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72 months of car payments


Dirtyhip
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You don’t have to take out a loan for that long. Most cars today last more than six years, that’s why they are willing to offer that length of loan. A lot of people trade in their cars before they are paid off anyway. I always run mine until there is nothing left.

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11 minutes ago, Longjohn said:

You don’t have to take out a loan for that long. Most cars today last more than six years, that’s why they are willing to offer that length of loan. A lot of people trade in their cars before they are paid off anyway. I always run mine until there is nothing left.

It is just the first time I saw 72 months and it shocked me.

We pay cash for cars now.  I am financing the new car right now.  Self car payment, every month. We can afford a new one around 2029.  We keep em until they become problematic = 20 yrs.

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1 hour ago, Dirtyhip said:

We pay cash for cars now.  I am financing the new car right now.  Self car payment, every month. We can afford a new one around 2029.  We keep em until they become problematic = 20 yrs.

We have done that for almost 15 years.   I'd rather pay myself than pay the bank (or loan shark).

We tend to keep our cars for a LONG time.    WoBG still loves her 1997 Honda Prelude.   I can't justify replacing our 2010 Subaru Forester.  Neither car has navigation, bluetooth or connections to a cell phone, etc...    They do have CD players. The Prelude is old enough to still have a cassette tape player.   Our 'new' car is my 2016 Prius I purchased that for use on my job.  I retired and I still like the car. (I guess I fit the demographic for who buys a Prius)   It's super reliable and gets 55 mpg. 

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I have a 72 month car mortgage -- but it'already 68 months -- and in 2 years it'll be close to $0.  Ain't nothing wrong with taking out a longer loan providing you have repayment strategy.  Sometimes buying on a larger loan makes repayment easier initially when you know towards the back end you'll have plenty of capital to attack it.  In two+ years from now I will own a new Toyota RAV4 and I'll have it for another 12-15 years (in theory).  What's not to like?

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1 hour ago, Dottles said:

I have a 72 month car mortgage -- but it'already 68 months -- and in 2 years it'll be close to $0.  Ain't nothing wrong with taking out a longer loan providing you have repayment strategy.  Sometimes buying on a larger loan makes repayment easier initially when you know towards the back end you'll have plenty of capital to attack it.  In two+ years from now I will own a new Toyota RAV4 and I'll have it for another 12-15 years (in theory).  What's not to like?

Interest.  I don't like interest. At my age, I don't want to finance a car, or a home.  I feel like I am too old to take on a bunch of debt.  At this stage of the game, I want banks to pay me.  

Also, you paid for that rate in the cost of the car. They don't budget a whole lot, on a car loan through the dealer, cause they know they have you where they want ya.  My way, we just talk price of car, and I hand them a check.  

 

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1 hour ago, Dottles said:

I have a 72 month car mortgage -- but it'already 68 months -- and in 2 years it'll be close to $0.  Ain't nothing wrong with taking out a longer loan providing you have repayment strategy.  Sometimes buying on a larger loan makes repayment easier initially when you know towards the back end you'll have plenty of capital to attack it.  In two+ years from now I will own a new Toyota RAV4 and I'll have it for another 12-15 years (in theory).  What's not to like?

It’s the amount of interest over the life of the loan that concerns people.  But the reality is very few people can plunk down $40K cash on a car.   If you can kudos.

Its an option, if it works for you great. If not great.
 

 

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1 minute ago, ChrisL said:

It’s the amount of interest over the life of the loan that concerns people.  But the reality is very few people can plunk down $40K cash on a car.   If you can kudos.

Its an option, if it works for you great. If not great.

$40 grand is not bad if you prepared from the beginning of your last vehicle purchase.  It's less than $250 a month by my math.

40K/15 years/12 months.  We keep our cars for a very long while, like 15 years or more.  We just bought that Silverado, and started up the self payments again.

Maybe people drive much more and live a long ways from work.  I have never had that reality, so much. Even when I lived in the Bay Area, the commute was less than 5 miles. 

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My buddy dickered around on a new Subaru, the salesman kept talking payments and buddy kept putting him off and talking price.

Sitting down with the manager, she had a big smile on her face and asked so how many payments?

 The smile went away when my buddy replied. Just the one

They make more on the loan than they do the car.

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4 minutes ago, Dirtyhip said:

$40 grand is not bad if you prepared from the beginning of your last vehicle purchase.  It's less than $250 a month by my math.

40K/15 years/12 months.  We keep our cars for a very long while, like 15 years or more.  We just bought that Silverado, and started up the self payments again.

Maybe people drive much more and live a long ways from work.  I have never had that reality, so much. Even when I lived in the Bay Area, the commute was less than 5 miles. 

Yeah I was burning up cars every 3 years so that plan would have been tough. But most people are not at a point where they can do what you do.  I can’t plunk down that much cash on a car without putting a big dent in savings.  We normally pay down about 25% in trade & down, finance 36 months and pay off in about 18-24 months.

