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#31 bestkeeper14   Currently Playing Madden 16 CAGiversary!   4149 Posts   Joined 9.2 Years Ago  

bestkeeper14

Posted 03 September 2015 - 08:41 PM

Listen I dont want to crush this thread with this stuff…but people should look at the purchase price of the car and not the monthly payment.  Just because the monthly payment fits into your monthly budget doesn’t mean you should buy/lease a $30-40K car.  

Agreed!  No where did I ever say to look at the Payment.  The important part is the price of the car.  Which is why if you look in my original post I talked about LTV.  Do you know what LTV is?  Loan to Value, meaning the purchase price of the car.  Price of the car vs it's actual value.  So no monthly payment isn't important in that aspect, but it is still important as well to know if you can afford it.  Negotiate a lower price for the car, and the payment will go down.  One should be primary focused on the purchase price.

 

I actually just leased a 40k car, invoice was 42k, my purchase price was 40k, I then got a $5000 rebate, so purchase price was 35k.  So I am leasing for 3 years, the "amount" the car depreciates in those 3 years.  yes it is an estimate, but it is also negotiable when you turn in the car.  So long as I stay under 12,000 miles a year (I drive between 700-800 miles a month), at the end I can turn in the car without the issue of having to pay extra on the loan due to loss of value.  I can easily afford the roughly $380 a month payment for a brand new car that I enjoy driving, is covered under warranty, and provides free maintenance throughout the 3 years.  



#32 jms493   CAG Veteran CAGiversary!   113 Posts   Joined 10.3 Years Ago  

Posted 03 September 2015 - 08:50 PM

When friends/family ask me about buying a car most will end up up arguing with me on this subject 
and its fine...its your money do what you pleases you.  I did a lease and I had car loans and I finally got fed up
with making these payments for cars all the time.  I changed my ways and only look at what I can pay cash for.
if I can't write a check for it then I can't buy it.  It certainly changes my perspective on just about everything and the result of it is I have more money in the bank/investments.


#33 bestkeeper14   Currently Playing Madden 16 CAGiversary!   4149 Posts   Joined 9.2 Years Ago  

bestkeeper14

Posted 03 September 2015 - 08:57 PM

 

I dont like leasing for a few reasons.

 

  • Its the most expensive way to operate a vehicle.  The money factor when actually converted is usually higher than some interest rates.  Essentially it seems like a 7 year loan.  3 year lease then come back and buy it and get a 4 year loan....seems crazy to me.

Yes, which is why you go for a 2 or 3 year loan, you would be surprised the number of people that are doing 84 month loans now...

  • The mileage cap...which actually isn't that bad if you are turning in and buying something else.

    Yea not bad at all, again you should know if you can stay under the cap

     
  • The difficulty of getting out of the lease if something should happen early in the lease.  Most of the time you will be upside down and most people don't have the money to payoff the difference if they lose their job and need to sell the car.  Not that much different than getting a loan except you usually put a down payment when buying.

    This is the biggest negative, however same thing can happen when purchasing a vehicle, can't afford payments and may be upside down unable to trade or give back without it being repo'd
     
  • The idea of me paying all the depreciation and then giving it back for the dealer sell again seems only good for the dealer and not for the buyer.

    Then keep the vehicle, the best time to give it back is if it is way upside down and in the end the manufacturer loses money on the deal.  Heck you can even make money if you have equity by using the lease as a trade

 



#34 bestkeeper14   Currently Playing Madden 16 CAGiversary!   4149 Posts   Joined 9.2 Years Ago  

bestkeeper14

Posted 03 September 2015 - 08:59 PM

 

When friends/family ask me about buying a car most will end up up arguing with me on this subject 
and its fine...its your money do what you pleases you.  I did a lease and I had car loans and I finally got fed up
with making these payments for cars all the time.  I changed my ways and only look at what I can pay cash for.
if I can't write a check for it then I can't buy it.  It certainly changes my perspective on just about everything and the result of it is I have more money in the bank/investments.

 

And that's good for you, but the majority of America do not have the means to do that.  They may need transportation now and can't take the time to save, or can't put aside enough money to get a car in the time they need.  It is AGAIN based on each person's situation, but to think that paying cash is the ONLY way to buy cars may be great for you, but not to a majority.  And those people can take advantage of good advice in how to finance or lease a vehicle.



#35 jms493   CAG Veteran CAGiversary!   113 Posts   Joined 10.3 Years Ago  

Posted 03 September 2015 - 09:12 PM

Maybe I came in this thread a little too hot...I just want to share my view on purchasing a car.  People need to realize that taking out a car loan is taking on risk.  Life can change in a heartbeat and your job can change.  I could take out that lease with my 10 mile commute no problem until your job changes and now you are driving 40 miles each way...uh oh.
 
Anyway...I hope you can help people because there are lot of good dealers out there and a lot of scummy ones.  Unfortunatley the scummy ones ruin it for everyone.
 
Do tons of research before you go to the dealer...the internet is a wonderful place for this stuff.  Information is $$$


#36 dohdough   Sum Dum Guy CAGiversary!   6854 Posts   Joined 9.6 Years Ago  

Posted 04 September 2015 - 02:30 PM

Most of this stuff has already been covered in the CAG Car Thread, but yeah, information=$$$. You simply can't do enough research because there's always something new to learn or refresh yourself on.

 

A good community helps too. That's how I got my car for almost $1k under invoice, which is unheard of considering where I live and the car I bought. Good credit also got me a 1.74% interest rate.



#37 msjs91011  

msjs91011

Posted 29 May 2016 - 05:44 AM

This is terrible advice, unless you're wealthy or buying a clunker, most people are going to take out a loan for a car, and unless your credit is absolute garbage, it's unlikely you'll ever be paying more than 5% interest anyways, which is nothing. Personally, I've always found the best deals when buying new, as long as you have a couple grand to put for a down payment. You'll get far better financing options buying new, and dealers will frequently be able to get you under 3% on your loan. I think I pay something in the range of $300 a year in interest on my 2014 Subaru Legacy, and my payments are only $230 a month.

Lol, I paid 26% interest on mine. 3 year loan, sale value 4400, ended up paying 10402 after all was said and done. I was young, learned my lesson never took a car loan after that. I save up, walk in with X cash, (a price I decide I'm paying before I talk to a salesman - plus taxes etc) and walk out keys in hand.

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#38 inveguimi  

inveguimi

Posted 19 August 2017 - 11:27 AM

My fiancee and I currently have credit scores in the mid to high 700s, no auto loans, no credit card debt, no debt besides mortgage on our house. Our mortgage including taxes, insurance and HOA is 13 of our monthly income. We want to buy 2 used cars that financed at current rates for 60 months, the monthly payments would total 4 of our monthly income. Do you guys see any issues with our bank approving 2 separate loans at the same time?