I need to lose my car payment.

[stugray]

Originally Posted by strat61caster

Seriously, people need to back that shit up or I'll place you in my Dr. Oz and Dr. Phil category of advice givers.

Buy some Lockheed or Ball Aerospace stock.

I had a boatload of Lockheed stock in 2000 @$30 a share.
Its now above $200 a share for a yearly ROI of ~40%

But I understand the point. A car salesman once explained:
With a 0% intrest rate car loan, not only should you NOT put any money down, but take cash back if you can.
Use that cash to pay down some CC debt that is costing you 10% or more....

[Tcoat]

Originally Posted by strat61caster

I hear this all the fucking time and even repeated it once or twice: but where the FUCK can you get a >3% return on a <5 year investment guaranteed?

Seriously, people need to back that shit up or I'll place you in my Dr. Oz and Dr. Phil category of advice givers.

I did not say I was making a killing but I do get a small return.
Remember I am in Canada and have other options available to me.
My wife is an accountant and finance manager for a huge RV dealership and handles that part so I don't have the details. All I can say is it has something to do with Registered Retirement funds. My finance rate is only 1.4% so it doesn't take a 3% return to get a small gain.


Do like your reference to the good "doctors" though!

[Dave-ROR]

Originally Posted by Jyn

Something I heard poor people have.

Something people who make far more off $20k of investments over 5 years compared to 1.9% interest have also.

[Dave-ROR]

Originally Posted by BlackMonarch

The suspicion I'm talking about comes in to play regardless. Dealers want to make money, but they don't want to get fucked on the trade either. Yes, I have worked in lending, I worked in finance for a Honda dealership for quite some time.

The banks do know what you're trading in, in cases where there is negative equity involved, i.e. rolling some money on to the new loan, it's a required disclosure. And yes, I'm aware it's mostly in the case of poor credit where these things comes in to play, however I would assume if the OP had substantial cash flow this wouldn't be coming up in the first place.

I like how, at the end of your post, you admit my suggestion is a good one, despite disagreeing with everything I said.

He's clearing not negative here. He stated his balance in the first post.


You still were very unclear on the refi. The one ways to have a lower monthly payment when refinancing a car loan are 1) lower interest rate or 2) longer payment schedule than the current loan has left.

[Dave-ROR]

Originally Posted by ckkone

I don't understand why people buy cars they can't afford in the first place? If you can't pay cash for a car then it is to expensive for you.....

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.

[Dave-ROR]

Originally Posted by srt4evah

Exactly. I got 1.65% on my ISF, and if/when I get an FRS I'll be financing that at the same rate. I could pay cash for either, but why would I do that when I could use that cash to return 30-40% annually with a few good investments, and let the bank get 1.65% from me...?

You need to send me your list of investments. I certainly have made a fair bit more on the money I could have spent on the BRZ in cash on my investments but 30-40%... lol no... even compounded/reinvested/etc over that 5 years...

[Jyn]

Originally Posted by Dave-ROR

Something people who make far more off $20k of investments over 5 years compared to 1.9% interest have also.

So... 3 people on this forum?

[Tcoat]

Originally Posted by Dave-ROR

You need to send me your list of investments. I certainly have made a fair bit more on the money I could have spent on the BRZ in cash on my investments but 30-40%... lol no... even compounded/reinvested/etc over that 5 years...

Ya I want it too and here Strat is given' me crap because I claim to make 1%!!!!

[Dave-ROR]

Originally Posted by strat61caster

I hear this all the fucking time and even repeated it once or twice: but where the FUCK can you get a >3% return on a <5 year investment guaranteed?

Seriously, people need to back that shit up or I'll place you in my Dr. Oz and Dr. Phil category of advice givers.

I could pull out my YOY return data for the past three years with some math. I normally do a 3-4% return YOY every year. I track every investment I have twice a month and track gains and losses and separate old from new, which is a pain in the ass, but whatever.


edit: Except for 08, 09 and I think 10 but can't recall anymore. "Every year since I've had the BRZ" would have been a better statement. No one (that I know of) did well in 08/09 I think I lost on almost everything except MSFT and Honda because I sold at a good time. Kept the rest and they've pretty much come back but certainly that slowed down my investments.. I think I lost ~60k during that time +/- a couple.. Made a few good purchases near the end of that.. and some disastrous ones... thanks GM!

[strat61caster]

@Dave-ROR @stugray soooo stocks.

IMO stocks are basically gambling, not an investment especially when compared to a car loan, I would rather pay off a car loan, per Dave's post if someone had bought a car in '07 and decided to follow the "invest the cash for greater returns than the loans over five years!" they would have come out behind someone who paid cash for their vehicle.

