I need to lose my car payment.

[extrashaky]

Originally Posted by Dadhawk

Again, neither one of us is going to convince the other that our method is better.

Because, as a general statement, neither method is better. Each approach is better for some people and entirely wrong for others. The trick is to find the best approach for your situation.

Unfortunately there are always people who have no clue about financing who say really silly things like this:

Originally Posted by ckkone

... if you can't afford to pay cash for a car its out of your price range.

[strat61caster]

Originally Posted by stugray

If I have $25,000 laying around and I can either put the $25k into an account making 30% ROI and finance the car @ 3% OR I can spend the $25k on the car...... The SMART option is obvious.

And what precipitated this entire conversation was me bitching about how these things aren't real or come with caveats that don't apply to a lot of people.

A 30% ROI over decades is not comparable to putting money into a five year loan and living debt free imo.

Don't get me wrong, I agree with your personal plan, that's what I did, I just put my discretionary spending towards paying off the car instead of in an IRA or going over my employer matching towards my 401k but the blanket statement of "Invest! You'll have more money!" is not so simple as we are talking about a five year plan not a 10, 20, 30 or 40 year plan.



Did the math this morning, if I hadn't paid off my car and invested the several hundred extra per month in my 401k I'd be (very roughly) -$5k net worth right now, while those extra couple thousand might have been a couple tens of thousands of dollars in the bank when I retire if I lose my job next month I'll still own reliable economical transportation and my liquid savings will stretch much longer.

This conversation really hammered home for me how much variability there is in the risks one is willing to take, what each individual sees as their primary financial goals. I've known too many people that never got to cash out on their retirement plans, life is short, I'll take the bacon cheeseburger while I can.

[TheVoiceOfReason]

If people only paid cash for cars this car would have never been produced. The demographic that its targeted toward has student loans, rent/house payment, and has probably only just started making enough money to save anything meaningful.

Can you imagine the kind of crap that would be on the roads if we all had to save and pay cash?

[Dadhawk]

Originally Posted by TheVoiceOfReason

If people only paid cash for cars this car would have never been produced. The demographic that its targeted toward has student loans, rent/house payment, and has probably only just started making enough money to save anything meaningful.

Actually, at least according to the marketing folks at the First 86 event in Long Beach, the audience was the "young thinkers" which was the market. The goal was to lower the average buying age of Toyota from the late 50's to somewhere in the 40s. It is not intended to be the "entry" car into the brand.

[Dadhawk]

Originally Posted by Dave-ROR

Semantics at this point. Different piece of plastic with the same result. My Debit cards for my two banks don't get me shit

You have to look for them. The one for my credit union does. The two pieces of plastic are very different though.

[Tcoat]

Originally Posted by TheVoiceOfReason

If people only paid cash for cars this car would have never been produced. The demographic that its targeted toward has student loans, rent/house payment, and has probably only just started making enough money to save anything meaningful.

Can you imagine the kind of crap that would be on the roads if we all had to save and pay cash?

There would be none on the road and very few jobs because like I said waaaaay back in the thread the auto industry would dissolve and take the entire world economy with it!

[Dadhawk]

Originally Posted by Tcoat

There would be none on the road and very few jobs because like I said waaaaay back in the thread the auto industry would dissolve and take the entire world economy with it!

Industry would find a way, or we would do like Cuba and keep the current cars on the road for decades.


Ford originally only sold cars on a "layaway plan" because Henry Ford hated the thought of credit. GM (and GMAC) won out though because they fed the "instant gratification" needs of the American that goes all the way back to the Pilgrims and runs smack through Thomas Jefferson up to today.


You could say its on our genes here in the States.


Good article about that can be found here.


http://americanradioworks.publicradi...ndream/b1.html


In the end, its different strokes for different folks. I'm good with whatever works for the individual, just don't tell me that somehow I'm inferior because I prefer a different path.


As Woody said in Toy Story "Stop it, you zealots! "

[marcosowns]

Originally Posted by Dadhawk

http://americanradioworks.publicradi...ndream/b1.html

Great article and read! It definitely has a good summary at the end:

In other words, there's a bumper sticker pasted to the tailgate of the modern American dream. It reads: "I owe, I owe, so off to work I go."

[Dave-ROR]

Originally Posted by Dadhawk

You have to look for them. The one for my credit union does. The two pieces of plastic are very different though.

Since neither of us carry a balance nor pay interest on the funds I see little difference. Except for the assume interest I get on the money in my interest checking account for a few extra weeks lol

[Dave-ROR]

Originally Posted by Dadhawk

Industry would find a way, or we would do like Cuba and keep the current cars on the road for decades.


Ford originally only sold cars on a "layaway plan" because Henry Ford hated the thought of credit. GM (and GMAC) won out though because they fed the "instant gratification" needs of the American that goes all the way back to the Pilgrims and runs smack through Thomas Jefferson up to today.


You could say its on our genes here in the States.


Good article about that can be found here.


http://americanradioworks.publicradi...ndream/b1.html


In the end, its different strokes for different folks. I'm good with whatever works for the individual, just don't tell me that somehow I'm inferior because I prefer a different path.


As Woody said in Toy Story "Stop it, you zealots! "

I don't think anyone believes anyone else is inferior. We all agree that everyone should pick the best path for themselves.

I owe 10k or so on my BRZ. If I lose my job I can sell it or pay it off from my savings account and not touch investments. I'd sell it since I can insure two other cars for what the BRZ costs to insure I would likely pay it off first though to make the transaction easier

[Dadhawk]

Originally Posted by Dave-ROR

Since neither of us carry a balance nor pay interest on the funds I see little difference. Except for the assume interest I get on the money in my interest checking account for a few extra weeks lol

It goes back to how you perceive risk. I agree in practice between us there isn't much difference on a day-to-day basis. It's the when "things go wrong" there are differences.

[Dave-ROR]

Very disappointed at the lack of activity in here today

[Tcoat]

Anybody that pays cash is a goof!


There you go @Dave-ROR

That should get some action.

[Linseal]

Originally Posted by Dave-ROR

Because people can't predict the future? And of course, some just make horrible financial decisions.


For all we know this guy was laid off, or had a kid, or had any other number of major financial impacts happen that has led to this which were unplanned 3 years ago when he bought the car.


In the second case, it's just because they want what they want and are too short sighted/impulsive to look at the big picture.

I haven't checked this thread in a long time, but yeah, I'm getting married and with that marriage comes a 5 year old child.

Since I posted this I decided to keep the car and finish paying it off. I still want a nice family car though. I'll probably pick that up when the FR-S is paid off.