Highway robbery with half tons

[ttengineer]

Perpetual payments. I've been fortunate that between my wife and I we've been able to save the money and used investments to cash out out last two vehicles. We used the absence of payments to pay off out house early. How many borrowers qualify for 0% loans and how many have a sizable down payment? I agree if all the stars are in alignment borrowing at 0% and you have the savvy to invest the dinero makes sense. I just don't think many people qualify for it. Buying a house or a piece of property while driving a used truck would benefit in the long run.

It’s really not that hard to qualify at 0%. Usually it means a 740 credit score. But you are correct in that the stars have to align for some people.

I don't think this is the guy regcabguy is talking about.
What is your opinion on the guy who is swimming in debt?

I've often found with the 72 month, 0 down, manufacturer financing they only doit at full retail.
You save way more money with a no trade, cash offer.

It just depends, you have to shop around. 0% is smart if the retail price ends up being lower than a “deal” after a few years of interest.

I used to think 0% interest was a no-brainer.

Now, I think it’s foolish to go into debt even at 0%.

Perhaps, depends on everyone’s financial situation. For me, with my score, debt to income ratio, and the right car, it’s foolish not to take advantage. Especially if I consider how much money I can make in the market if I don’t take out a big chunk to buy it out right.

I certainly get everyone’s point, and y’all are right to some extent. I guess it really just depends on each individual.

In today’s society everyone needs to understand the financial world.




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[tennesseewj]

Perhaps, depends on everyone’s financial situation. For me, with my score, debt to income ratio, and the right car, it’s foolish not to take advantage. Especially if I consider how much money I can make in the market if I don’t take out a big chunk to buy it out right.






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This argument against paying cash is 100% valid for you and for anyone else who actually has the cash on hand to buy the vehicle, or finances a responsible portion of the loan so they can get out if they hit unexpected financial issues AND invest the difference.

The biggest issue I see is that a lot of folks use this argument to justify financing a vehicle without adequate cash down knowing full well they don't have the liquid assets needed to bail themselves out and they aren't putting money in the market to gain anything.

How anyone tolerates being upside down on a car loan baffles me.


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[phsycle]

Perhaps, depends on everyone’s financial situation. For me, with my score, debt to income ratio, and the right car, it’s foolish not to take advantage. Especially if I consider how much money I can make in the market if I don’t take out a big chunk to buy it out right.

I certainly get everyone’s point, and y’all are right to some extent. I guess it really just depends on each individual.

In today’s society everyone needs to understand the financial world.




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I certainly get that. I was the same way. I leveraged why I could to keep putting money in the market that was giving back at LEAST 8% (but actual was 12-14%, 5-10 yr avg, depending on the investment vehicle). Any car loan at 0-5% seems like free money.

If you’re aggressively trying to build up your portfolio, it makes sense. Too much risk for me though. Too much can go wrong. Like right now. Most people can’t pull money out without losing big $$. What a roller coaster ride over the last month.

 

[phsycle]

This argument against paying cash is 100% valid for you and for anyone else who actually has the cash on hand to buy the vehicle, or finances a responsible portion of the loan so they can get out if they hit unexpected financial issues AND invest the difference.

The biggest issue I see is that a lot of folks use this argument to justify financing a vehicle without adequate cash down knowing full well they don't have the liquid assets needed to bail themselves out and they aren't putting money in the market to gain anything.

How anyone tolerates being upside down on a car loan baffles me.


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Even if you have money in the market though, you only realize gain (or loss) once you sell. Most people can’t sell off anything right now without taking a loss on it. Market has rebounded some but lots of skepticism out there right now.

 

[badm0t0rfinger]

I know it's projection on my part, but I hope in 3 months dealers are closing their doors or giving really farking good deals to keep afloat.

If they can deal with issues a decade ago they should be able to weather this, enough people are still making good money, or have enough in the bank that it would be silly to pass up 0% interest.

 

[calicamper]

This argument against paying cash is 100% valid for you and for anyone else who actually has the cash on hand to buy the vehicle, or finances a responsible portion of the loan so they can get out if they hit unexpected financial issues AND invest the difference.

The biggest issue I see is that a lot of folks use this argument to justify financing a vehicle without adequate cash down knowing full well they don't have the liquid assets needed to bail themselves out and they aren't putting money in the market to gain anything.

How anyone tolerates being upside down on a car loan baffles me.


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Paying cash Ford paid me another $2300 off my negotiated price. All dealers try to make it look like they are knocking $2300 or whatever the cash deal is when for them the needle didn’t move. Lol

My $82,000 cash wasn’t going to earn me much in the over heated market also why taking the $2300 was more interesting. If I were buying in the next 3-4 months no my $82,000 would probably net me 65+% return if put in the market in the next month or so. Which is why we are doing that too?

 

[vintageracer]

Franchise New Car Store dealerships have 5 major profit centers in their business.

Selling new and used vehicles, Financing those vehicles, Servicing Vehicles, Parts Sales and Year End Volume Holdback Payments.

Guess which one is the LEAST profitable? Yep it's the sales of NEW vehicles!

Guess which one is typically the most profitable? The Financing of those new and especially used vehicles.

The financing aspect of vehicle sales in a new car store is HUGE particularly on used vehicles where the dealer can play with the finance rate to make them "Mo Money" over the life of the loan.

