Would you take out an 8 year car loan for a car you cannot afford?

[Mr. Met]

I personally don't care if people stretch themselves to get a car of their dreams, but I do have an issue when they try to make it sound like it was a good financial decision. Those are the same type of people who'll call others "The Poors" whenever there's a discussion about value of certain trim levels. An how can we forget the old threads about people trying to justify ADM for GT350s because those were going to be collectors cars and their value will just go up? Same type of discussions popped up when GT500 was announced. Nothing wrong with someone paying ADM for a car if they can't wait, but don't try to rationalize it as a some sort of investment.

I would agree with that. I should have also added I dont think anyone is saying people should be buying cars they cant even afford to make the payments on. My point was this seems to me to be on odd place to assert that long term financial planning should be your first thought when buying a car as practical as a Mustang. Everyone is in a different situation and has different priority's. I have a family member who thinks I'm nuts for spending $2k on a exhaust system but has no issue with spending thousands of dollars on a vacation. Why is one inherently more reasonable then the other?

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[3star2nr]

I actually seen discussions on Facebook where people were justifying financing their car mods via Affirm because other get mortgages to buy houses. I guess some people can justify anything if they can rationalize it hard enough.

I looked at them for some studio equipment they were doing 14% APR which is insane lol

I prefer just save. That said some companies like amazon are doing 0% for 6 months on big ticket items. Thats actually a great deal.

 

[Hack]

Yeah. For the next 4 months, the mustang payment will be ~4.5% of gross. After that...0%! The max it's been throughout ownership is 6%.

The same philosophy should go with housing. The guidelines are 20-30% of gross income...that just seemed too much. Ours is ~20% of net, not gross. It makes a big difference.

It seems like the housing max payment guidelines are about double what they should be. Maybe those guidelines are ok if you are buying your first house and your income will increase rapidly. If you are middle aged and spending 20-30% of your gross on house payments I would think it would be very difficult to buy any car.

Tax refunds. Affirm financing.

Also with students alot of them use their student loans to pay for mods. I knew guys in college that did that.

Or they live with their parents so any money they make they spend in mods. Plus these cars arent terribly expensive and there is a massive used parts community.

You can build a 800whp GT for around 6k

The GT costs $30K +, cheap mods cost $6k at least, and the mods also cost you your warranty. So those mods are risking a lot more money than just the $6k. How much is a used Mustang with a blown engine worth?

 

[BmacIL]

It seems like the housing max payment guidelines are about double what they should be. Maybe those guidelines are ok if you are buying your first house and your income will increase rapidly. If you are middle aged and spending 20-30% of your gross on house payments I would think it would be very difficult to buy any car.

Agreed. We couldn't rationalize a payment that high. Thus our 20% of net instead of gross.

 

[kluke15]

personally i wouldnt. heard too many horror stories when people wreck before the car is paid off then you are upside down on a loan for a car you cant drive. i bought my car prob prematurely and it has put enough strain on my life that if i could do it again i would have waited.

 

[jvandy50]

personally i wouldnt. heard too many horror stories when people wreck before the car is paid off then you are upside down on a loan for a car you cant drive. i bought my car prob prematurely and it has put enough strain on my life that if i could do it again i would have waited.

GAP insurance should cover you if you ever plan to not be ahead in the loan.

 

[Cobra Jet]

personally i wouldnt. heard too many horror stories when people wreck before the car is paid off then you are upside down on a loan for a car you cant drive. i bought my car prob prematurely and it has put enough strain on my life that if i could do it again i would have waited.

GAP insurance should cover you if you ever plan to not be ahead in the loan.

Just a little FYI addendum to those getting fat 8 year auto loans..... (LOL)

GAP won’t cover the thousands people have spent on mods - nor will most Auto Ins. Companies reimburse for those mods... so that’s all money pissed away IF a vehicle with an outstanding note is totaled out (wrecked OR stolen).

In order to even think about mod reimbursement, the insured should inquire with their current Ins Co and ask if there is a rider or supplement to add to their existing policy where the mods could be listed and covered. Grant it, that request won’t be “free” and in most instances of a claim, receipts and documents would still be a requirement for fair reimbursement.

The other thing would be to have an Auto Policy that is an Agreed Value policy. This means that the Insured and Ins Co agrees to insure the vehicle for $X value. That value is stipulated and printed within the Policy declaration pages and in the event of a total loss, the Insured gets paid only that figure - no more and no less. Again, to have such a policy may cost more than a standard policy - BUT it essentially protects against being offered “Blue or Black” book values for a vehicle that could be worth a shit ton more.


