A Car payment if for suckers

[Bubba T]

Financing a depreciating asset is the only way to go, breh, especially when the long-term cost is net negative (interest rates lower than inflation like I keep saying).

Why sink a large amount of cash into something that's guaranteed to lose value? Use other people's money for that, and your own money to make money.

This isn't rocket science.

Total agreement. There's no reason to take on unnecessary debt to get a car just because inflation is at 1.6% and I can get a car loan for 2.6%. I don't see the point of taking a loan to invest the money. I don't like being in debt and while I can see taking on some debt to get a house taking it on for a car doesn't seem wise. If you're buying a car that cost enough to even consider taking out a loan to buy it the damn thing is probably still on the heavier side of it's depreciation and is probably losing 15% of it's value a year still.

We're really borrowing money to buy something that's losing 15% of it's value a year so we can take the money we would have used to buy it and invest it? If you buy a car at year 4-5 yeah it might require some maintenance but the depreciation is really gonna slow at that point and it's probably fallen to a dollar amount that anyone with a decent job can save several months and just buy it cash. If we buy it before that 4 year mark the question becomes will the depreciation of the car and interest combined outpace the growth of the investments?

Although you two have opposing viewpoints throughout this thread, you both make good points and I agree in principle.

BaldingSoHard, economically it makes sense to finance a vehicle with interest rates are so low and use that money to invest elsewhere. The problem with your position is not the content, but the general audience it is aimed towards.

Let's keep it 100. A lot of Coli brehs don't have their finances right to be taking this sort of advice. Many of them more than likely do not have the requisite credit score to qualify for these low rates and many of them don't have the extra cash lying around to invest. Because of these reasons, advice would be better served on getting their financial house together before making moves. So for a person who doesn't have their credit right would probably be better served buying a cheap car in cash and working on getting themselves together.

winb83, I agree on principle that there is a lot of wasteful spending on the purchase of vehicles. If a car provides you the basic function of getting you to point A to point B safely, then everything else is just extra. Once the core function has been fulfilled you are now buying based on wants. We are not hermits however. We are human beings with wants and some of us want to buy a 30k car for whatever reason. There isn't really anything wrong with that as long as you are smart about it.

 

[TRFG]

Bingo. These banks aren't dumb. How do you think they have such nice buildings?

Most of these banks make more from mortgages

 

[crush_sumpin]

The vast majority of people finance a car. I've heard statistics of over 70% of cars sold in America are financed. If we're being honest here people finance a car in many cases for the same or similar reasons as to why they're drowning in consumer debt. They want something and don't have the money in most cases to buy it outright so they borrow the money to get it. In other less frequent cases they don't want to spend the money. In other even less frequent cases they're looking to gamble with the money but really are you gonna pretend like most cases aren't the first?

People like to dress a car up as a need. Maybe to a certain extent a car is a need but there's a lot of want wrapped around that need as well. Unless you're very low income when you get to the price that financing a car is justifiable you're probably taken a need and added enough want to it to drive up the cost. People rationalize it by saying they need a stable reliable car and end up buying a car they don't have the money for. In reality they can get a stable reliable car for much less than they spent also by buying an older used car and getting a couple mechanics to check it out before the purchase.

Think about it though if car financing didn't exist what would those people do? They'd buy the best car they could afford rather than be enabled to buy a car they don't have the money for.

are you speaking about someone who works at in & out burger & finances a range rover? I disagreed with this post because it is some sucker shyt to make such a blanket statement. do you live in a house or an apartment? and if you live in a house did you buy it outright or are you paying a mortgage? are you married? if so was the ring financed? do you have ANY credit cards in your pocket? do you have a credit score?

so if you are agreeing financing a car is sucker shyt then basically you are saying financing period is sucker shyt..which is what I disagree with. not everyone has disposable income or are entertainers or tokens that have been selected for the time being to shine like a brand new penny. small businesses get loans with finance rates attached to them, does that make them suckers too? millionaires and large corporations finance too. of course people finance to get things they want because they cannot afford to purchase outright. I think you and the author of this post are criticizing people's money management, at least I hope thats what you are trying to say.

if I want a 100k car for example, and I have 100k in the bank, that doesn't mean I will buy it outright. and if I finance it that doesn't make me a sucker..but beyond that, your opinion about who is a sucker based on how they purchase is bytch shyt. counting other people's pockets is too. and determining people are suckers because they don't move how you think they should is as well.

 

[TRFG]

The building? They financed them.

@Truefan31 They lease the space but that's dumb too huh

 

[The Refiner]

I look at it as separating my investments from my assets. When you're focused its easier to attain goals. Clear lines. Minimize risk by avoiding debt. Debt is a wealth killer. People get caught up in rates and interest which is important but imo being organized helps drive investing and retirement savings. Inflation is always present, it's why after my emergency fund I basically max out as much as possible on investments. My emergency fund has a clear purpose:for emergencies. Not to invest, but to do what I intended it to do. It's why things like whole life insurance are scams. They try to be more than what they should be, and it's why it fails at all of it.

