Down Payment?

[dura1198]

I put down $500 to hold it when it arrived at the dealer.

[RRnold]

Originally Posted by Zaggeron

What does depreciation have to do with it. You pay for the entire price of the car one way or the other. If we were talking about a lease, that's different. But if you are buying the car you will always pay less the more money you put down. The only time you should consider putting down less than you can afford is if you can make a higher rate of return on your cash than the interest you are paying.

A shit load to do with it!

I agree but the interest rates are the lowest we've ever seen them so it's almost same as cash (1.79% for those with excellent credit). Unless you have a monthly target budget that you need to stay within, keep the money in the accounts/cd/mm etc.

[Zaggeron]

Originally Posted by RRnold

A shit load to do with it!

I agree but the interest rates are the lowest we've ever seen them so it's almost same as cash (1.79% for those with excellent credit). Unless you have a monthly target budget that you need to stay within, keep the money in the accounts/cd/mm etc.

Hmmm, I guess I don't get how depreciation makes a difference when buying instead of leasing a car (other than the fact that high depreciation might make you choose a different car). You're on the hook for the entire purchase price no matter how much the car depreciates. If it depreciates fast and you have a low down payment, you might actually be underwater soon after you buy the car.

Anyway, If you can point me to a CD or MM account that pays better than 1.79% for a 3-4 years commitment, I'm all ears? You can get better than than in bond accounts or playing stocks, but cash makes no money right now.

[RRnold]

Originally Posted by Zaggeron

Hmmm, I guess I don't get how depreciation makes a difference when buying instead of leasing a car (other than the fact that high depreciation might make you choose a different car). You're on the hook for the entire purchase price no matter how much the car depreciates. If it depreciates fast and you have a low down payment, you might actually be underwater soon after you buy the car.

Anyway, If you can point me to a CD or MM account that pays better than 1.79% for a 3-4 years commitment, I'm all ears? You can get better than than in bond accounts or playing stocks, but cash makes no money right now.

If you have the ability to pay cash for this car and have at least enough to cover 9 months of all of your bills then for sure do it.

Navy Fed has some decent rates.
https://www.navyfederal.org/products...ates-rates.php

[Zaggeron]

Originally Posted by RRnold

If you have the ability to pay cash for this car and have at least enough to cover 9 months of all of your bills then for sure do it.

Navy Fed has some decent rates.
https://www.navyfederal.org/products...ates-rates.php

Yeah, that's what I meant by "afford". You gotta have some fallback cash even if it is not making you any money.

[Splat]

I do not think you need to be discussing how much you individually put down on a public forum. The general idea here: Put down however much you have that 1-leaves you at least 6months of living expenses in bank 2- ensures you can make your monthly payment without going without basic items 3- You do not see a place to put the extra cash that will generate 5% return(GOOD LUCK ON THIS ONE), over the life of the car loan.
Now if you have credit cards, and you have an outstanding balance of over 5k, skip the car and get it after you have no credit card debt.

[RRnold]

Originally Posted by Zaggeron

Yeah, that's what I meant by "afford". You gotta have some fallback cash even if it is not making you any money.

But going back to our discussion, paying 27K cash or financing 27K. Its not a bad idea to take advantage of the low interest rate instead of blowing it 27K on a car that will lose 2K the moment you drive off the lot.

[Zaggeron]

Originally Posted by Splat

I do not think you need to be discussing how much you individually put down on a public forum. The general idea here: Put down however much you have that 1-leaves you at least 6months of living expenses in bank 2- ensures you can make your monthly payment without going without basic items 3- You do not see a place to put the extra cash that will generate 5% return(GOOD LUCK ON THIS ONE), over the life of the car loan.
Now if you have credit cards, and you have an outstanding balance of over 5k, skip the car and get it after you have no credit card debt.

Good advice! In general, figure all that stuff out before you hit the showroom. Know how much you want to put down and how much you are willing to pay for the car and negotiate the OTD price of the car.

Just my $.02

[artizhay]

On a side note, to the people saying you can't get a reasonable return on the cash you would otherwise put down, you ought to learn some forex...

[Zaggeron]

Originally Posted by RRnold

But going back to our discussion, paying 27K cash or financing 27K. Its not a bad idea to take advantage of the low interest rate instead of blowing it 27K on a car that will lose 2K the moment you drive off the lot.

I don't see the difference. Say that you somehow managed to get 0%. Good job! Ok, now calculate how much you pay for the car via financing vs. paying cash. .... (gears whirling .....) Hmmm, exactly the same. You have to pay exactly the same for the car whether it loses 1k the moment you drive off the lot or 5k.

I agree if you get a really low rate, your cash is probably better off somewhere where it can make you some money. Also, as mentioned, don't short yourself on cash. But if your interest rate is more than 2% unless you're investing the money in stocks or a higher risk bond products, you will pay more money for the car via interest the lower your downpayment.

[Splat]

Originally Posted by artizhay

On a side note, to the people saying you can't get a reasonable return on the cash you would otherwise put down, you ought to learn some forex...

This coming from the guy living with his mom?



If this is not true....

[Zaggeron]

Originally Posted by artizhay

On a side note, to the people saying you can't get a reasonable return on the cash you would otherwise put down, you ought to learn some forex...

Seriously, lol. The OP is wondering whether he should save some more money for a down payment. It's not like he's trying to decide whether he should invest his money in the Yen or pay a larger down payment.

[RRnold]

Originally Posted by Zaggeron

I don't see the difference. Say that you somehow managed to get 0%. Good job! Ok, now calculate how much you pay for the car via financing vs. paying cash. .... (gears whirling .....) Hmmm, exactly the same. You have to pay exactly the same for the car whether it loses 1k the moment you drive off the lot or 5k.

I agree if you get a really low rate, your cash is probably better off somewhere where it can make you some money. Also, as mentioned, don't short yourself on cash. But if your interest rate is more than 2% unless you're investing the money in stocks or a higher risk bond products, you will pay more money for the car via interest the lower your downpayment.

Oh for sure, over 2%, put as much as you can down, the more the better after equating the "afford". I'm not trying to argue with you, just trying to be realistic. It's safe to say that most folks don't have the ability to kick down 27K.

[artizhay]

Originally Posted by Splat

This coming from the guy living with his mom?



If this is not true....

Unfortunately, I co-own a company that generates nearly $100k in yearly revenue. Not a very large business, I know, but I am self-sufficient and live on my own, nonetheless. Very condescending and rude guess, though. Nice try.

Originally Posted by Zaggeron

Seriously, lol. The OP is wondering whether he should save some more money for a down payment. It's not like he's trying to decide whether he should invest his money in the Yen or pay a larger down payment.

Lol I'm not speaking to him, but based on responses, I assume some people here are investors and claim there is no possible way to generate more than a 2-3% return, so just enlightening them. In fact, I learned of forex through a forum about 2 years ago so you never know. I could change someone's life! Lol.