Posted on 02/15/2020 3:51:48 AM PST by karpov
We buy 1 or 2 year low mileage luxury vehicles and pay cash for them. I don’t tell the dealer that it’s a cash sale until the bargaining is all done and we sit down to write everything up. They are always shocked. We get some really great deals by buying this way.
Give me a little notice before doing this so I can get in on the game and take out some big loans. KTHXBYE
The problem with autos as collateral is that most of them are worth considerably less than the loan right after they leave the lot.
I’ll grant you that is the fault of the lender. The lender should not loan more money than the car’s value.
These long term loans for cars now mean that the car is depreciating considerably faster than the loan is being paid off.
I understand that, and it IS the fault of the lender. Simply requiring more money down - or accept the fact that you are selling a product that is beyond the means of most people.
It seems people will forego a lot of other things just to have the latest cars - including children and homes of their own.
It may ruin your credit rating but it won’t stop you from getting a car loan now. In order to keep the auto bubble inflated they are continually lowering the credit standard and extending the length of the loan.
I had a neighbor who had multiple leased cars repossessed and would go right back in and lease another one. Absolute insanity on the part of the sellers.
“Best advice anyone ever game me: Avoid debt.”
I hate debt more than anything else.
Two years ago one of my sons “borrowed” my car and totaled it.
Since I was paying off some medical bills my savings had been drawn down to $300.
With no good used inexpensive cars to be had I called my other son’s best friend who is the finance officer for a dealership. He found me a nice Ford Escape he could let me have for $3000 under book value.
When he went to do the financing he ran into a problem. My credit score came back a big fat ZERO.
Not because of bad payment history but because of NO debt history.
It had been about twenty years since I had been in debt and they only report the last ten years.
Now I have a car payment I hate but have to live with for another year. Yeah, I’m paying it off early.
just as long as I can stock up on stuff on credit before the forgiveness begins.
Great advice. We’ve lived it. The only debt we’ve ever had is the house and occasionally a modest car loan.
Always buy used and run em till they die
I’ve never sold a car for more that $1000.
Our kids are following our lead. Three of them have bought new cars in the last year or two. All paid cash. No rich, just wise and frugal.
Enter leasing. Your monthly payment became a function of three things. Price of the car, value of the car at lease end, and interest rates, and the car companies had control of two of those three. It doesn't matter if that new BMW 320 seems overpriced at $50k. If BMW says it will be worth $38k three years from now and interest rates are 1% you can get a lease for $400/month with just a few thousand down. And in three years you can do it again and everyone is happy. Except...
Except the BMW wasn't worth $50k new, and it sure won't be worth $38k three years later. This is the first time the market has to face reality. Even though BMW calculated your payments based on those numbers the car is now worth $16k and they have a lot of them to get rid of.
When leasing first got rolling this worked to their advantage. All the nice 2-3 year old cars came back to the dealers through the leasing system and they had a near monopoly on this market. The higher they could keep prices on good low mileage used cars the more money they made. Fast forward to today. There's just too many lease returns to sell. There's an entirely new business out there just selling lease returns. Think Carvana. In order to keep the ball rolling the car companies had to eat the difference between the $38k residual and the $16k real value. Now if they can figure out how to take that $22k paper loss and still make money imagine how much they make if you actually paid the $50k upfront.
We've all seen those articles comparing how much value a new car looses in 2-3 years. Is a three year old car with 25k miles on it really only worth half of a new one? Not really, it's just the new one is so overpriced.
If you have to have a new car every 2-3 years, lease. But seriously, cars have much longer lives now, just buy used.
If a car loan goes bad, it typically isn’t the dealership on the hook—it is the borrower or lender.
The market is hungry. New investors are sucked into new deals. Old investors come back to bet again. The losses on these investments are then tax deductible which eases the pain and brings them back to the table.
NEVER invested in a limited liablity company.
Ms. Parks, 63, says employees told her that she couldn’t trade in the Soul, but that she could buy another car.
“Broadly, vehicles are getting more expensive and Americans are struggling to afford them.”
We do not make an austere, cheap car. In the 70s, A/C was still an option and in some cases so was the radio.
Personally I think all loans should be forgiven. All of them.
Then everyone would have a fair start.
Why stop at student loans?
The year of Jubilee, God would agree with you.................
Seriously, if you think about it, there is much merit to the idea.
I used a mortgage to buy my first house and traded up once. Avoid debt to the extent you can. A car is a form of capital plant, you get value every time you use it. I grew up in Queens, and public transit was readily available, but driving would save me two hours a day, so borrowing to buy a minimally functional car (a Dave Ramsey special) would make sense. Fortunately, I always managed to find a shitbucket I could afford to pay cash for.
The appeal of a new car is obvious. I drive a 2014 Corolla, my wife a 2012 Rav4. I checked my bank account this morning. The balance is over $76,000. (Bank account, checking and savings, not 401k.) A couple of Lexus would kill that, but no, thank you. I have been very lucky, but I have also been frugal.
Yeah, because there are no written documents. Quietly provided, verbal advice to take an action is easily hidden. And hey - I was just joking anyway. Who knew the customer would take the advice.
And yes - always buy a good, reliable used car with good reliability ratings (i.e. no Ford, GM, Fiat Chrysler).
But...... don’t you feel safer with yellow LED’s on your rear view mirrors? Don’t you feel safer with a back up camera on your computer screen even if the time and temperature disappears for a moment?
Having no credit history means you will pay a ton extra for car and home Ins, and you likely be passed over for promotions and you not be hired to start with.
Paying for everything in cash means you are good at managing money...to those that know you well.
To those that don’t know you well...it means you are untrustworthy.
It shouldn’t be that way, but it is.
My 85 year old mom bought a new car last year. Her 1993 Ford Taurus was costing her more every year than car payments would have been.
Her house is paid for and she only has normal everyday expenses like food, electric, etc.
She laughingly says her car payments will outlive her.
I learned from her how to be frugal.
If it ain’t broke don’t fix it.
Do I NEED it or just want it?
If I need it is there a cheaper alternative?
Okay, I have to buy it, get the best quality for the dollar.
I’ve bought it now TAKE CARE OF IT.
The Jeep products with the proximity unlock can be blocked, allowing operation with only a direct-command from the fob. The proximity system typically requires arm’s length distance for sufficient signal strength to function. On the other hand, the fob signal direct-command operates from a tenth of a mile or further.
Often a two man team work together to gain access to the mark’s vehicle using an amplified datalink with a range of possibly a half-mile. One has a vehicle located transceiver device which relays a query from the targeted vehicle, which is intended to gain a response from the authorized key fob for the matching vehicle.
The partner maintains a close distance to the vehicle owner with the other duplex transceiver, such that the query from the vehicle evokes a counter response from the key fob. The key fob signal is transmitted over the two way data link to the vehicle, granting access to unlock the vehicle and disarm the security system.
Once inside, the same approach is used to relay the proper key fob response-to-challenge required to initiate engine startup. Once started, the key fob signal is not required to drive the vehicle away to a chop shop or other destination.
Such people shouldn’t be able to qualify for a new loan.
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