Paying cash for vehicle in the old school days did git you a better deal. NOW that's typically not the case. By paying cash for a vehicle at a new car store you are taking away what is arguably their best profit center from the deal. In today's world that usually means you are going pay MORE for the vehicle to keep their profit margin up to where they want it to be as they know they will sell that vehicle to someone else if you don't buy it. It's all about volume for new car store today. Even Lexus is now all about volume and pushing the metal out the door.

Why do think leasing is once again so popular?

That's easy because money is cheap, the manufacturers and dealers can play with the numbers to where you really do not know what they are really making on the deal and if it's a good deal for YOU. Besides even NADA (National Automobile Dealers Association) the trade group for the auto industry says that Leasing is typically the Most Expensive method of financing for any buyer of a new vehicle.

It's all about the money!

 

[badm0t0rfinger]

Franchise New Car Store dealerships have 5 major profit centers in their business.

Selling new and used vehicles, Financing those vehicles, Servicing Vehicles, Parts Sales and Year End Volume Holdback Payments.

Guess which one is the LEAST profitable? Yep it's the sales of NEW vehicles!

Guess which one is typically the most profitable? The Financing of those new and especially used vehicles.

The financing aspect of vehicle sales in a new car store is HUGE particularly on used vehicles where the dealer can play with the finance rate to make them "Mo Money" over the life of the loan.

Paying cash for vehicle in the old school days did git you a better deal. NOW that's typically not the case. By paying cash for a vehicle at a new car store you are taking away what is arguably their best profit center from the deal. In today's world that usually means you are going pay MORE for the vehicle to keep their profit margin up to where they want it to be as they know they will sell that vehicle to someone else if you don't buy it. It's all about volume for new car store today. Even Lexus is now all about volume and pushing the metal out the door.

Why do think leasing is once again so popular?

That's easy because money is cheap, the manufacturers and dealers can play with the numbers to where you really do not know what they are really making on the deal and if it's a good deal for YOU. Besides even NADA (National Automobile Dealers Association) the trade group for the auto industry says that Leasing is typically the Most Expensive method of financing for any buyer of a new vehicle.

It's all about the money!

My dad owned a dealership for about 25 years before retiring, and I felt like this is a post he could have made.

 

[ttengineer]

How anyone tolerates being upside down on a car loan baffles me.


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I kind of see the argument for dealing with it if you keep the car for 10 plus years. But it’s a risk.

All I really know is I absolutely hate paying interest.


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[AbleGuy]

It’s only irresponsible if you have a high interest rate and don’t put any money down.

60 months or higher is smart if you put a big down payment and get a low to 0% rate. It’s foolish not to take advantage if you know how to properly invest your money.

Right on. We went with 5 yrs and 0% on our newest Suby....And the loan length was not a big concern since we kept our last one for 17 years. The cash we didn’t spend buying it outright is instead now making us 4.5%. I believe we can call that “leverage.” FWIW, this loan is our only debt too.

 

[warrpath4x4]

last month we were looking at getting a new vehicle, a last year model jeep renegade with the offerings of 0% interest for 84 months (or how ever long), found one about an hour away that was listed on their website for $19,000. This is when i found out that in order to get the 0% interest, you have to purchase at sticker price ($32,000) and the dealer takes all the rebates to pay for that 0% interest.


And this is why i am still driving my 2005 TJ

 

[phsycle]

last month we were looking at getting a new vehicle, a last year model jeep renegade with the offerings of 0% interest for 84 months (or how ever long), found one about an hour away that was listed on their website for $19,000. This is when i found out that in order to get the 0% interest, you have to purchase at sticker price ($32,000) and the dealer takes all the rebates to pay for that 0% interest.


And this is why i am still driving my 2005 TJ

That’s been my experience as well. In order to get 0%, you’re not entitled to certain rebates. There is no free lunch.

 

[ttengineer]

That’s been my experience as well. In order to get 0%, you’re not entitled to certain rebates. There is no free lunch.

It usually depends on the rebate. A lot of times the dealers are double dipping on the manufacture and leaving the buyer out to dry. Rebates are typically paid to the dealer from the manufacturer when you buy a car so you just have to call the dealer out on their shady business.


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[malibubts]

That’s been my experience as well. In order to get 0%, you’re not entitled to certain rebates. There is no free lunch.

Had the same happen when I bought my Ram in 2015. You lost out on I think a $2,000 rebate going with FCA financing at 0%. I ended up going with a third party loan at a little over 1% so the interested paid over the term was pretty low. I think I ‘saved’ $1,500 or so going this route and the dealer thought I was crazy for not wanting a 0% loan. Of course your mileage may vary.

 

[Halligan]

last month we were looking at getting a new vehicle, a last year model jeep renegade with the offerings of 0% interest for 84 months (or how ever long), found one about an hour away that was listed on their website for $19,000. This is when i found out that in order to get the 0% interest, you have to purchase at sticker price ($32,000) and the dealer takes all the rebates to pay for that 0% interest.


And this is why i am still driving my 2005 TJ

Your dealer wasn't dealing then. When you get 0% financing you lose manufacturer rebates on the vehicle. However, you can still negotiate. For example I'm about to close a deal on a new Grand Cherokee for the wife. I'm getting 0% for 84 months but i'm not paying sticker price for the Jeep. I'm paying invoice price minus half the dealer holdback which is about $1,600 off sticker on that particular jeep.