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11 minutes ago, ChrisL said:

Yeah I was burning up cars every 3 years so that plan would have been tough. But most people are not at a point where they can do what you do.  I can’t plunk down that much cash on a car without putting a big dent in savings.  We normally pay down about 25% in trade & down, finance 36 months and pay off in about 18-24 months.

3 years for a car? Hard to imagine driving that much.  

I might rob the car fund for my next commuter bike.  I am going to get another e bike for commuting to work.  My bike is my daily driver all year long.  I may have to sweet talk my hubby, cause I will not get rid of a bike for another in the fleet.  I have an illness.  HAHA

 

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1 minute ago, Dirtyhip said:

3 years for a car? Hard to imagine driving that much.  

I might rob the car fund for my next commuter bike.  I am going to get another e bike for commuting to work.  My bike is my daily driver all year long.  I may have to sweet talk my hubby, cause I will not get rid of a bike for another in the fleet.  I have an illness.  HAHA

 

I worked in an industry that required a lot of driving.  I had a car allowance & fuel cards but would put 30-40 K miles a year on my cars.  Not so much anymore.

 

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42 minutes ago, Dirtyhip said:

Interest.  I don't like interest. At my age, I don't want to finance a car, or a home.  I feel like I am too old to take on a bunch of debt.  At this stage of the game, I want banks to pay me.  

Also, you paid for that rate in the cost of the car. They don't budget a whole lot, on a car loan through the dealer, cause they know they have you where they want ya.  My way, we just talk price of car, and I hand them a check.  

 

 

42 minutes ago, ChrisL said:

It’s the amount of interest over the life of the loan that concerns people.  But the reality is very few people can plunk down $40K cash on a car.   If you can kudos.

Its an option, if it works for you great. If not great.
 

 

Yeah, I don't mind paying a bit of money if it gets me reliable transportation immediately and into the future.  Now if we wreck that car it's another story... but it's not going to break me to pay 2 years of interest to have something I needed.  If you recall, my Hyundai Sonata was about to explode - and it was 100% paid for.  So you do what you have to do.  If i borrow, I work hard to pay it down as fast as i can.  We often don't have the resources when we need them so you either go without and save or you buy up front and accept a cost to do that. For me, there was no real alternative. Without this gift, my family has no transportation.  

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5 hours ago, maddmaxx said:

In Malaysia you can finance a car for 10 years.  They are a very car centric country because the price of gasoline is very low.  Given the standard of living, many need to take that long to pay off the loan.

Incredible but I believe the car-centric mentality...sitting in a car or driving feels like less hard work to them.  Wonder about their health, though in 21st century.

It is a line of thinking of being "modern" and status symbol, the car..in Asia.  (Just like in North America though some people are bucking the trend.)

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But in a car, I can blast my music until you and I are both deaf, have sex in it, sleep in it, keep the rain or snow off me, and get the hell out of Dodge City immediately.  Of course, I'm deaf, fat, and living in a caccoon for most my life while I breath the exhausts of others ahead of me -- while burning up the planet man.  Hey, we all got our priorities.

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1 minute ago, Dottles said:

But in a car, I can blast my music until you and I are both deaf, have sex in it, sleep in it, keep the rain or snow off me, and get the hell out of Dodge City immediately.  Of course, I'm deaf, fat, and living in a caccoon for most my life while I breath the exhausts of others ahead of me -- and burn up the planet man.  Hey, we all got our priorities.

We attempted to go single car for a while. It got to a point where I just became my wife’s Uber so told her to buy a freaking car & be done with it.

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1 minute ago, ChrisL said:

We attempted to go single car for a while. It got to a point where I just became my wife’s Uber so told her to buy a freaking car & be done with it.

I'm excited to be driving again for many of those reasons -- but financially it's a breath of fresh air.  I love not having insurance on 2 different cars, less maintenance fees, not having two tanks to fill, not having to run the risk of having two cars that could possibly need repairs at any time.  But no doubt independence suffers.

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13 minutes ago, ChrisL said:

We attempted to go single car for a while. It got to a point where I just became my wife’s Uber so told her to buy a freaking car & be done with it.

When I first met dearie, he didn't have a car.  He still doesn't.  I never did have a car.

9 minutes ago, Dottles said:

I'm excited to be driving again for many of those reasons -- but financially it's a breath of fresh air.  I love not having insurance on 2 different cars, less maintenance fees, not having two tanks to fill, not having to run the risk of having two cars that could possibly need repairs at any time.  But no doubt independence suffers.

So your new place that's being built, can you occasionally bike to the store, etc?

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5 minutes ago, shootingstar said:

When I first met dearie, he didn't have a car.  He still doesn't.  I never did have a car.