I believe I have a decent grasp of the value of the stock market and long term investing and that's certainly a fine strategy, but to tout it as beneficial over eliminating debt on a non-appreciating asset (hellloooo GAP insurance) is still a fools argument imo, you haven't convinced me.

@Tcoat certainly comparing a long term retirement plan to a short term car loan, put your money in the retirement plan, but that's not what was implied by your post which I took as: "you'll have more money making payments for five years and investing the cash you would have used to pay it off!" which is typically the selling line in these types of posts. While your wife has a few tricks, for the rest of us we are usually restricted to having to go through companies that take a slice of our money (usually in the 0.2% to 1.8% range) meaning we must choose investments that will consistently outdo typical car loan rates of 1%-3%.

To be clear, I'm speaking for the average consumer, a guy with ~$25k cash who can either buy a car outright or invest a large chunk of it while making minimum payments over five years. I have yet to see a sound plan for higher returns on investment, it always follows the market i.e. gambling. To reiterate, great long term plan but we're talking about a five year plan here, considering the last two recessions were 4+ years.

*insert some stuff about compounding interest and being rich tomorrow rather than debt free today*

The wealthiest guy I know lived within his means and paid cash for all his cars. The reality is that the kind of person who has the cash laying around for a brand new car will continue making investments over the next five years, if they can't, they aren't living within their means.

*strat61caster runs off to check his 401k

[Dadhawk]

Originally Posted by stugray

But I understand the point. A car salesman once explained:

With a 0% intrest rate car loan, not only should you NOT put any money down, but take cash back if you can.

Use that cash to pay down some CC debt that is costing you 10% or more....

Yea...not sure I'd take financial advice from a car salesman, particularly hocking a "0% interest" loan. There is no such thing.

Somebody is eating the interest and it ain't the car company. It's built right into the invoice price as a cost of doing business, just like "corporate" income tax.

[Dave-ROR]

Originally Posted by strat61caster

@Dave-ROR @stugray soooo stocks.

IMO stocks are basically gambling, not an investment especially when compared to a car loan, I would rather pay off a car loan, per Dave's post if someone had bought a car in '07 and decided to follow the "invest the cash for greater returns than the loans over five years!" they would have come out behind someone who paid cash for their vehicle.

I believe I have a decent grasp of the value of the stock market and long term investing and that's certainly a fine strategy, but to tout it as beneficial over eliminating debt on a non-appreciating asset (hellloooo GAP insurance) is still a fools argument imo, you haven't convinced me.

@Tcoat certainly comparing a long term retirement plan to a short term car loan, put your money in the retirement plan, but that's not what was implied by your post which I took as: "you'll have more money making payments for five years and investing the cash you would have used to pay it off!" which is typically the selling line in these types of posts. While your wife has a few tricks, for the rest of us we are usually restricted to having to go through companies that take a slice of our money (usually in the 0.2% to 1.8% range) meaning we must choose investments that will consistently outdo typical car loan rates of 1%-3%.

To be clear, I'm speaking for the average consumer, a guy with ~$25k cash who can either buy a car outright or invest a large chunk of it while making minimum payments over five years. I have yet to see a sound plan for higher returns on investment, it always follows the market i.e. gambling. To reiterate, great long term plan but we're talking about a five year plan here, considering the last two recessions were 4+ years.

*insert some stuff about compounding interest and being rich tomorrow rather than debt free today*

The wealthiest guy I know lived within his means and paid cash for all his cars. The reality is that the kind of person who has the cash laying around for a brand new car will continue making investments over the next five years, if they can't, they aren't living within their means.

*strat61caster runs off to check his 401k

I'm actually well diversified (stocks, CDs, bonds, etc). There's no way I would put all my eggs in one basket. People try that with real estate also, bad move as we all found out


I pay for most of my cars with cash, it's just when interest gets low enough (And when I was younger of course) that I get car loans. The only car I have right now that was not a cash purchase is the BRZ, including the other car that I bought new a long time ago that's in my sig. I'm not rich, but I have enough to invest about 20% of my income and still have multiple hobbies which are sadly expensive. No kids helps with that...


The real evil IMO is massive CC debt. I've had friends with 30-40k in CC debt which I thought was insane until I read people online in forums talking 100k+.. holy hell I can't imagine the feeling one would have with that hovering over your head

[Tcoat]

Originally Posted by Dave-ROR

The real evil IMO is massive CC debt. I've had friends with 30-40k in CC debt which I thought was insane until I read people online in forums talking 100k+.. holy hell I can't imagine the feeling one would have with that hovering over your head

How the hell does anybody get $100K worth of credit on cards anyway?
Again no financial expert but don't think you could even manage that here with the limits and monitoring the card campiness have.

[BRZZZZZZZZZZ]

Jeezus I try to avoid using my credit card as much as possible.

I pay cash for my mods and finance my car though :P