Poll of the Day > Car loans are so dumb.

(+) Yeah! (+)

Paid off my loan in full today, the first day I could. The dealer gave me a small discount for taking a loan over doing cash. In the two weeks I've had my car I already have around $50 in interest extra to pay. Every day adds $3.08 more to what I pay on my 72-month loan (I knew I'd pay it off so I told the guy just to give me the lowest APR he could, it was like 7% which is ridiculous but he probably didn't put effort into it since I said I was paying it off and was getting a discount.)

The average auto loan lasts 68 months for people. The average loan is around 30k. That's like a year salary for most people.

I already feel bad paying 19k for my 2018 CPO Camry with 13k miles when I'm making 140k. I got a new credit card before paying 3k at the dealer so I could get some new-sign-up-bonus rewards.

Can't imagine what a college loan payment must be for those people who decided to go to out-of-state schools.

A normal person would make a topic like Hey, I just paid off my car.

Your topic turns into this weird self-congratulatory put down of other people.

Youre a strange dude.
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Ok
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7% is p high
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Yeesh, my car loan was 6 years at 0%. Of course they just tack on extra amounts elsewhere if they're not charging interest but ya know.
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Yeah, it's the "car loan's" that are dumb.
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Zangulus posted...

7%? You got fucked. Especially if you have good credit.

Mine was meh, and I got 4.4%.

This. Mine was like 3 or 4, IIRC... I dont even have the best credit...
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I mean, part of it is also that you can get really good cars, used for WAY less as well. I don't get why people buy 20-30k new cars, instead of buying a 2-3k car....even if it breaks down or needs repairs, you would need to at worst buy another 2-3k car, and STILL end up spending way less, with no interest etc.

Buying a 30k+ car with 7% interest is crazy...seriously, that is throwing away a few K a year in interest easily.

Cars are NOT a good place to invest money, at all, the depreciate waaaay too fast. There is no need for a new one, even if your commuting every day.

If you are, but a fairly cheap car when new (20k or so), that is 4-5 years old, and you'll get it for well under 10k. In addition, it will not loose its value that fast anymore. That will get you a nice, fairly new comfortable car to commute in and even if your adding 100 miles a day to it (36k miles a year), you can still sell it/trade it in after a few years for fairly close to the initial value (and then do the same thing again).

If you got the money and want comfort, go for something like a 2011 toyota avalon, it's got good gas milage and very comfy and you can get them with very low miles for about 10k. Doing so means in 2 years you could resell it for the price normal miles go for (9k or so), and be out $1000 over 2 years, with extreme comfort, a great car, good gas mileage and that is if your driving a ton every day.

If you don't commute much, I'd go for a much cheaper car over all, something like a 2009 saturn, which you can get with low miles for under 4k. Even piling on the miles on those, will still net you almost the same price (within $500) in general, so you lose almost nothing long term, and can keep rotating them every 3 years or so (if your driving 30k miles a year, you don't wanna go over 200k miles and still get a decent amount...try and buy one with 60k or less miles, and sell it before it hits 150k).

Those cars are fine, with no problems, low miles and WAY cheaper. Buying a new car is almost the same as throwing money away in my opinion.
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Weird flex, but ok?

Wtf did I just read?
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Um.

Personally, between new and used cars, I like new. Ive had both. But it could be the area. It was hard finding a used car for really cheap here quickly. Which is what I needed at the time. I got it and everything was fine for like a year and a half of so. Then I started needing to fix a bunch of stuff. And everything. Eventually, it jut died and wouldve taken a lot of money I didnt have to fix it. My new car has had only one problem. And it was a super easy fix. And not expensive. It just all depends. I know some guys that get new cars and have plethora or problems. And used ones that run well for years. But for me, I like new. Plus, I wouldnt want to rotate cars every few years, tbh...
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LinkPizza posted...

Personally, between new and used cars, I like new. Ive had both. But it could be the area. It was hard finding a used car for really cheap here quickly. Which is what I needed at the time. I got it and everything was fine for like a year and a half of so. Then I started needing to fix a bunch of stuff. And everything. Eventually, it jut died and wouldve taken a lot of money I didnt have to fix it. My new car has had only one problem. And it was a super easy fix. And not expensive. It just all depends. I know some guys that get new cars and have plethora or problems. And used ones that run well for years. But for me, I like new. Plus, I wouldnt want to rotate cars every few years, tbh...

Same here. I had crappy cars that constantly broke down for years. Finally saved up and bought one that was used but just a year old and only had 25k miles on it. Havent had any problems yet and I've had it for 3 and a half years. Sure as hell beats driving around in a car that you're not sure day in and day out whether or not you're gonna make it where you're going. Having a reliable car eliminates a whole lot of stress from your life

OhhhJa posted...

LinkPizza posted...