Zero debt means a lot to me. I own my vehicles. Nobody or no bank can tell me shyt. I do basic maintenance and they've lasted years no problem. I lose my job, I get hurt/disabled whatever, they're still mine. I don't owe anyone on them. My cars aren't means to borrow and invest. They're cars. I leave it at that. My house is mine. It's not a means to borrow against and invest. It's risky. With those things covered, it becomes easier to focus on building funds up for other things like investing/real estate. When people can focus on one goal it's easier to accomplish. I learned the hard way over years now looking back its so easy what to do but we get caught up thinking we're smarter than banks and/or we want to stunt to people who really don't matter.

People quickly forget the lesson kids are taught: earning and actually saving up to buy something. When you do you tend to appreciate it more too.

I can really put this whole post in bold. Keeping it simple has soooo many benefits including actually sleeping well at night knowing what you have built in your life is yours to keep. If you have alot of big items that you are financing (house, cars, etc.) you may look like you are doing okay in life on the surface, but there's a certain amount of risk that you constantly have to think about in the back of your mind...on top of whatever curveball life throws at all of us.

Having clear lines, being organized, knowing that your investments are just that, knowing your emergency fund is just an emergency fund is underrated. You're not borrowing from one account to fund another. You're not using bank formulas (opportunity cost) to justify financing a car and investing the cash. It's just messy to me. Sure, if you want to use your energy on inflation rates, interest rates, and bank practices you may come out ahead. IMO, its too much energy for a potential win and too messy.

P.S....Do y'all realize the ease of getting approved for a car loan/ student loan has raised the price of the average car and the price of education. As a society we are so desperate for cars, education, housing that we finance these things we can't afford, which ends up raising the average cost throughout the industry. We are shooting ourselves in the foot twice, but I'm not mad because when the bubble bursts I will be in a position to capitalize.

 

[Truefan31]

are you speaking about someone who works at in & out burger & finances a range rover? I disagreed with this post because it is some sucker shyt to make such a blanket statement. do you live in a house or an apartment? and if you live in a house did you buy it outright or are you paying a mortgage? are you married? if so was the ring financed? do you have ANY credit cards in your pocket? do you have a credit score?

so if you are agreeing financing a car is sucker shyt then basically you are saying financing period is sucker shyt..which is what I disagree with. not everyone has disposable income or are entertainers or tokens that have been selected for the time being to shine like a brand new penny. small businesses get loans with finance rates attached to them, does that make them suckers too? millionaires and large corporations finance too. of course people finance to get things they want because they cannot afford to purchase outright. I think you and the author of this post are criticizing people's money management, at least I hope thats what you are trying to say.

if I want a 100k car for example, and I have 100k in the bank, that doesn't mean I will buy it outright. and if I finance it that doesn't make me a sucker..but beyond that, your opinion about who is a sucker based on how they purchase is bytch shyt. counting other people's pockets is too. and determining people are suckers because they don't move how you think they should is as well.

You do you obviously but the sentiment is that if you have a 100k in the bank i hope you're not gonna finance a car at all.

And finance a ring? Worst than a car. The failure rate of small businesses is high. Loans can put additional pressure on the business that could otherwise be avoided. If the person wants to start a business and is passionate enough to want to succeed, saving up is better than leveraging money in case the business fails.

 

[Truefan31]

@Truefan31 They lease the space but that's dumb too huh

they're also corporations with basically zero liability to anyone but shareholders. They don't care about people's well-being, if something happens they don't care about whose families are affected. Stock tanks, they just fire people. But if people lose their jobs, debt means stress on them and the families that depend on them. But hey that's me. Being in debt and owing mofos isn't what i'm about. It's funny people bragging about buying things to put them in a riskier position.

 

[AtomicUse]

Save all your money for when you're too old to enjoy it breh's.
Drive piece of shyt cars breh's.
Deny yourself the joys of life breh's.

I remember sitting in a meeting with a 73 years old with a half a mill in the bank and he was miserable as hell, said he worked his whole life and saved all his money and now he's old and al he's got is his money. I met so many old people who never enjoyed thier hard work and they were too old to reap rewards. @Reinscarf told you guys about the woman that saved her whole life, retired, next week went on a cruise and died on the cruise.

You can't take none of this shyt with you when you go. Enjoy your lives.

 

[Truefan31]

I can really put this whole post in bold. Keeping it simple has soooo many benefits including actually sleeping well at night knowing what you have built in your life is yours to keep. If you have alot of big items that you are financing (house, cars, etc.) you may look like you are doing okay in life on the surface, but there's a certain amount of risk that you constantly have to think about in the back of your mind...on top of whatever curveball life throws at all of us.

Having clear lines, being organized, knowing that your investments are just that, knowing your emergency fund is just an emergency fund is underrated. You're not borrowing from one account to fund another. You're not using bank formulas (opportunity cost) to justify financing a car and investing the cash. It's just messy to me. Sure, if you want to use your energy on inflation rates, interest rates, and bank practices you may come out ahead. IMO, its too much energy for a potential win and too messy.