For instance, my 94 Cobra is on a Collector Car policy and it’s also an Agreed Value policy. It’s insured for $X amount which is clearly documented within the policy declaration pages. This specific policy also appreciates annually, so the Agreed Value of the car appreciates 8% annually (2% per quarter). If anything were to happen to that car resulting in a total loss, the payment would be the Agreed Value as documented in the policy (+ the applicable appreciated % at the time of loss) and nothing less.

Now of course many modern cars cannot be insured on a “Collector” policy, as there are many provisions and requirements that have to be met and adhered to as well. However for those who put money into their rides like it’s a rolling piggy bank, you should consider finding an Agreed Value policy....

GAP will never cover “mods” and some fine print relating to GAP must be read, as not all GAP insurance is equal when it comes to covering any delta between what is owed to a lender after a total loss claim.

 

[cib24]

Agreed with the above, and the next question is along the lines of how many people are on finance and have non-Ford-approved mods on the car?

The next question that should really be asked is how many people bought their car on finance (whether a lease or term loan), and have modifications on the car? Logic says that the money spent on those modifications should be spent on reducing your balance owed on the car that is still technically the "bank's" car .

Yet, I'm sure there are quite a few people on here that have $5,000, $10,000, $20,000, $30,000 invested in their Mustang's yet are still paying off the car loan. I am sure this scenario also applies to any other car out there that you can modify as well.

 

[1MEAN18]

reading back thru all the responses, this has been an interesting thread.

 

[jvandy50]

Just a little FYI addendum to those getting fat 8 year auto loans..... (LOL)

GAP won’t cover the thousands people have spent on mods - nor will most Auto Ins. Companies reimburse for those mods... so that’s all money pissed away IF a vehicle with an outstanding note is totaled out (wrecked OR stolen).

In order to even think about mod reimbursement, the insured should inquire with their current Ins Co and ask if there is a rider or supplement to add to their existing policy where the mods could be listed and covered. Grant it, that request won’t be “free” and in most instances of a claim, receipts and documents would still be a requirement for fair reimbursement.

The other thing would be to have an Auto Policy that is an Agreed Value policy. This means that the Insured and Ins Co agrees to insure the vehicle for $X value. That value is stipulated and printed within the Policy declaration pages and in the event of a total loss, the Insured gets paid only that figure - no more and no less. Again, to have such a policy may cost more than a standard policy - BUT it essentially protects against being offered “Blue or Black” book values for a vehicle that could be worth a shit ton more.


For instance, my 94 Cobra is on a Collector Car policy and it’s also an Agreed Value policy. It’s insured for $X amount which is clearly documented within the policy declaration pages. This specific policy also appreciates annually, so the Agreed Value of the car appreciates 8% annually (2% per quarter). If anything were to happen to that car resulting in a total loss, the payment would be the Agreed Value as documented in the policy (+ the applicable appreciated % at the time of loss) and nothing less.

Now of course many modern cars cannot be insured on a “Collector” policy, as there are many provisions and requirements that have to be met and adhered to as well. However for those who put money into their rides like it’s a rolling piggy bank, you should consider finding an Agreed Value policy....

GAP will never cover “mods” and some fine print relating to GAP must be read, as not all GAP insurance is equal when it comes to covering any delta between what is owed to a lender after a total loss claim.

neither of us mentioned mods, but paying minimum payments on something for 8 years will land you upside down and GAP should cover that.

interesting data point though, state farm did reimburse me $3200 extra for 8k in receipts for mods on a 16GTPP that was in a crash.

 

[Mr. Met]

I have never had an insurance company that wouldn't cover mods for a few extra dollars a month.

Agreed with the above, and the next question is along the lines of how many people are on finance and have non-Ford-approved mods on the car?

What is a "Ford approved mod"?

 

[Bull Run]

Speaking of car loans, saw this article today about how Ford Credit's profitable and it now contributes about half of the company's profit.

https://www.msn.com/en-us/money/com...-generating-more-profits-than-ever/ar-BBZBwYk

 

[Shifting_Gears]

A 96 month loan is a terrible decision unless it’s 0% APR and of course that doesn’t exists. Even then, you’re paying forever on a depreciating asset.

Anything over 60 mo is debatable depending on your interest rate. For someone looking for a low payment, any manufacturer offering 0% for 60 or even 72 mo is the way to go.

I got 2.9% on my GT and I was happy with that, as it was 2 MY old.

What I really regret was trading my ST which was nearly paid off in for my GT and starting to cycle all over again. I love my GT but I think I would’ve come to love no car payments more.

 

[cosmic charlie]

Maybe for one of these....

 

[Hack]

Maybe for one of these....

I would love to buy one of those Factory Five Daytona Coupe kits!

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