So your new place that's being built, can you occasionally bike to the store, etc?

Definitely.  Apart from the typical rainy, wet, and sometimes cold winters of the PNW, the place we are moving is very conducive to outdoor riding (Basically I'm moving into the greater Frasier River valley).  Honestly, it's one of the reasons we want this place.  We love the location.  In fact, if it wasn't for these uncertain times, I would not even be second guessing this.  But then again, if it wasn't for these uncertain times, I probably wouldn't have the luxury of making this  change.  Life changes and we all take risks and some of us are better suited for that than others.  I see this as an opportunity.

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6 minutes ago, Bikeguy said:

I did that for many years.  I still kept the cars for years.  Once I got up to 250,000+ miles, then I'd buy a new one.  

My last few cars didn’t make it that long for various reasons.  Two died a horrible death in car accidents, one was a POS so I unloaded it. My Subie was purchased about a year before I left the industry with the intent of going 200K on it.  4 years later and being out of the industry for 3 i still haven’t hit 100K!

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The loan on the tractor 72 months but it is zero interest so it made sense to use their money.  If you get behind they smack the person with high interest but that is not our plan. Still just having it over our head makes me uneasy. Einstein says don’t worry he has it set to be paid off in 2. 

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55 minutes ago, ChrisL said:

one was a POS so I unloaded it.

I had an 85 Chevy Citation.  Talk about a POS....   I still drove that car to 351K.   I just kept fixing car.  Mostly by myself.   The top driver side door hinge broke off once at a customer site.  I managed to get the door closed.  My friend owned a body shop.  I stopped and asked him to fix it.  He told me it would take a while.  I told him you don't understand, just weld the f'n hinge to the car.  He told me that would work but it would burn some paint on the frame. etc..  $25 dollars and 15 minutes later the door worked just fine.

I sanded the car down once to get rid of the rust.  Spay painted the car primer gray.   I never needed to worry about the car being stolen.   I drove the car to its near death.

In 1999 WoBG and I decided to buy a new Land Rover Discover 2.    We were just about done with the deal, and the guy asks, 'anything other questions'?  I asked, how much trade in value for my 1985 Citation?  He asks me, where is it?  I tell him, 90 miles away in my driveway.  He was confused....  I tell him, just give me a price and later in the week I'll drive back to pickup the new car.  He tells me $100. I told him sold.

Best part..  I drove the car to another customer meeting.  (the dealer was about 10 more miles down the road)  My boss talked with me in the parking lot after the meeting.  He finally said...  is THAT your car?   I said yes, I need a raise.  (My car for my job was a 93 Dodge Intrepid, but he didn't need to know that.)  Drove home in the LR.   WoBG LOVED the LR.    11 years later... I decided to get rid of the LR.  

 

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I bought a $23k Hyundai Sonata on credit and paid it off in 2 years. With interest it probably cost me closer to $25k for a brand new car. I was expecting to get 10-15 years out of it but instead got 5. That's not too good. I did sell it for $6k so I got 5 years for about $19k or about $4k a year for transportation. Horrible. But if I can get 10-15 years out of a car for close to $2000 miles a year or less, then I don't care how I buy a car or for how long... that's a deal I will take every day.

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31 minutes ago, BuffJim said:

I took out a 72 month loan, but will refinance it soon with the credit union. I’ve eliminated my credit card debt and will attack the car loans next. BuffCarla is driving a 2016 SUV that will be paid off in 15 months. 

Yep.  I don't think all loans are bad.  They're not ideal but sometimes a necessary evil.  We all do what we have to do and we can't all be as frivolous as @Dirtyhip.  Many of us don't live in as arid climate as hers or work across a small town.

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58 minutes ago, Dottles said:

Yep.  I don't think all loans are bad.  They're not ideal but sometimes a necessary evil.  We all do what we have to do and we can't all be as frivolous as @Dirtyhip.  Many of us don't live in as arid climate as hers or work across a small town.

I have never been called frivolous.  That's a new one. 

I guess the truck could be seen as frivolous.  Too many bikes = frivolous?  Nah, cant have too many bikes.

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1 hour ago, Dottles said:

Yep.  I don't think all loans are bad.  They're not ideal but sometimes a necessary evil.  We all do what we have to do and we can't all be as frivolous as @Dirtyhip.  Many of us don't live in as arid climate as hers or work across a small town.

 

4 minutes ago, Dirtyhip said:

I have never been called frivolous.  That's a new one. 

I guess the truck could be seen as frivolous.  Too many bikes = frivolous?  Nah, cant have too many bikes.

Ha!  OMG.  I'm so sorry.  I meant frugal.  That's too funny.  I would definitely say you are not frivolous!

