What makes more sense...driving a long paid for old truck, or making huge payments??

[two_bit_score]

That's great, but what did it benefit you. What else could you have done over that period with the accelerated payments you made on that loan.

Same thing I'm doing with the money I set aside in my transportation fund.


TBS

 

[Diamondpilot]

I am in the save up and but camp. Big thing for me is no payments. I have not had a car payment in 15 years. We but new 95% of the time. Last two purchases were a Ford Edge and a Honda Civic. We get the same deal if not better by paying cash vs financing.

The main reason I like doing it this way is job loss protection. I lost my 6 figure job of 14 years in July of 2013 and 2 months later my wife lost hers. It took me 3 months to find another and her 7. If we had say 2 car payments at $500 each we would have had to come up with that $7000. Instead we didn't and sleep a little better at night knowing at least reliable transportation was not another burden.

 

[Egon]

Being prepared makes perfect sense. Using the money for other things can lead to many cases of too much Bubble Gum.

 

[bdog]

I am in the save up and but camp. Big thing for me is no payments. I have not had a car payment in 15 years. We but new 95% of the time. Last two purchases were a Ford Edge and a Honda Civic. We get the same deal if not better by paying cash vs financing.

The main reason I like doing it this way is job loss protection. I lost my 6 figure job of 14 years in July of 2013 and 2 months later my wife lost hers. It took me 3 months to find another and her 7. If we had say 2 car payments at $500 each we would have had to come up with that $7000. Instead we didn't and sleep a little better at night knowing at least reliable transportation was not another burden.

Exactly. I would never borrow money for a vehicle and have not done so in about 12 years. Debt equals risk. For many it works out fine until it doesn't. EVERY person I have seen that gets into a huge financial pickle has a bunch of debt. Car payment, House payment, furniture payment, tractor payment, boat payment, - Sure it is all low or no interest and you could theoretically invest the money elsewhere and make more but most people don't they just use that theory to rationalize financing everything. When you have a ton of monthly obligations and lose your income stream you can get in trouble really quickly.

 

[Diamondpilot]

Exactly. I would never borrow money for a vehicle and have not done so in about 12 years. Debt equals risk. For many it works out fine until it doesn't. EVERY person I have seen that gets into a huge financial pickle has a bunch of debt. Car payment, House payment, furniture payment, tractor payment, boat payment, - Sure it is all low or no interest and you could theoretically invest the money elsewhere and make more but most people don't they just use that theory to rationalize financing everything. When you have a ton of monthly obligations and lose your income stream you can get in trouble really quickly.

I have not had a payment on anything other than our home for about 15 years.

They try to tempt me with 0% interest but I don't fall for it. Boats, Cars, Trucks, Tractors, Furniture, ect is all bought with CASH when we can afford it!

 

[ovrszd]

Exactly. I would never borrow money for a vehicle and have not done so in about 12 years. Debt equals risk. For many it works out fine until it doesn't. EVERY person I have seen that gets into a huge financial pickle has a bunch of debt. Car payment, House payment, furniture payment, tractor payment, boat payment, - Sure it is all low or no interest and you could theoretically invest the money elsewhere and make more but most people don't they just use that theory to rationalize financing everything. When you have a ton of monthly obligations and lose your income stream you can get in trouble really quickly.

As my Dad always said, "It's not what you make, it's what you spend".

 

[coobie]

Like heated seats!

And steering wheel.

 

[oldballs]

As my Dad always said, "It's not what you make, it's what you spend".

Boy, that's not what I'm seeing in a lot of younger people these days. They "Charge it-Charge it-Charge it", many of which declare bankruptcy. But they seem to have no shame in doing so. I get the feeling that the rest of us responsible folks are paying for their bad habits.... e.g. not paying property taxes and then having the bill cancelled after five years. Am I wrong?

 

[ovrszd]

Boy, that's not what I'm seeing in a lot of younger people these days. They "Charge it-Charge it-Charge it", many of which declare bankruptcy. But they seem to have no shame in doing so. I get the feeling that the rest of us responsible folks are paying for their bad habits.... e.g. not paying property taxes and then having the bill cancelled after five years. Am I wrong?

Yep, in the cost of products adjusted to make up for those that don't pay.

 

[crazyal]

I financed simply because I had the cash but it was invested in stocks. With the stock market going up (I made about 10% last year with conservative investments) it was a no brainer. My loan is at less than 1% so I make about 9% by taking out a loan vs buying cash. The price I negotiated was the same as the dealership doesn't care who pays them, me or a bank. I could have used one of their preferred banks (they may get a kickback) but mine was lower. On the loan I will pay less than $800 over the entire length. If you take the same amount, say $25k over 6 years, and use an average return of 7% that $25k will become $37k. That's $11k you are giving up. Now that assumes that stocks will continue to go up. But with auto loan rates so low you don't need much of an increase to break even.