Buying parts for your car while you still have a loan

[GotBRZ1691]

Originally Posted by blackhawkdown

i have big dreams with little ca$h to support it.

I feel you on this. Rent, student loans, car payment. 80% of my income. 10% food and gas. 5% activities with the GF. that leaves only 5% for me

If anyone knows what is required to file tax exempt in California please PM haha

[shiumai]

i own my BRZ. paid in full when i bought it, then proceeded to mod it. my wife and i don't like to carry any debt or pay interest.

[extrashaky]

Originally Posted by airjonny

Houses aren't depreciating assets

Sure they are. Homeowners just hide the depreciation in maintenance. Try not maintaining a home for twenty years and see if it has gained value. Then factor in inflation.

[qoncept]

I'm not sure what the point of this is, but people buy parts for a car they still owe money on for the same reason you do after you've paid it off. They want to make it faster or cooler or whatever. Instant gratification isn't uncommon, and, more importantly....

Because you have the money to pay your car off doesn't mean you should. Most people with loans on a twin probably have a pretty good interest rate, maybe even 0%. Very few have interest rates worse than you could get by investing the money. Car parts aren't stocks of course, and I'm sure next to no one here is buying mutual funds, but suggesting everyone should pay their car off as soon as possible is responsible but misguided advice.

[cjd]

Originally Posted by airjonny

Houses aren't depreciating assets

They can be. That said, upgrades often help.

I'm in the process of selling. I've invested about $25k over 12.5 years, half of that expected maintenance. I'll be lucky to walk with the sell price equal to what I paid.

Modifying is a decision to make based on financial viability - be responsible. If you aren't behind, have fall back funds for 3+ mo. living expenses, and are comfortable accepting responsibility for potential trouble as a result of the mods, go for it. Investing in quality of life and the pursuit of happiness isn't given enough credit.

C

[Jyn]

I'm surprised at the number of investors being implied here. Please teach me what y'all are investing in, as I've been looking at what to do for short-term (~5 years) gain.

[ashtray]

Money management is a personal thing. For some having $25k in savings at 0.5% interest and paying 3% interest on the car loan makes more sense, bc if you lose your job or have a sudden medical need/etc, that money in the bank is liquid. Getting a loan for your now used car wouldn't be.

As for mods - I'm on the fence there. I wouldn't dump $5-10k into mods on a car that still had a loan balance, but I could see if someone had an extra $1k laying around that putting it towards a $20k loan balance isn't as exciting as getting some coil overs.

Me personally - I started modding my WRX around month 10, and I didn't pay it off until month 36. I did hold off on the major mods until it was paid off. Unfortunately right afterwards I relocated to CA, and a bunch of those mods had to be reversed for smog - so I waited 3 years to really mod the car, and was rewarded for my patience with only getting to enjoy it a few months before going back to (mostly) stock. Had I really built the engine like I had wanted, I would have had to sell the car!

The guys I don't get are the ones who are leasing the car and do major mods. In most (but not all) leasing with the intent to buy afterwards is more costly in the long run - though spreading the purchase out over 8 years helps reduce payments a bit. And leasing with the intent to turn the car in at lease end means any mods that stay on the car are lost, and even potentially cost you in a penalty. (Ie those stock rims are probably $400/ea new? But if you get a set of $800 rims and sell off your stockers for $500 used, you might get dinged for $1,600 to replace the stock rims at lease end!)

So - it depends on the dollars and mods we're talking about. Also depends on what people are doing with their cash and their long term goals for the car. If you have a 5 year loan and only plan to keep it 5 years, then you would want to do your mods early so you can enjoy them for a few years, otherwise you'd never mod your car.

Speaking of mods, my car is still stock after 2+ years. Haven't even tinted the windows yet. I'm just lazy!

[Gunman]

Originally Posted by airjonny

Houses aren't depreciating assets

Depends when you bought it, and when you try to sell it. Plenty lost money on houses with the housing market crash. People learned that houses aren't the guaranteed "investment" that everyone thought.

[ModalSoul37]

Originally Posted by airjonny

Houses aren't depreciating assets

Sure they are, but not in the sense that cars are. Like others said, it depends on when and where you bought it...there are tons of people in the Bay Area, for example, who are underwater or upside down on their loans.

[Createddeleted]

[Tainen]

Originally Posted by GotBRZ1691

I feel you on this. Rent, student loans, car payment. 80% of my income. 10% food and gas. 5% activities with the GF. that leaves only 5% for me

If anyone knows what is required to file tax exempt in California please PM haha

Rent, student loans and car equal 80% of your total takehome?


Buying a car on credit was a really bad decision in your financial situation.

[extrashaky]

Originally Posted by Tainen

Buying a car on credit was a really bad decision in your financial situation.

Buying a car on credit was probably the only option. Throughout most of this country you still need reliable transportation to get to work. No car, no work. No work, no money to buy car. Catch-22.

However, it probably would have made more sense to buy a more affordable car. 5% of your income left over doesn't leave much room at all for saving for emergencies. He's one accident or layoff or unexpected child away from financial disaster.

[Tainen]

Originally Posted by extrashaky

Buying a car on credit was probably the only option. Throughout most of this country you still need reliable transportation to get to work. No car, no work. No work, no money to buy car. Catch-22.

However, it probably would have made more sense to buy a more affordable car. 5% of your income left over doesn't leave much room at all for saving for emergencies. He's one accident or layoff or unexpected child away from financial disaster.

With 5%, he's one oil change away from financial disaster. You can't really live like that without racking up pretty large amounts of unsecured debt.


And you can always, always buy a $5,000 corolla to get you by until you can pay down your student loans and get below a 30% debt to income ratio. Honestly, anything above 40% debt to income is really, really dumb. For like, a thousand reasons.

[extrashaky]

Originally Posted by Tainen

And you can always, always buy a $5,000 corolla to get you by until you can pay down your student loans and get below a 30% debt to income ratio.

Not if you don't have $5000.