waiting for the FRS? not anymore!

[Porsche]

Originally Posted by campy

It gives you 3 months to flee to mexico in your new frs

Yes.

But, then isn't it the consensus of the members here that whenever we're speeding … it's done in Mexico? We're frequently down there anyway, right?

[njccmd2002]

188 thats chump change. thats cheaper than a short shifter. in those 3 months, you can triplicate 188 if you invest in the stock market. then possibly buy the lottery win the millions, and after taxes, the car is free courtesy of the gub-mint.

[frs10]

Originally Posted by njccmd2002

188 thats chump change. thats cheaper than a short shifter. in those 3 months, you can triplicate 188 if you invest in the stock market. then possibly buy the lottery win the millions, and after taxes, the car is free courtesy of the gub-mint.

thats what i thought when i posted this...

[Phantobe]

The stealership is at it again, I got excited when I read the thread title.

Broken Dreams

[thill]

Originally Posted by Porsche

So, what does this really mean?

First let's note the wording:

"No Payments for 90 Days on New Scions"


Well, your first payment on a new car loan purchase would not be for thirty days; by extending that first payment out to 90 days, we have only ADDED 60 days, or two months. This is not the three months "extra" one might mistakenly think, initially.

You will be charged interest on those two months; that extra time before your first payment is due is not free.

What does this cost you, exactly?

Let's take a look…

Assume one buys the car on September 1, 2013.

Assume a loan of $25,000 @ 4% interest for 6 years.

Ordinarily, the first payment would be due on October 1, 2013.

But, the first payment is deferred until December 1, 2013 (90 days from purchase date).

Represent the 4% interest as a decimal. 4/100=0.04. That is the ANNUAL interest rate. We want to compute how much interest will cost us per MONTH. So, divide 0.04/12=0.00333333… That's now our MONTHLY interest rate. (You knew that there are 12 months in a year, right?)

We begin with a loan balance of exactly $25,000. So, we multiply the monthly interest rate by the principal, the outstanding balance of our loan this month and we get:

$25,000 x 0.00333333 = $83.33

So, $83.33 is the cost of borrowing $25,000 for one month. Two months, then, equals 83.33 x 2 = $166.66, or let's just round this off to $167.

It will cost us $167 extra to postpone our first payment until December 1.

On December 1, our new loan will be $25,000 + $167 = $25,167 @ 4% for 6 years.

Paying 4% interest for 6 years (72 months) on $167 will cost us an extra $2.61 per month, or $188 extra over the full loan period.

So, if we pay off this loan in 6 years, what does it cost us to accept this "deal?"

$188

Each of you must decide whether this is worth the cost to you.

I hope this has been helpful.

The deal is only good on 60 months financing deals. 72-84 months is not eligible. I think the problem I have with this, is that these types of deals typically bring out the folks with little to no credit and who are living paycheck to paycheck. Assuming most of these folks are not going to invest the money wisely, they will most likely blow their 3 months of no carpayment on more stuff for the car, toys, strippers, alcohol, etc.

[Porsche]

Originally Posted by thill

The deal is only good on 60 months financing deals. 72-84 months is not eligible.

Okay.

We still will have an additional $167 rolled into our car loan at the beginning, since how long we take to pay it off doesn't affect the initial interest added to the loan balance in the first two months of deferred payment.

So, paying 4% interest for 5 years (60 months) on $167 will cost us an extra $3.08 per month, or $184.53 extra over the full loan period. The shorter loan period (number of months) results in a higher monthly payment, but a lower overall interest cost to the consumer.

I agree with your other comments and concerns. It is appalling that 84-month car loans are even possible. Financial illiteracy (and math phobia) helps make all of this possible.

I try to help where I can.

I try to show that the math is basic and understandable. There's no mystery. I try to provide clarity where possible, which I hope will assist forum members in their decision-making.

[TRD-X]

Or you could just pay cash for your ride and get for a lower price....

[thill]

Originally Posted by Porsche

Okay.

We still will have an additional $167 rolled into our car loan at the beginning, since how long we take to pay it off doesn't affect the initial interest added to the loan balance in the first two months of deferred payment.

So, paying 4% interest for 5 years (60 months) on $167 will cost us an extra $3.08 per month, or $184.53 extra over the full loan period. The shorter loan period (number of months) results in a higher monthly payment, but a lower overall interest cost to the consumer.

I agree with your other comments and concerns. It is appalling that 84-month car loans are even possible. Financial illiteracy (and math phobia) helps make all of this possible.

I try to help where I can.

I try to show that the math is basic and understandable. There's no mystery. I try to provide clarity where possible, which I hope will assist forum members in their decision-making.

I agree with you and appreciate your insight. I was not trying to come across as a smartass.

And I am with you. 84 month car loans should probably be illegal. I did not even want a 60 month car loan when I bought my car, but with interest rates at 2% or less it made sense. That said, if I stick with my current payments the car will be paid off in about 24-28 months. I just don't like car payments..

[Porsche]

Originally Posted by thill

I agree with you and appreciate your insight. I was not trying to come across as a smartass.

Heavens, no. It never occurred to me that you were doing anything more than politely pointing out the Toyota Financial Services terms.

And I thank you for that, my friend.

And I am with you. 84 month car loans should probably be illegal.

Heh. "Illegal" was in fact the very word I wanted to use, but decided maybe I shouldn't. A lot of people seem to be uncomfortable with what I write; I think they suspect me of feeling/being "superior," so I try to keep things toned down a bit, lest I sound too imperious. It's a problem sometimes.

