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Old 01-24-2020, 12:40 AM   #43
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If you have two cars and the Camry is your main car the FRS should not be too bad insurance wise. Multi car discount with the FRS as a weekend summer car.

As far as the Dave stuff he is a little extreme but in a situation like this I really have a hard time recommending you take on debit when you obviously don't need to. If you want to build credit then save the entire amount take the loan and only keep it 6-8 months. Huge bump in credit to pay off auto loan early and you will need credit for a home loan.

And you should be starting to invest if your not already. OP sounds smart so he might be. Dave's plan is extreme but the basic principles are solid.

Good luck!

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Old 01-24-2020, 09:01 AM   #44
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Haha, Dave Ramsey is pretty extreme. One thing he says that I disagree with is never needing to use credit, but you can't build a credit score without any credit, which is kinda important?
If you never use credit, you don't "need" a credit score. Yes, there are things that may be more expensive if you don't have one, but there are also a lot of snakes in the debt basket.

The secret is to not have a bad credit score. A full lack of a credit score is not considered bad in situations where you aren't trying to borrow money.

I have an excellent credit score but carry zero debt, including having paid off our mortgage (our only debt) 5 years ago. Frankly, I have no idea why.
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Old 01-24-2020, 10:45 AM   #45
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You have to take on debt in order to prove you're a reliable debtor, thus pushing your credit score up. The trick is to maintain a small, ongoing amount that influences the accumulative rating positively over time, without the actual amount becoming a liability..
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Old 01-24-2020, 12:57 PM   #46
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You have to take on debt in order to prove you're a reliable debtor, thus pushing your credit score up. The trick is to maintain a small, ongoing amount that influences the accumulative rating positively over time, without the actual amount becoming a liability..
The error in your statement is "have to take on debt" because you don't have to do it. Its still a choice. A credit score is not something you have to have, although its hard to convince most persons otherwise.
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Old 01-24-2020, 01:06 PM   #47
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The error in your statement is "have to take on debt" because you don't have to do it. Its still a choice. A credit score is not something you have to have, although its hard to convince most persons otherwise.
Of course....no one is making you have a credit rating. BUT, if you want to buy a car or rent an apartment or do any other sort of normal thing that involves credit, it's a pain in the ass without a good number, and the number comes from taking on debt and paying it off over time. Be smart about what debt you take on; take a out a small personal loan from your bank and repay it quickly. Repeat the process a few times, with increasing amounts. Get a credit card and keep a ~100 balance on it all the time, so the account stays active. Watch your rating improve, with almost no effort on your part.

Not having debt does not automatically mean you'll have a good credit rating.
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Old 01-24-2020, 01:14 PM   #48
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Of course....no one is making you have a credit rating. BUT, ..
With a car, it only matters if you want to borrow the money to buy the car. That has nothing to do with buying the car, that's taking out a loan. The dealership will happily sell you the car without the loan (but I get your point). A person could say the same about that new TV she can't really afford, or the $4000 suit he thinks he has to have, its just so ingrained into the American car buying process that you have to have a loan, most people never consider just buying what they can afford.

It makes it a little more difficult to rent an apartment sure, and it could possibly increase your cost of insurance, but it's marginal. In the case of an apartment it might require a bigger deposit. With insurance, you may have to shop around more.

Your advice, if you care about having a credit rating, is solid, no argument there, its just not mandatory.
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Old 01-24-2020, 01:34 PM   #49
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With a car, it only matters if you want to borrow the money to buy the car. That has nothing to do with buying the car, that's taking out a loan. The dealership will happily sell you the car without the loan (but I get your point). A person could say the same about that new TV she can't really afford, or the $4000 suit he thinks he has to have, its just so ingrained into the American car buying process that you have to have a loan, most people never consider just buying what they can afford.

It makes it a little more difficult to rent an apartment sure, and it could possibly increase your cost of insurance, but it's marginal. In the case of an apartment it might require a bigger deposit. With insurance, you may have to shop around more.

Your advice, if you care about having a credit rating, is solid, no argument there, its just not mandatory.

Depending on where you're trying to rent, not having a credit rating (let alone a bad one...) could absolutely mean the difference between getting in or not. But the reason it's such a big deal with cars is that, next to buying a house or sending a kid to college (both done through obtaining loans, btw...lol), buying a new car is just about the largest single purchase a person will make. And not many people have $30+K sitting around as liquid. Sure, you can skip the bank loan and ask the dealership for a loan, but with no credit or bad credit, you're a huge risk, so you'll be paying ridiculous interest rates, whereas a loan through a bank or dealership with excellent credit and associated low rate can actually be a smart move. There's always low single digit financing programs available through manufacturers or banks...you won't pay much in interest, and your credit goes up in the process. They key is to not spread it out across a long term.

I have a good friend who is now in his mid 60s who, for the first 50 years of his life, never even had a checking account. His paycheck went in the bank, and he payed his bills in person, in cash. Never had any debt. But even he had to give up on that lifestyle. Try doing that today....it's a total pain in the ass, at best. Lots of utilities and government agencies like RMV won't even accept cash payments in person any more..!! How's that for some irony...the government won't accept it's own currency...
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Old 01-24-2020, 01:57 PM   #50
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..But the reason it's such a big deal with cars is that, next to buying a house or sending a kid to college (both done through obtaining loans, btw...lol), buying a new car is just about the largest single purchase a person will make. And not many people have $30+K sitting around as liquid....
The thing is, and this is only my opinion but is the way I live, what you are saying is the person can't afford the car, and doesn't want to take the time to plan and save to buy the car. They are going to buy what they can afford, which is a debt that comes with the benefit of being able to use a car they will eventually own.