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I think part of the problem is that people are sometimes underwater on their car loan when their original car either breaks and needs expensive repairs or is destroyed in an accident.   People end up needing a new car and roll the deficit from the prior loan into the new loan.  They need to extend the term of the loan, which increases the chance this pattern will continue.

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3 hours ago, BuffJim said:

I took out a 72 month loan, but will refinance it soon with the credit union. I’ve eliminated my credit card debt and will attack the car loans next. BuffCarla is driving a 2016 SUV that will be paid off in 15 months. 

I could do that but I think I'm going to let it roll.

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23 hours ago, Dirtyhip said:

They finance for 6 years now?  

We are dipping into insanity.  Stay in debt forever?  

What is next?  The 40-50 year home loan.

Young people are so fucked.  

 

Actually, young people have an edge on a couple generations ago in terms of cars.

The first used car I had was a 1959 Chevy Impala, bought in 1967 while in high school for $300 I saved from my 5 pm-on fast food job.

With today's  "hundred-thousand-mile motors," as long as you change the oil and other fluids when called for, the car should last at least 15 years with avg. driving.

Consequently, instead of 3-4 years of payments in the 1960's and then another 3-5 years before you need a new car - meaning you're making payments 50% of the time you're driving, now if you're making payments for 6 years, you've got at least another 9 years to drive before you need a new car - meaning you're making payments 40% of the time.

Additionally, the interest rates now are extremely low compared to the past, so the total interest paid on six years of payments may be less than that on 3-4 years of payments in the past.

Of course, some people feel the need for a new car more frequently than others, so it may be tougher on them now.

I expect to trade-in my 2013 Honda Fit around 2028 - assuming all the self-parking, across-the-while line and behind-you object warnings are mostly standard then, when I'll be pushing 80 and probably buying my last car.

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23 hours ago, Dirtyhip said:

They finance for 6 years now?  

From what I understand, there is no reason to ever pay cash if you can finance for 0%. 

It used to be, with cash, you got the best deal.  That's no longer the case, as car companies and dealers are now tied up in all sorts of incentives and financing, such that mentioning "cash" can actually hurt rather than help get you a deal.

The seeming best and only way to buy a car now is to walk in, select the vehicle, and get them to give you their "final" out-the-door price. You can haggle that down, shop it to other dealers, whatever, but that is the NUMBER period.  When you move to the payment step, 0% on that number is what you get, and basically, that frees your $$$ up for growth the length of time you decide to pay it off.  If you have the cash to buy outright, you have no worry that you will ever pay interest.  Also even in savings, 30k or 40k makes more over six years at 1% than it would not being in your savings account.

Add in, for many folks, 6 years is a THIRD or less of their car's life as opposed to the FULL life of some cars from decades ago.  We're past 17yrs on both cars :)

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On 8/30/2020 at 8:22 AM, Longjohn said:

You don’t have to take out a loan for that long. Most cars today last more than six years, that’s why they are willing to offer that length of loan. A lot of people trade in their cars before they are paid off anyway. I always run mine until there is nothing left.

We still have our 2002 Wrangler (relocated to Minnesota, and in storage Oct thru April).  We had our 1986 Buick Century from 1986 to 2002.  We bought our 2003 Honda Accord in 2006, and still have it.  Yeah, we run ours for a while.

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1 hour ago, Razors Edge said:

From what I understand, there is no reason to ever pay cash if you can finance for 0%. 

It used to be, with cash, you got the best deal.  That's no longer the case, as car companies and dealers are now tied up in all sorts of incentives and financing, such that mentioning "cash" can actually hurt rather than help get you a deal.

The seeming best and only way to buy a car now is to walk in, select the vehicle, and get them to give you their "final" out-the-door price. You can haggle that down, shop it to other dealers, whatever, but that is the NUMBER period.  When you move to the payment step, 0% on that number is what you get, and basically, that frees your $$$ up for growth the length of time you decide to pay it off.  If you have the cash to buy outright, you have no worry that you will ever pay interest.  Also even in savings, 30k or 40k makes more over six years at 1% than it would not being in your savings account.

Add in, for many folks, 6 years is a THIRD or less of their car's life as opposed to the FULL life of some cars from decades ago.  We're past 17yrs on both cars :)

True.  We had to finance our 2019 Cherokee for 6 months to get the incentives. To be honest I dont recall if there was 0% financing. 

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If you were offered low interest, you could invest the money and make money while you pay off the car.

If you are doing a long term loan because you can't afford the card, that seems like a bad idea.

I bought a car recently and could have paid cash. Given the uncertainty of the times, I chose to take out a loan and keep my savings strong.

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23 minutes ago, dennis said:

If you were offered low interest, you could invest the money and make money while you pay off the car.

If you are doing a long term loan because you can't afford the card, that seems like a bad idea.

I bought a car recently and could have paid cash. Given the uncertainty of the times, I chose to take out a loan and keep my savings strong.

Cash is king.

 

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