I did not even want a 60 month car loan when I bought my car, but with interest rates at 2% or less it made sense.

Sure. It's nearly "free money."

That said, if I stick with my current payments the car will be paid off in about 24-28 months. I just don't like car payments.

And THAT'S the trick. Good man. If only the youngsters could manage such self-discipline. I'm thinking you're an older fellow, right?

[thill]

Originally Posted by Porsche

Heavens, no. It never occurred to me that you were doing anything more than politely pointing out the Toyota Financial Services terms.

And I thank you for that, my friend.

Heh. "Illegal" was in fact the very word I wanted to use, but decided maybe I shouldn't. A lot of people seem to be uncomfortable with what I write; I think they suspect me of feeling/being "superior," so I try to keep things toned down a bit, lest I sound too imperious. It's a problem sometimes.


Sure. It's nearly "free money."

And THAT'S the trick. Good man. If only the youngsters could manage such self-discipline. I'm thinking you're an older fellow, right?

42 I went 10 years without car payments, and like the feeling. And your right at 2% interest rate it did feel like free money (which was how I justified the 60 month finance deal), especially with investments doing so well right now this year. But, I just hate the feeling of making that payment every month and not owning the car outright. I think I have read too many books by Dave Ramsey.

My wife and I went shopping last weekend and, I kid you not, we had five different stores in a two hour period trying to push their store credit cards on us (to take advantage of deals and "save money). I feel like it is 2005 all over again....

[tacoss23]

I find it hilarious and scary at the same time, the lack of knowledge people have regarding basic finances and purchasing decisions in America. Even those considered to be "responsible".

Here is a basic rule for purchasing anything that you consider "major purchase" (vehicles, houses, boats, etc)

If you need a deal, or promotion, or haggling the price as a deciding factor wether you are going to make that purchase or not....... then you CAN'T afford it.

-"but hey I can make the payments...." yes, but if those payments are significant enough for you to worry about, or if a $2000 "deal" of a $27k car was a significant amount for you, then no, you shouldn't be buying the car. You should be buying a $10k used vehicle or less.

Credit is not meant to be used for you to be able to afford something that you otherwise wouldn't. Meaning, splitting $25k+interest in 60 payments.

Credit is meant to be used for you to be able to ENJOY EARLIER things that you can most definitely afford.

[Porsche]

Originally Posted by thill

42

I'm in my sixties, hoping to make it to 70, and with a bit o' luck even longer.

I think I have read too many books by Dave Ramsey.

Hey, Dave Ramsey. You and @suaveflooder are DR fans. Good for you guys. I like Dave Ramsey and Clark Howard, too.

My wife and I went shopping last weekend and, I kid you not, we had five different stores in a two hour period trying to push their store credit cards on us (to take advantage of deals and "save money). I feel like it is 2005 all over again....

Oh, God…

You are so right. What is to become of this country? We may laugh, but these are not good signs.

Sometimes I'm glad I'm old, especially when I think about what lies in store for our nations' youth. A local talk-show host says of our young people, "You're doomed." And this is what he's talking about. (He fills in for Rush Limbaugh, occasionally.)


Naturally, the young aren't "buying" this for a moment; they're filled with the unbridled optimism of youth.


Anything's possible, they think; they pay a fortune for a useless college degree, incurring crushing debt. How do we get them to see that you CANNOT DO THAT in America anymore? They need practical degrees. When I'm not overcome by the urge to strangle them … I want to give them a reassuring hug.

[Phantobe]

Originally Posted by tacoss23

I find it hilarious and scary at the same time, the lack of knowledge people have regarding basic finances and purchasing decisions in America. Even those considered to be "responsible".

Here is a basic rule for purchasing anything that you consider "major purchase" (vehicles, houses, boats, etc)

If you need a deal, or promotion, or haggling the price as a deciding factor wether you are going to make that purchase or not....... then you CAN'T afford it.

-"but hey I can make the payments...." yes, but if those payments are significant enough for you to worry about, or if a $2000 "deal" of a $27k car was a significant amount for you, then no, you shouldn't be buying the car. You should be buying a $10k used vehicle or less.

Credit is not meant to be used for you to be able to afford something that you otherwise wouldn't. Meaning, splitting $25k+interest in 60 payments.

Credit is meant to be used for you to be able to ENJOY EARLIER things that you can most definitely afford.

Eh that's not always the case. I'm waiting to see if I can get a deal on a 13, incentive being saving money. Knowingly that there are minor changes to the 14s. It's kinda common sense why everyone is trying to get a deal, because it's the best time possible.

If I can't get a discount on msrp I'll just wait for 14s.

Sent from my SCH-I545 using Tapatalk 4

[tacoss23]

Originally Posted by Phantobe

Eh that's not always the case. I'm waiting to see if I can get a deal on a 13, incentive being saving money. Knowingly that there are minor changes to the 14s. It's kinda common sense why everyone is trying to get a deal, because it's the best time possible.

If I can't get a discount on msrp I'll just wait for 14s.

Sent from my SCH-I545 using Tapatalk 4

Oh ok, no no, that's different. What you are saying is you just want the good "deal". It's not necessarily a deciding factor wether to buy the car. (you are simply deciding WHICH car to buy, 13 or 14). Therefore it's a deciding factor in WHICH car to buy, That's great!

I meant the people that basically are in the dilemma of : "I could afford the payments for next 6 years, if they vehicle is $2k less".