If you take out a loan for a car what you are really saying is "if I saved $xxx for x years, I can afford this car I really want, instead of this car over here I can afford now" but rather than doing that you have to have it now. That's OK, it's an individual decision to do that. I just suggest you not fool yourself about what you are doing. You are buying something you can't really afford by paying something you can, assuming that there is no risk in doing so.

That's different than how about 99% of Americans live, I get that. The thing is I could easily afford the payment on a $150,000 car, but I drive what is now a $10,000 car that I paid $27,000 for 7 years ago because I don't want the car payment.

I did the same thing 40 years ago in high school I do today. I bought a $400 car, saved money for a year, sold the $400 car for $350 and bought a $750 car. I did this through high school and college until I had bought a new car for cash without it having any real impact to my life. You just have to break the cycle once to never have a car loan again.

Now, have I never had a car loan, no. But in those cases, I could have bought the car for cash, just chose to leave the money in the bank because of some zero interest loan or some such. However, there was no risk because I could always pay the car off.

Nothing is wrong with either approach, as long as you are fully aware of what you are doing and have considered the consequences and the risk.

Now before @Tcoat has to "moose girl" me, I think I've said all I can say about this and that's all I can say!
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Old 01-24-2020, 02:09 PM   #51
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Depending on where you're trying to rent, not having a credit rating (let alone a bad one...) could absolutely mean the difference between getting in or not. But the reason it's such a big deal with cars is that, next to buying a house or sending a kid to college (both done through obtaining loans, btw...lol), buying a new car is just about the largest single purchase a person will make. And not many people have $30+K sitting around as liquid. Sure, you can skip the bank loan and ask the dealership for a loan, but with no credit or bad credit, you're a huge risk, so you'll be paying ridiculous interest rates, whereas a loan through a bank or dealership with excellent credit and associated low rate can actually be a smart move. There's always low single digit financing programs available through manufacturers or banks...you won't pay much in interest, and your credit goes up in the process. They key is to not spread it out across a long term.

I have a good friend who is now in his mid 60s who, for the first 50 years of his life, never even had a checking account. His paycheck went in the bank, and he payed his bills in person, in cash. Never had any debt. But even he had to give up on that lifestyle. Try doing that today....it's a total pain in the ass, at best. Lots of utilities and government agencies like RMV won't even accept cash payments in person any more..!! How's that for some irony...the government won't accept it's own currency...
Off topic: If people lived within their means loans and/or credit would be rarely ever used. Debt causes stress and depression more than it does any good. Sure people don't have 30k sitting around to buy a car or 200k to buy a house, and most people don't need a 30k car or a 200k house either.

Loans can be beneficial when used responsibly, sadly most Americans don't know how to be financially responsible. Eliminating personal debt should be everyone's goal, but that would require not getting the newest everything all the time...

As far as college, 2 things; 1. College is not a requirement for everyone. 2. Going to college does not require loans.

Says the guy who has 2 debts, 1 car & 1 house. Both will be paid off long before their full loan term, and has a college aged daughter that has no debt, is in her last year off college and preparing to go for her graduate degree. And no, I didn't fund it for her.
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Old 01-24-2020, 02:11 PM   #52
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The insurance is the only thing I gotta worry about, Paying for both the fr-s and my camry, but im sure its doable.
Many people on here have mentioned it but I just want to stress the importance of this. Please make sure to get insurance quotes!! Don't assume, this one bit me in the butt a bit more than I was expecting.

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Old 01-24-2020, 02:13 PM   #53
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Many people on here have mentioned it but I just want to stress the importance of this. Please make sure to get insurance quotes!! Don't assume, this one bit me in the butt a bit more than I was expecting.
Good point @noodle. Definitely make sure the insurance doesn't make it a deal breaker before you get into it.
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Old 01-24-2020, 02:17 PM   #54
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As far as college, 2 things; 1. College is not a requirement for everyone. 2. Going to college does not require loans.
Absolutely this.

I have three sons, all who graduated college debt free, that was one of my life goals. They did it by going to state schools, working, renting their books and sharing an apartment they could afford. if you do it right, and don't finance lifestyle, there is no reason you can't graduate from a state university debt free.

Now if you "have" to go to an Ivy League school then, well, that's on you.
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Old 01-24-2020, 02:19 PM   #55
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I bought my FRS when I had it back at 18. Did a 20k Loan and payments were about 260ish for 5 years and insurance was about 550 with full coverage for 6 months. Its the mod bug that will get you and that's what will make you broke lol.
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Old 01-24-2020, 02:53 PM   #56
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Off topic: If people lived within their means loans and/or credit would be rarely ever used. Debt causes stress and depression more than it does any good. Sure people don't have 30k sitting around to buy a car or 200k to buy a house, and most people don't need a 30k car or a 200k house either.

Loans can be beneficial when used responsibly, sadly most Americans don't know how to be financially responsible. Eliminating personal debt should be everyone's goal, but that would require not getting the newest everything all the time...

As far as college, 2 things; 1. College is not a requirement for everyone. 2. Going to college does not require loans.

Says the guy who has 2 debts, 1 car & 1 house. Both will be paid off long before their full loan term, and has a college aged daughter that has no debt, is in her last year off college and preparing to go for her graduate degree. And no, I didn't fund it for her.
You can have debt and credit and still be living well within your "means". As you then followed up as long as you are responsible with that debt and credit it is not an issue. A person that is irresponsible with their debt can be just as bad with their cash though so living within their means can still be impossible since they will just short the necessities for the luxuries.
We should just get rid of all monetary forms of commerce and go back to barter! I will give you 3 goats and a chicken for your next restoration project.
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