guys, I'm not saying finance more than you have. What I'm saying is finance the amount you can spend on the vehicle because it is 100% worth it to give a little money of multiple years to keep your cash safety net. What if you buy your used car and now it needs CV axles? If you bought it outright you probably don't have the cash to fix it. If you took out a loan then you should have the money to fix it. And I will also say this again, if you have $10k, don't buy a used Fiesta because it has leather, buy a new Fiesta S and know that you can put in the leather / what ever other options you want down the road and have the piece of mind with free maintenance and warranties. If you only have $5k to spend, then only take out a loan for $5k.

002, I have seen cars that are next to new with around a 40% price drop but on average it's around 20%.

20% is still a big sum when spending thousands on a vehicle.

450 wrote 002, I have seen cars that are next to new with around a 40% price drop but on average it's around 20%.

20% is still a big sum when spending thousands on a vehicle.

So is the warranty. Remember that a lot of those cars are either repos, leases, or rentals. Do you think they took care of those vehicles? Some do, some don't but I would much rather buy a 10 year old car before I bought a 2 year old car. A big thing is Carfax, if it was a lease or a repo then just assume that the oil probably wasn't change and they didn't maintenance it. If it was a rental it was beaten on.