Darn car salespeople.....

[Diamondpilot]

Actually, anyone can pay cash. They just need to have the discipline to put those monthly payments into savings before hand instead of into loan payments after the fact. Plus, you save the finance fees. My dad used to do this even back in the 1950's and he just worked as a factory worker.

This is what I have done for the last 4 vehicles and two boats.

Chris

 

[RollingsFarms]

I was at an outdoor show recently and saw many boats that were "show specials" with financing up to 120 months. I also noticed the much higher interest rates on the atv's and utv's they had. Some were up to 8% for 60 months. No thanks.

 

[JDgreen227]

This is what I have done for the last 4 vehicles and two boats.

Chris

I envy those who can pay cash....but for the vast majority of folks I know, they would never have that ability, myself inclusive. I know a guy who is struggling to make his condo payments as well as care for his wife and three kids on $13.65 an hour...know what he drives? A Saturn Ion with close to 160,000 miles on it. How is anyone like him ever going to save enough for a new car or boat? As for me, I earn more now than I did while working full time...yet it would take me close to 4-5 years to save enough to pay for a new $30,000 vehicle. Glad I don't need one. I drive maybe 4500 miles a year at most and although my 2004 Saturn is 11 years old, I would have no misgivings about taking it to California tomorrow morning

 

[Diamondpilot]

I envy those who can pay cash....but for the vast majority of folks I know, they would never have that ability, myself inclusive. I know a guy who is struggling to make his condo payments as well as care for his wife and three kids on $13.65 an hour...know what he drives? A Saturn Ion with close to 160,000 miles on it. How is anyone like him ever going to save enough for a new car or boat? As for me, I earn more now than I did while working full time...yet it would take me close to 4-5 years to save enough to pay for a new $30,000 vehicle. Glad I don't need one. I drive maybe 4500 miles a year at most and although my 2004 Saturn is 11 years old, I would have no misgivings about taking it to California tomorrow morning

We drive tons of miles. Currently we are putting 24,000 miles a year on my wife's car and 20,000 on my main truck.

Paying cash is not hard. You just have to discipline yourself. I pay $400 per month per vehicle into an account. This is my budget. I know others will vary. In 5 years that works out to about $25,000 dollars. I usually get between $15,000 & $20,000 for the vehicle I'm stepping out of so that puts me in a new vehicle easily.

Chris

 

[aczlan]

I envy those who can pay cash....but for the vast majority of folks I know, they would never have that ability, myself inclusive. I know a guy who is struggling to make his condo payments as well as care for his wife and three kids on $13.65 an hour...know what he drives? A Saturn Ion with close to 160,000 miles on it. How is anyone like him ever going to save enough for a new car or boat? As for me, I earn more now than I did while working full time...yet it would take me close to 4-5 years to save enough to pay for a new $30,000 vehicle. Glad I don't need one. I drive maybe 4500 miles a year at most and although my 2004 Saturn is 11 years old, I would have no misgivings about taking it to California tomorrow morning

If one is making that little, one should save up for a $5-10k used car and go from there.
I drive a '97 Volvo V90 with 135k miles on it, it has ended up by the side of the road once. Once with a bad heater valve (was dark and my flashlight had dead batteries so I couldn't see what was up, just that I lost all coolant), that was $130ish for a tow and $15 for a new valve. I will have owned it for 5 years in Nov and will have put close to 50k miles on it. I paid $3500 for it and have put $1000ish into repairs and maintenance.
Until April, my wife drove a '02 Caravan which had ~130k miles on it when we sold it (purchased with ~90k miles). We paid $4000 for it ~5 years ago and it cost $1500ish between repairs and 2 sets of tires (a set of regular tires and a set of snowtires). It left her by the side of the road twice (once with a bad PS return line and once with a rusted brake line. She could have driven it home both times, but I came and drove it home for her so that she and the kids could take my car)
With respect to taking out a loan, a 5 year loan at 4.03% on a 30,000 car will cost $6617 in interest (per: How much interest will I have to pay?, 4.03% is the lowest 60 month auto loan interest rate I could find in a 30 second search), not counting sales tax (~8% or $2400 here in NY on $30k) or registration fees.
Unless you HAVE to have a new car or are spending more than $1300/year in repairs, it might be worth saving that $6617 and putting the money you would have spent on a car away where its earning you interest and then paying cash for a car.
If you cant afford to save up for a car, how can you afford to pay interest on one?

Aaron Z

 

[two_bit_score]

I envy those who can pay cash....but for the vast majority of folks I know, they would never have that ability, myself inclusive. I know a guy who is struggling to make his condo payments as well as care for his wife and three kids on $13.65 an hour...know what he drives? A Saturn Ion with close to 160,000 miles on it. How is anyone like him ever going to save enough for a new car or boat? As for me, I earn more now than I did while working full time...yet it would take me close to 4-5 years to save enough to pay for a new $30,000 vehicle. Glad I don't need one. I drive maybe 4500 miles a year at most and although my 2004 Saturn is 11 years old, I would have no misgivings about taking it to California tomorrow morning

It's hard to see how he could not save up the money if he is making payments. Might take some redirection of efforts but has to start somewhere if he's ever going to get out of bondage to a car note.

I still think the best way get started on the right way to finance a car is through a CD note. You save up a certain amount and put it in a CD for 36-48 months. Then you take the CD and put it up as collateral for the car and start using the money you were putting into the CD as a car payment. Since the CD is the collateral not the car then you pay only a slightly higher interest rate on the note than what your CD is paying. At the end of the note your car is paid off and you still have your CD which you continue adding to with the payments you were making on the note. Eventually you might decide to just take the CD and buy a car but I bet it will be harder than you think to part with that cash. But you CAN if YOU want to do it.

 

[ultrarunner]

My two trucks, a 85 and 91 Chevrolets are both just shy of 170k miles... I drive them all the time for work... both were cash purchases years ago.

My Grandfather started in the car business in the 1920's and I brought a lot of my friends and teachers to him when car shopping.

He would offer this advice to my friends... situations change and you never want to be upside down on a car... in other words owe more than it is worth...

Most listened and chose a Used Car they could pay off in two years or a new car in three...

 

[brt]

I once bought a new vehicle by researching exactly what I wanted (option packages, color, etc) and called 5 dealers. I gave them the info and told them that they have 1 week to give me their best price on the exact vehicle I wanted. Nothing other than cars matching my specs would be considered. 3 called me back and I went to the lowest guy and bought the car. It was almost pain-free. You have to do this early in the model year so the car selection for dealers is good.

 

[ultrarunner]

^^^ I did exactly the same and only 1 called me back and we made the deal on the phone and I gave him my credit card to put a $1000 deposit so he could order the car... picked it up in Germany in 2002 and still have it today...

 

[check]

I once bought a new vehicle by researching exactly what I wanted (option packages, color, etc) and called 5 dealers. I gave them the info and told them that they have 1 week to give me their best price on the exact vehicle I wanted. Nothing other than cars matching my specs would be considered. 3 called me back and I went to the lowest guy and bought the car. It was almost pain-free. You have to do this early in the model year so the car selection for dealers is good.

Let's hear it for the internet. Bought my new 2014 F150 that way. What fun! (Drives the salespeople crazy, however.)