Personally, between new and used cars, I like new. Ive had both. But it could be the area. It was hard finding a used car for really cheap here quickly. Which is what I needed at the time. I got it and everything was fine for like a year and a half of so. Then I started needing to fix a bunch of stuff. And everything. Eventually, it jut died and wouldve taken a lot of money I didnt have to fix it. My new car has had only one problem. And it was a super easy fix. And not expensive. It just all depends. I know some guys that get new cars and have plethora or problems. And used ones that run well for years. But for me, I like new. Plus, I wouldnt want to rotate cars every few years, tbh...

Same here. I had crappy cars that constantly broke down for years. Finally saved up and bought one that was used but just a year old and only had 25k miles on it. Havent had any problems yet and I've had it for 3 and a half years. Sure as hell beats driving around in a car that you're not sure day in and day out whether or not you're gonna make it where you're going. Having a reliable car eliminates a whole lot of stress from your life

Yeah. I was always worried about breaking down somewhere far away. Luckily, it was usually at work one base, or at home. But still. It sucks to have your car break down so often...
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I'm a bit biased as I have seen friends get incredible deals in the last year. What I said above holds true though, but that is for everyone.

For lucky people...who seem to win the car lottery, you see them buy cards for $400, $600 and for an SUV $2000 that are WAAAAY cheaper then the average price...and it's hard to even believe the deals they get.

It makes me think it's normal to get those insane deals cause it happened so much in the last 2 years.

I was looking for an SUV/Truck etc that I could drive around and sleep in the back for instance. The best deals on something with decent gas mileage, and not a ton of miles on it/good shape etc that I saw was around $3,500....but somehow a roomate of mine in the last place I lived randomly had a girl he worked with sell him hers for $2000 (was worth at least $5k).

Meanwhile another roomate got a 3k car...for $400, and another friend who moved to NY bought a car worth $2k easilly for $600, drove it cross country and for a year afterwards with no problems. He ended up getting a bunch of tickets and having it impounded though.

I have never gotten any crazy good deals like that though, but even so buying a 3k or like my toyota avalon $10k) car has always been the best option. I bought the avalon in 2001 (it was a 1999 toyota avalon) for 10k and drove it 16 years without any problems (just had to replace a belt once, and finally replace the door guts on the drivers side as they were not working well).

New cars smell great, and it feels nice to drive a brand new car, but...it's not worth it in my opinion, used is the way to go, you can drive just as well, but spend half (or less) as much money, and then still resell it for most of that even.
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For me, new is worth it. But its a personal thing. In my area, any car for just a couple thousand dollars is either a project car, or will just need constant maintenance to keep it running. The used cars that will work well for a few years at about 1/3-1/2 the price of the new cars, anyway. Here, at least. So, new is good for me. But like I said, its a personal thing. And this is speaking from someone who has had both...
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Zangulus posted...

Also, how much of a discount? I worked mine to a 17% discount or so. But after taxes, fees, and an extended warranty I ended up paying sticker.

Still upset I had to sell that car.

I paid $200 under sticker after fees not including tax. No extra warranties besides the CPO and the basic. Really it was the best deal for the car within 500 miles by a decent amount so it wasn't going to go much lower.

Zangulus posted...

7%? You got fucked. Especially if you have good credit.

Mine was meh, and I got 4.4%.

Yeah I did, and they wouldn't offer me below a 72 month loan, but I didn't push it either since I was paying it all off first payment. I have a score around 730-780 depending on the month. >_<

wolfy42 posted...

Buying a new car is almost the same as throwing money away in my opinion.

basically, lucky for us there are a lot of idiots out there increasing our supply of cheap 5 year old cars.

My car loan is great. 0% over 5 years. It would actually be a net negative for me to pay it off early.
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I was debating on a 2017 camry that was 3k less with 10k more miles without a CPO warranty. But I kinda wanted the 2018 since they redesigned it and the warranty was some peace of mind.

I could've got an even older one for less, but I was worried I'd buy something somebody mistreated.

I lease a new car every 3 years. I don't want to be stuck with a new car that has out of date tech after a few years.

It works for me because I don't go over the mileage and it has the most up to date safety for my family.
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Firewood18 posted...

I lease a new car every 3 years. I don't want to be stuck with a new car that has out of date tech after a few years.

It works for me because I don't go over the mileage and it has the most up to date safety for my family.

I looked into leasing once, but yeah, looks like you lose the most money that way, but...you do avoid alot of hassle. It looked like (from my limited research) it is better to lease for a longer term (3 years for instance) and then trade in the car for a new lease early. There are typically penalties for doing so, but not if you do it to trade in for a new lease.

This should (along with putting down a decent down payment) drastically reduce your monthly payments, which ends up reducing the over all amount that you end up paying for the car.

As an example I looked at a 32k car, with a final price of 30k, and just $2000 down. Set for a 2 year least it was something like 500$ a month payments, but set for a 3 year leas it ended up being $340 or so.

Net total paid for using the car for 2 years...with a 2 year lease and $2k down was $14,000. That money is totally gone btw..not investedin anything etc.

