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Average auto loan now over $30k

I have always bought used, and probably always will. Just don't think I could afford anything new except for a bottom of the line domestic vehicle at this point in time, and they are built so poorly that they would be ready for the junkyard before a 60 month loan was paid off. The best market for a car is the 8-10 year old up scaled vehicles. These are generally better made, more comfortable to drive and better taken care of than budget bargain vehicles. Of course, I am willing to live without the latest technology and a few bumps and bruises. After all, in the end it is just a way to get from one place to another as safely as possible. Really like not having to make payments.
 
What many people on CF would like you to think of them:

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Reality:

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CyCloned said:
I have always bought used, and probably always will. Just don't think I could afford anything new except for a bottom of the line domestic vehicle at this point in time, and they are built so poorly that they would be ready for the junkyard before a 60 month loan was paid off. The best market for a car is the 8-10 year old up scaled vehicles. These are generally better made, more comfortable to drive and better taken care of than budget bargain vehicles. Of course, I am willing to live without the latest technology and a few bumps and bruises. After all, in the end it is just a way to get from one place to another as safely as possible. Really like not having to make payments.
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Bumps and bruises?
If they're more comfortable cars, why are they hurting you?
 
capitalcityguy said:
I wonder if any of these people taking out $30K car loans have the gall to turn their noses up at individuals who take out pay day loans?

Are either a great financial decision? Not generally however I would tend to bet that at least the pay day loaners are desperate and really lack choices and are just trying to get out of some difficult situation.

The $30K car loan guy is making a poor financial decision when they don't have to...no desperation, just lack of willpower (knowledge?) to make better choices.

Just speaking in general terms. We all know there are exceptions.
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Oh boy, I've seen it all now. Comparing a payday loan with a 400% interest rate to a 0-3% car loan, are you kidding?

Seriously, you'd think from some people that money earned should never be spent and should always be saved. Like I said earlier, enjoy life. And if a new car or truck makes you happy AND you can afford it, why the hell not buy it?
 
CycloneErik said:
I agree with the general idea, but I think you're putting the payment $2-300 too low.

I don't have a general issue with borrowing for a car if need be, but I couldn't stomach doing $30k.
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I agree with your logic, but I'll admit to having just taken a $35k car loan. But it was 0% for 5 years.

DEALER: Do you want to put any money down?
ME: Heck no!
 
Pat said:
I agree with your logic, but I'll admit to having just taken a $35k car loan. But it was 0% for 5 years.

DEALER: Do you want to put any money down?
ME: Heck no!
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So are you saying 0% financing is justification for borrowing more money on a car than your normal logic would tell you?
 
farminclone said:
So are you saying 0% financing is justification for borrowing more money on a car than your normal logic would tell you?
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Why wouldn't it factor into the equation. Same as when they offer $X off the vehicle if you finance through them. If you were going to buy it with cash finance it for a month and save the $X.
 
I apparently look at this completely opposite of everyone else.

I never think "I'm getting a loan because it's 0%". I think, I"'m paying cash for the car so that I don't have a monthly payment and can put that money that was going to a monthly payment into company stock and get a minimum of 15% return".
 
dmclone said:
I apparently look at this completely opposite of everyone else.

I never think "I'm getting a loan because it's 0%". I think, I"'m paying cash for the car so that I don't have a monthly payment and can put that money that was going to a monthly payment into company stock and get a minimum of 15% return".
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You use the cash to buy the car rather than buying the stock that's guaranteed to make 15% return?
 
cycloneworld said:
Oh boy, I've seen it all now. Comparing a payday loan with a 400% interest rate to a 0-3% car loan, are you kidding?

Seriously, you'd think from some people that money earned should never be spent and should always be saved. Like I said earlier, enjoy life. And if a new car or truck makes you happy AND you can afford it, why the hell not buy it?
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I'm sorry, you're unable to grasp the analogy the way it was meant. Not going to waste keystrokes trying to explain as I doubt you're open to trying to understand it anyway. BTW what is the point of annualizing a pay day loan when most are paid off in days, not 12 months?

Only in 'merica is "buying" equivalent to financing.

The thread is about financing, not purchasing outright, so yeah, spend your money on whatever. Who cares as long as you have the cash on hand and thus can afford it.

Only in a culture drowning debt, short on savings, and sold on the hyper-consumerism mentality, could the ones on threads like this advocating for saving for, rather than financing, be the target of mockery. Very telling.
 
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wxman1 said:
Why wouldn't it factor into the equation. Same as when they offer $X off the vehicle if you finance through them. If you were going to buy it with cash finance it for a month and save the $X.
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JP4CY said:
I think he's saying he can afford it but why put money down if there is no finance charge?
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I am guessing that most would spend less on cars if they had to write a check out for the entire purchase, rather than financing over 5 years. Most would look at the $35,000 in their bank account, say they worked too hard for that money to let it all go on a car, and look for a car in the $20,000 range - just my hunch, not scientific.

$583/month on a car - glad it is him and not me!
 
dmclone said:
I apparently look at this completely opposite of everyone else.

I never think "I'm getting a loan because it's 0%". I think, I"'m paying cash for the car so that I don't have a monthly payment and can put that money that was going to a monthly payment into company stock and get a minimum of 15% return".
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Uh....what? Why not just put the cash into the stock instead of dumping it into the car?

And a company stock is not going to get you a "minimum 15% return". You're simply getting a discount on the purchase price. Unless they allow you to sell it the day after you buy it, you're not guaranteed any return.
 
farminclone said:
I am guessing that most would spend less on cars if they had to write a check out for the entire purchase, rather than financing over 5 years. Most would look at the $35,000 in their bank account, say they worked too hard for that money to let it all go on a car, and look for a car in the $20,000 range - just my hunch, not scientific.

$583/month on a car - glad it is him and not me!
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THIS.

I just went through this a about a year or so ago. Was looking to replace my small pickup. Had low $20K saved up but couldn’t find any decent used trucks with low mileage so started looking at new trucks. I got pretty fired up and caught up in looking at new trucks and pretty soon I was testing driving and considering truck pushing into the $30Ks (I was looking to buy small pickup, not full-sized…even though I started driving a few of those too). Would have been a piece of cake for me to “affordâ€￾ the more expensive truck than I planned by paying cash and just financing the difference. Emotionally, I was close to being there.

In the end, I held to not financing and writing that painful check (yes….it is painful…which is part of the point). I still got a new pickup (manual trans, manual windows/locks) but spent far less than what I would have had I financed. Yes, I probably could have gotten 0% loan and paid off within the required terms, but it wouldn’t change the fact I would be $10 - $15K poorer I am today.
 
farminclone said:
I am guessing that most would spend less on cars if they had to write a check out for the entire purchase, rather than financing over 5 years. Most would look at the $35,000 in their bank account, say they worked too hard for that money to let it all go on a car, and look for a car in the $20,000 range - just my hunch, not scientific.

$583/month on a car - glad it is him and not me!
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I don't disagree with you and I think the same thing could be said for taxes. If everyone had to pay out of pocket or pay quarterly estimates I would imagine a lot more people would take a greater interest in our government.

That being said...you both can be right. Everyone is different and can be successful without having the same path.
 
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