Average S550 monthly payment?

[Cory S]

Have you actually crunched the numbers? Even if you ignore the inflation rate which is WELL over 8pct currently, at less than 3 the bank is eating inflation too. You make money during the purchase. If you're not AT LEAST right side up on the deal within the first 6 mo them you over paid. With any luck you should have crammed 15pct depreciation up the dealers arse before the car even rolled off the lot.

If you want to burn cash up front then put enough down to be equity positive when leaving the lot.

I’ve crunched all the numbers. What I said was the best way to acquire a vehicle period.

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[RocketGuy3]

$532 on my Mach 1, 72-mo at 1.95%, financed ~$35K.

I put $20K down for no particularly good reason, probably should have put less, but oh well.

 

[Cory S]

I put $20K down for no particularly good reason, probably should have put less, but oh well.

It was the smartest thing you could have done.

 

[RocketGuy3]

It was the smartest thing you could have done.

At a 1.95% interest rate? Nah. Especially now, I can beat that in my damn savings account, even after taxes. But pretty much at any time, if you can get a rate that low, there's very little sense paying cash.

It was mostly my not wanting high monthly payments in case I choose to buy a new house anytime soon, but I doubt it was necessary.

 

[tdstuart]

I understand the thought behind your question and it applies to many, many more things As well.
I’m blown away with the spending I see going on, I just don’t get it. People are shopping payments.
I’m seeing spending habits from the 20-40yo crowd that will flat out get ‘em in trouble tomorrow.
The inflation rate came out again this morning @8.2%. I’ll guarantee it’s higher than that when we continue to see gas and groceries alone still climbing.
I here people complaining yet won’t give up their $15 a day Starbucks habit. The younger crowds don’t know how to shop to save and certainly don’t know how to cook. Their habits have not changed during this recession.
I know this doesn’t apply to all young folk but it’s pretty prevalent.

I worked at a coffee stand and the amount people spend on coffee a day is insane… $10 drinks every day really adds up.

Just buy some coffee from the store and make it at home. They even have cold brews and fancy milk frothers for cheap now.

 

[RocketGuy3]

Ah, just saw some of your previous posts, @Cory S. I don't think your math is quite right. Historically, investing cash generally will give you much higher returns than paying cash for your car, assuming you can get a loan with a sufficiently low interest rate. This is true regardless of how quickly your car depreciates.

 

[Cory S]

Ah, just saw some of your previous posts, @Cory S. I don't think your math is quite right. Historically, investing cash generally will give you much higher returns than paying cash for your car, assuming you can get a loan with a sufficiently low interest rate. This is true regardless of how quickly your car depreciates.

In a normal economic 7.5-9% return sure. In this Biden economy, nobody has made a 7.5-9% return in the past 2 years.

Putting the most money down is the best financial move when buying a car to OWN period.

 

[tdstuart]

Ah, just saw some of your previous posts, @Cory S. I don't think your math is quite right. Historically, investing cash generally will give you much higher returns than paying cash for your car, assuming you can get a loan with a sufficiently low interest rate. This is true regardless of how quickly your car depreciates.

Yes investing is the key. Better to have a car payment and invest the cash.

 

[shogun32]

nobody has made a 7.5-9% return in the past 2 years.

umm, not so fast skippy.

 

[Cory S]

I worked at a coffee stand and the amount people spend on coffee a day is insane… $10 drinks every day really adds up.

Just buy some coffee from the store and make it at home. They even have cold brews and fancy milk frothers for cheap now.

This country is nothing but lazy, greedy and financial oblivious people in the world.

 

[tdstuart]

This country is nothing but lazy, greedy and financial oblivious people in the world.

Same people who drink 1000 calorie drinks everyday and wonder why they are fat.

In highschool I had some overweight friends say that because they were poor they were fat. Like bruh it should be the opposite… but they were convinced because they are lower middle class that they were destined to be fat because they couldn’t afford “good” food.

 

[RocketGuy3]

In a normal economic 7.5-9% return sure. In this Biden economy, nobody has made a 7.5-9% return in the past 2 years.

Putting the most money down is the best financial move when buying a car to OWN period.

7-10% returns is the average over the long term. Yes, it's been a rough couple years (I'm not his biggest fan, but not sure how much Biden could have done about that), but there are few 7-year periods where the stock market doesn't have positive returns. A good way to lose money is to try to predict when that won't be the case. If you try to time the market, you lose... And then there's the average returns for Bitcoin since it's inception , but I digress. The best thing you can do is invest in assets that make sense now, and not worry about short term fluctuations.

Besides that you don't HAVE to invest that aggressively. If you invest in bond funds, real estate, etc, you're also likely to do better than you will buying a car with cash if you have good credit. Hell, today, I can make more money than my interest payments in any high yield savings account, let alone in I-bonds, T-notes, etc...

 

[wynand32]

In a normal economic 7.5-9% return sure. In this Biden economy, nobody has made a 7.5-9% return in the past 2 years.

Putting the most money down is the best financial move when buying a car to OWN period.

I'm not following you here. You don't have to get a return of 7.5%-9% to make more money investing versus a loan with lower interest. If as in the most recent example you're paying 1.95% then you don't have to make much more of a return to at least break even (accounting for taxes). Then anything beyond that is making money.

Take the $50K you'd spend on the car, put it into a safe investment and don't touch it, and you'll have made more money by the end of the loan period than you'll have spent on the loan.

This is assuming, of course, that we're not talking about how smart it is in general to buy something so expensive that tends to depreciate pretty quickly. We're also not talking about the overall financial picture, which is quite varied for different people. We're just comparing the use of money, which is pretty easy to figure out mathematically.

 

[RocketGuy3]

I'm not following you here. You don't have to get a return of 7.5%-9% to make more money investing versus a loan with lower interest. If as in the most recent example you're paying 1.95% then you don't have to make much more of a return to at least break even (accounting for taxes). Then anything beyond that is making money.

Take the $50K you'd spend on the car, put it into a safe investment and don't touch it, and you'll have made more money by the end of the loan period than you'll have spent on the loan.

This is assuming, of course, that we're not talking about how smart it is in general to buy something so expensive that tends to depreciate pretty quickly. We're also not talking about the overall financial picture, which is quite varied for different people. We're just comparing the use of money, which is pretty easy to figure out mathematically.

And this is all besides the fact that it's silly to judge a volatile asset by any one-year period... Over a sufficiently long term, the stock market will continue to destroy the interest rate of any reasonable car loan. Let alone the fact that you don't have to invest that aggressively to beat a low interest loan.

 

[Dave2013M3]

$532 on my Mach 1, 72-mo at 1.95%, financed ~$35K.

I put $20K down for no particularly good reason, probably should have put less, but oh well.

I agree, at 1.95% its almost free money. However, you got a payment you like. Also the car in the current used car market his holding its value so pretty good.

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