Moving on.

[CBR600RR]

As I stated my FR-S was finally paid off. If I didn't trade it in when I did, my irrational mind likely would have spent the freed-up $450/month car payment on silly things like car and motorcycle mods. Then I'd have a turbo'd FR-S daily driver that is arguably worth even less. My rational mind said trade in before your dumbass goes spending all that freed-up money. This way with the GTI, I get a new daily driver that I will modify modestly until it is paid off in 4 years. And the cycle begins again. BUT who knows? maybe my outlook will change over that period of time,,, and I will hopefully be wealthier to boot.

[YangerD]

The GTI is a great daily driver! I used to have access to one when I worked with VW and I always took the GTI when I had the chance to use a company car. They are great fun in stock form so I can only imagine after a simple stage 1 flash.

[Spacemane969]

Originally Posted by extrashaky

No it isn't. Get your head out of the monthly payment. That's not the cost of the car. Your out the door price really has very little to do with how much you pay each month if you finance.

At the time I bought my BRZ, I wasn't sure how these cars were going to hold their value, so I wanted a short loan term so that I wouldn't ever be upside down on it in case disaster struck and I needed to sell it. I put $5K down and bought a 48 month loan on the rest at a credit union at a price of 1.49%. I paid about $800 in interest over the life of the loan, which really isn't very much. I had budgeted up to $1000 per month for a new car, so my monthly payment was quite comfortable as far as my monthly cash flow went.

It's really the loan term that has the biggest impact on monthly payment, with interest rate coming second. For example, if I had bought a 36 month loan instead, I would have still had a 1.49% rate, and my payment would have jumped up to $739. But I would have saved about $200 in interest with $602 total interest on the loan. A higher monthly payment would have actually been less expensive.

If I had wanted a lower payment, I would have had to buy a loan with a longer term. With a 60 month loan, my interest rate would have jumped up to 2% (because a longer loan term is a bigger risk for the lender). Then my payment would have dropped to $456, but the total interest would have jumped to $1343. The lower payment would have been more expensive.

My credit union didn't offer a 72 month loan, because there's too much risk to the lender in a loan term that long to be able to offer a reasonable rate. If I had found one elsewhere, my rate would likely have been at least 4%. At 4%, the monthly payment would have been $407 with a ridiculous $3,288 in interest. And I would run a high risk of being upside down on the car throughout a significant portion of the loan term, unable to sell it without taking a big loss and having to come up with additional cash out of pocket to pay off the loan so that the sale could even take place. It's likely that if you're being forced to sell, you don't have that cash available in the first place.

I'd be paying the same principal no matter what. But the option with the lowest monthly payment would have added almost $2500 to the cost of the car compared to what I paid and would have been much riskier to me personally. It's all that extra interest that would be "a lot for this particular car," not the monthly payment on the 48 month loan.

This is almost exactly how I paid on mine but it was used at 20.5k value. 5k down, Got a ridiculously low interest rate and paid 800 to 1000 a month on it when I could(overpaying the principal extends the due date). Took a tad over 2 years.

Receiving my title was the second best feeling other than driving off the lot. I hate the feeling of being indebted to someone else.

[strat61caster]

Some people just can't be taught how to be good with money.