Quote:
Originally Posted by monstar369
Putting 7k down is way too much. It would be better to save that money and use it toward payments. IMO
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What? Higher down payment means less interest paid and a lower monthly payment. Unless you get 0% APR, the more you can pay up front the better.
Quote:
Originally Posted by Atropine
never ever ever agree to a 72 month loan...
Also, later in thread this guy says not to put 7k down.
Monstar may be a smart guy, but his financial advice is shit.
A rule of thumb on on 60 month loans is...every thousand dollars will equal about 20 dollars a month.
So, 7k down saves you 140$ a month in payments. Also avoids interest.
As a younger person, you most likely will get a bad interest rate...we all have been there.
It sucks, but you should pay interest on a car you like and will enjoy...not a POS.
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There's nothing wrong with a 72 month loan, especially if you're turning around and talking about a 60 month loan...
Quote:
Originally Posted by slipdog
No, this is a terrible choice.
For a $27k car if you put $7k down and get a loan at 3.99% your payment will be $368.24 for a 5 year loan. Over the course of the loan you'll pay $2094 in interest. So that is money that is just plain gone. The car will also decrease in value probably about 50%. So 5 years from now, you will have spent over $29k on a car that's worth around $13k-$14k.
If you take that monthly payment and invest it, then you will have somewhere around $22k-$28k in cash sitting in the bank (this is not including your $7k down payment).
How secure is your job? If you lose your job can you still afford car payments? If you get in an accident can you fix your car and pay for it if you can't work?
What if medical bills pop up? Will you have money leftover for the car if you have to drop a couple thousand on a procedure?
Also it makes no sense to "save" money for payments. That only causes you to lose more money in interest and you get close to the line of having to lose more money on gap insurance.
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Cars are
NOT investments and should never ever be compared to investments. While your advice is sound, the security of having a new reliable car that gets great gas mileage and that you enjoy offsets the issues of depreciation.