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

Discussion in 'General Automotive Topics (non 6th Gen Mustang)' started by 1MEAN18, Nov 24, 2019.

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Would you do an 8 year auto loan to get a car you really couldn't afford?

  1. Yep, I want what I want and if this is how to get it so be it!

    12.8%
  2. Ah hell no, never!

    44.4%
  3. I don't buy cars I know I cannot afford under any circumstance.

    42.8%
  1. TheGame1190

    TheGame1190 06 Time Person ofthe Year

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    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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  2. 3star2nr

    3star2nr Well-Known Member

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    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.
     
  3. Hack

    Hack Well-Known Member

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    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.

    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?
     
  4. BmacIL

    BmacIL Enginerd

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    Agreed. We couldn't rationalize a payment that high. Thus our 20% of net instead of gross.
     
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  5. kluke15

    kluke15 Well-Known Member

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    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.
     
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  6. jvandy50

    jvandy50 H3249

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

    Cobra Jet Well-Known Member

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    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.
     
  8. cib24

    cib24 Well-Known Member

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    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?

     
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  9. OP
    OP
    1MEAN18

    1MEAN18 Well-Known Member

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    reading back thru all the responses, this has been an interesting thread.
     
  10. jvandy50

    jvandy50 H3249

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    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.
     
  11. TheGame1190

    TheGame1190 06 Time Person ofthe Year

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

    What is a "Ford approved mod"?
     
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