P.S....Do y'all realize the ease of getting approved for a car loan/ student loan has raised the price of the average car and the price of education. As a society we are so desperate for cars, education, housing that we finance these things we can't afford, which ends up raising the average cost throughout the industry. We are shooting ourselves in the foot twice, but I'm not mad because when the bubble bursts I will be in a position to capitalize.

yeah i'm pretty happy with how far i've come. Everything has a purpose basically. I don't mix. Works for me. Zero debt has been good to me both financially and emotionally. Saving is easier, investing is easier, doing what I want is easier.

Funny I get more mail now than ever to throw away from CC companies, mortgage companies wanting me to take out equity loans, etc. That tells me all I need to know about how I think I'm doing. Trying to prey on a mofo.

 

[FukYaFeelings]

Although you two have opposing viewpoints throughout this thread, you both make good points and I agree in principle.

BaldingSoHard, economically it makes sense to finance a vehicle with interest rates are so low and use that money to invest elsewhere. The problem with your position is not the content, but the general audience it is aimed towards.

Let's keep it 100. A lot of Coli brehs don't have their finances right to be taking this sort of advice. Many of them more than likely do not have the requisite credit score to qualify for these low rates and many of them don't have the extra cash lying around to invest. Because of these reasons, advice would be better served on getting their financial house together before making moves. So for a person who doesn't have their credit right would probably be better served buying a cheap car in cash and working on getting themselves together.

winb83, I agree on principle that there is a lot of wasteful spending on the purchase of vehicles. If a car provides you the basic function of getting you to point A to point B safely, then everything else is just extra. Once the core function has been fulfilled you are now buying based on wants. We are not hermits however. We are human beings with wants and some of us want to buy a 30k car for whatever reason. There isn't really anything wrong with that as long as you are smart about it.

@ me next time nikka

 

[TRFG]

they're also corporations with basically zero liability to anyone but shareholders. They don't care about people's well-being, if something happens they don't care about whose families are affected. Stock tanks, they just fire people. But if people lose their jobs, debt means stress on them and the families that depend on them. But hey that's me. Being in debt and owing mofos isn't what i'm about. It's funny people bragging about buying things to put them in a riskier position.

What does that have to do with what I said

 

[winb83]

winb83, I agree on principle that there is a lot of wasteful spending on the purchase of vehicles. If a car provides you the basic function of getting you to point A to point B safely, then everything else is just extra. Once the core function has been fulfilled you are now buying based on wants. We are not hermits however. We are human beings with wants and some of us want to buy a 30k car for whatever reason. There isn't really anything wrong with that as long as you are smart about it.

Many people are financing a car so they can drive one they really can't afford and if they couldn't finance that $30K car they wouldn't have one because they wouldn't be able to wait 5 years saving $500 a month to get it. What they would do instead is go out and get a car they could actually afford.

My point is that's the car they should be driving anyway. The one they can actually afford. Sometimes just because you can do something doesn't mean you should. My credit is borderline perfect and I have a 6 year job history at a job that more than qualifies me for a loan to get a $30K car. The reality is I can't afford that car. I managed to save $910 a month for every month this year so I could make the payments on the car but I still look at it as if I can't afford the actual car because without those payment no way in hell would I have a car like that.

It's not a good idea to use OPM to live outside your means. That's what being smart about it is. Now if you've reached a point in your life that you got well over $30K and you can walk in there and write that check and it's nothing to you then that's being smart about it but if you had to finance to get the car that's not smart.

 

[Rockstar Mom]

I bought my car for $500 from a lil ol white lady on craigslist. Best $500 ever spent. She hasnt needed any work done. Has air and heat, gets me from point A to point B, and $20 fills up the tank.

 

[Truefan31]

What does that have to do with what I said

Corporations have basically zero liability to themselves. Leveraging has no real penalty to them.

In personal finance though leveraging future earnings always brings risk. Debt=risk. You have more to lose than corporations who are bailed out by us and given golden parachutes for fukkin up. We don't get that luxury.

 

[Truefan31]

Save all your money for when you're too old to enjoy it breh's.
Drive piece of shyt cars breh's.
Deny yourself the joys of life breh's.

I remember sitting in a meeting with a 73 years old with a half a mill in the bank and he was miserable as hell, said he worked his whole life and saved all his money and now he's old and al he's got is his money. I met so many old people who never enjoyed thier hard work and they were too old to reap rewards. @Reinscarf told you guys about the woman that saved her whole life, retired, next week went on a cruise and died on the cruise.

You can't take none of this shyt with you when you go. Enjoy your lives.

Nobody's sayin live like a hermit. But understanding how debt can negatively impact your life can go a long way. For every old man who seemingly didn't enjoy their fruits, there's a vast majority who if they just were common sense smart and didn't live beyond means got to enjoy retirement. People live longer now. Nobody wants to work forever. The guy who had 500k in an account didn't do it right then. Too much in a simple savings account.

Deny joys of life? Having little or no debt actually means you can enjoy life more. More choice, money becomes less a factor. Freedom to do whatever, travel, change careers, move, take up hobbies etc.