Net total paid for the same car with a 3 year lease, that you trade in after 2 years was $10k (about)....significantly less. Best to make sure that is an option in advance though.

Leasing requires you to drive less then a certain amount of miles though, which shouldn't be a serious problem unless you drive a freakton. That being said....if you can swing purchasing the car (even new) you probably will end up spending way less over 6 years or so.

But that 30k car straight up, drive it 6 years, with less then 15k miles average, and you'll still be able to sell it for about half the price. So instead of 14 (or 10k), spent for just 2 years, you spend about the same amount total to drive it for 6...a much better deal (with fewer restrictions).

Whats more, if you actually buy the car used (but not heavily used), with say 30k miles on it.......like I did with my Toyata avalon, you can end up selling it after driving it for 5-6 years for fairly close to what you bought it for....spending as little as 2-4k total for the same period, with a car that looks and feels just as new.
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If you go back in time a bit...you can use a toyota avalon as a great example.

A 2015 toyota avalon sold initially for 32k or so, and is currently being sold for 20-25k (depending on condition, miles etc).

So if you bought a brand new 2015 toyota avalon, drove it for 4 years till now, and sold it, you would lose about 7-12k total, less then leasing even with the 3 year/2 year setup above, and significantly less then just a straight up 2 year lease. That isn't exactly fair though as your getting a new car every 2 years, but the cost to lease the same car for 4 years would still be about 2x the cost to buy the car,and then sell it after 4 years.

Therefore in my opinion, buying used > buying new > Leasing....finacially at least (and as long as you can actually get a car loan or afford to buy a car yourself.

Can't afford to buy the car straight up? Lease can work...but I'd still say your waaay better off buying a good used car (have a mechanic expect it before purchasing, run it's vin for accident reports etc).

That 2015 20k toyota avalon? It will probably drop about 5-8k total over the NEXT 5 years, so if you bought it......you could drive a very nice, comfortable fairly new car for 5 years and end up paying only a bit over 1k per year to do so.....waaaay better option (New or lease would cost significantly more).
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Zangulus posted...

blu posted...

I was debating on a 2017 camry that was 3k less with 10k more miles without a CPO warranty. But I kinda wanted the 2018 since they redesigned it and the warranty was some peace of mind.

I could've got an even older one for less, but I was worried I'd buy something somebody mistreated.

You could have got the new one for the price of the old one.

I couldve got the 2018 Camry for 16k? Thats pretty far below kelly blue book and also truecar

My car's loan payment was like 3%, maybe even 2.5%....

I also wanted to just pay for it up front w/ a check, but they were giving $500 off if you took out a loan. They really wanted people to get locked into their financial services sector, which I guess is where the car dealers make all their money now. Paid as much as I could up front and then paid the rest off with the first monthly statement. Think I paid $30-$50 in interest.

I'm not rich...buying the car set me back at least 2 years on my savings for getting a house. I just didn't want to be paying interest on a car loan while waiting to accumulate savings for the house...

acesxhigh posted...

wolfy42 posted...

Buying a new car is almost the same as throwing money away in my opinion.

basically, lucky for us there are a lot of idiots out there increasing our supply of cheap 5 year old cars.

I tried looking for a car a few years old and was determined to not buy a new car. But I don't know if it was the cash for clunkers program, or that hurricane in NY/NJ that apparently ruined a ton of cars, or just car dealers cornering a market....
But when I looked, anything a few years old was now "certified pre-owned" (which I learned could include former rental cars that had over 100K miles on them in just 2 years) and cost at best $1000 less than a brand new car (list price). Then you add in the discounts and stuff for a new car you can get haggling with the dealer (hate that shit, btw) and it didn't even seem like I was saving anything on the price.
I'm sure for insurance costs, it's still cheaper.

But I ended up just getting the new car, I wasn't saving any money getting the "certified pre-owned" ones. If I had a friend looking to sell a car, it would've been different. But I don't trust buying a car off some random person via an ad...

Zangulus posted...

blu posted...

Zangulus posted...

blu posted...

I was debating on a 2017 camry that was 3k less with 10k more miles without a CPO warranty. But I kinda wanted the 2018 since they redesigned it and the warranty was some peace of mind.

I could've got an even older one for less, but I was worried I'd buy something somebody mistreated.

You could have got the new one for the price of the old one.

I couldve got the 2018 Camry for 16k? Thats pretty far below kelly blue book and also truecar

I got my new 2014 Mazda for 5k under bluebook.

Wow, good job. What tips do you have while looking?

I'm amazed that people will pay the price of a house for a car! The last new car I had was in 1971, $2200 Ford Torino fastback.

For the past 40 years, I generally buy $600- $1500 cars that last for 10 years or so. I got really ambitious last year, bought a broken BMW convertible for $1200 (broken rear springs, warped brake rotors, CEL with 13 trouble codes: vacuum leaks and IAC), have put another $1000 in it, great car and a blast to drive.
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