If you don't mind me asking...

If you really want to be like the rest of America, buy a barge from Malorn

 

Which brand barge would you like? Looks like I am being thrown under the bus again. :blink:

 

Monthly payment $0, fuel costs only. Used some of the profit from equity gain in house sold last year.

 

That should be about right at apx 4.5% financing 31,000 for 60 months (simple interest) Just a word of caution to you StarBrite310 and others dont allow the dealer to speak in terms of payments they are easily manipulated to conceal price increases and add ons deal with the real cost and make sure you read your contract the top will include federaly required disclosures that show amount financed, APR total payments and finance charges (Regulation Z) make sure these terms as well as the rest on the contract are acceptable because once you sign you are pretty well stuck to whatever they had on that contract.

 

Same here, and I don't care to tap into my home's equity in order to purchase a car. I'd rather it stay where it is so we can use it to buy our next home in a year or so. I've got more than enough $$ for the monthly car payments, so I have no problem parting with it.

 

Good idea, don't use your house to buy a car...

 

Why not... if you need a car and need to finance using the equity in your home to do so allows you to (in some cases) to have a lower rate as well as make the interest tax deductible... if you ahve the equity and need to make the purchase it beats a car loan IMHO.

 

While I know everyone does it, technically I don't think you're supposed to deduct home equity interest if it wasn't used for home improvements. Secondly, I keep the home equity available for emergencies since we don't have a particularly liquid savings account we can draw upon. Lastly, we got a pretty good rate from Toyota, and with the home equity loan being varialble rate, it's shot up in the past couple of years.

 

A car is not an investment. A house is an investment. An education is an investment. Never go into dept for a car. If you can't afford to pay cash then your paying to much.
I have never undersood why people go into dept for a car.
Take a bus than move up to a junker. Than when you can afford to pay cash do so if you wish. You will be money ahead.
Remember $3 dollars coming in and $1 dollar going out is happiness. $3 dollars coming in and $4 dollars going out is sadness.
Kathleen

 

Ah, but for us it was $3 coming in and $3.13 going out!

But in all seriousness, debt is a way of life, especially for cars. Not many people would be driving if you had to come up with the money all at once. There are no bus stops for 5 miles near my house. I don't want to put my kids in a car that might break down or has a poor safety rating. When I went into debt for 4.3%, I bought peace of mind for my family to travel safely...and efficiently!

 

Gotta disagree with that. There are lots of rich people who are sad and poor people that are happy.

My own personal experience...we bought a timeshare at an obscene interest rate, close to 10%. I'm sure we'll never turn a profit on it. However, our cousins fly in from all over the country so that our kids can spend time together like we used to when we all lived in New Jersey when we were kids. I think that was debt that bought happiness!

 

Well, I say stretch the payments out as long as you can, IF there's no penalty for paying early. That way you can pay more than the minimum payment and if you're suddenly hard of cash one or two months, you don't have to pay as much and can make it up later.

Standard auto loans generally come in two types: simple interest and 'rule of 78s' loans:

Simpl interest is the type that you want, and is by far the most common type. It calculates interest month to moth based on the remaining balance. Like say you have a $10,000 balance one month, and you pay $1,000 on it. Next month the interest of the loan will be calculated on the $9,000 remaining balance.

With 'rule of 78s' loans, the interest is charged up front and remains the same, as much as 75% of the first few payments is interest. So no matter how much is left on the loan, you still end up paying interest on the full amount. Plus there are usually stiff prepayment penalties because you've basically signed a contract for X number of months of interest. It doesn't matter if you pay the loan early. If you sign for 60 months and pay it off in 48 months, you still owe for those 12 months of interest after the loan was paid. This type of loan is usually given to people with very bad credit, so the lending company can make up as much of the interest as possible in the first year or two of the loan in case the person defaults. You want to avoid this type of loan unless you can't get anything else. If you want to see more about this type of loan check here:

http://www.bankrate.com/brm/news/auto/20010827a.asp

 

Zero. It's too expensive to borrow money to buy a new car.

 

I agree, but being in debt and being poor are not the same thing. I think debt can cause a lot of stress and that does not lead to happines.

 

Kathleen, although I agree that most cars are not an investment, I completely disagree with your philosophy of never going into debt. How did you buy your home? How did you build up your credit? Why should a car, most people's means of transportation to and from the conveniences of life and their jobs, be any different?

Why do you imply that people who finance spend more than they make? If my wife and I bring home over $9,000/mo, and we only spend $1,100 of it on our cars, we're STILL in the black...

There are many factors in a person's life that influence what may and may not be appropriate for them, but for you to inflexibly state that the rest of us are paying too much since we didn't pay in cash is inconsiderate and inaccurate.

During the 5 years that you saved for your last car, I was driving mine, able to travel farther from home, which gave me a broader range of jobs to choose from, which made me more money, which paid for the investment I made in my car.

Come to think of it, my happiness in my marriage is probably attributable to my car and ability to travel to the place I met my wife, since she didn't live within one square mile of my house.

Wow! So my 16 month old daughter (see her in my profile pic), is DIRECTLY related to the fact that I financed a previous car, rather than waiting to buy it outright!

So although I won't disagree that paying cash is a nice thing and saves you some money, I also won't generalize and categorize everyone who CHOOSES to finance as less intelligent than those who CHOOSE not to.

One final thought. All things being equal, if you go into a dealership and tell them you're paying cash, you give up some of your bargaining power. The idea that they might make some money off of financing your purchase will often lead dealers to pay more for your trade in, or to charge less for extras.

 

Obviously...but her point seemed to be that being in debt will make me unhappy and not being in debt will make me happy. I happily go into debt to have vacations with my kids, put them in safe cars, have a comfortable house etc.

 

Amen Mike!

 

Very true!

 

Only if you want to risk losing your home. If you can't pay your car loan, they reposess the car and you keep the house. If you can't pay your home equity loan, they reposess your house and you keep the car.

Which would you prefer?

 

Hmmm....that's a toughie. Lose the 28K car or the 465K house, er, condo...hmmm. Can you help me out here with this one?