car notes bout to be da new housing bubble VOL. NTers paying BMWs off in 73 months

[crcballer55]

2007 is when everything started going downhill and caught those with debt payments red handed. Even many of those with so called, "manageable levels" of debt found out otherwise when job losses began to mount, jobs began to vanish, and home and stock values plummeted. Those with paid for assets didn't have to worry, whereas those who had to make payments needed to worry about where the money to pay for basics was going to come from.

Will it happen again? I doubt it, but I'm not taking my chances again. It was bad enough not having a job once without a car payment. I can't imagine the stress of having a car payment to go with it. You're going to have depreciation with any car you buy. The only difference is the total cost of the vehicle over time.

What other kinds of investments were you talking about other than the stock market? I'm drawing a blank right now on anything that has that kind of yield and relative security other than Real Estate. But in that case, you're double exposed by your example.

There are plenty of ways to make money in a declining market. You just change your investment strategies.

One thing you are not considering is the fact that the person B still has the cash in your 2007 scenario. We can go back and forth on this with all types of nuances and what ifs (how much total cash savings do they have are they homeowners). I was pointing out the fact that it really comes down to interest rate and how much it costs you to finance the vehicle. A few years ago banks where financing 0% for 60 months so essentially that was the exact same thing as cash. In this scenario person A and person B both spend the exact same amount. The only difference is person A ties up a larger amount of cash in the car while person B has more options. With all of that being said person B can always pay off the car whenever they want because they have the cash!

Bottom line: Person A has 40,000 less in debt but they also have 40,000 less cash. Person B has 40,000 more in debt but also 40,000 more cash. So whats the variable? Cost of the debt (interest rate) vs return on cash (yield)

Yes, I know that you can short stocks to hedge your bet. But how many people actually try doing that to finance a purchase? Not to mention you're trying to time those stocks and increasing your risk level if you're wrong. If it were such a good deal, most of the people working on Wall Street who were the smartest kids in their class working for the smartest companies wouldn't have been in the dire situation they found themselves in when their companies went under during the financial crash. Just something to think about.

Which banks were financing at 0%? Banks make their money off the spread of borrowed money. Unless they were the finance arms of the car companies, their incentive was to get you into a new car. But 80% of people that buy a car with the intention of getting a 0% loan drive off the lot with some form of an interest rate, so it's a bait & switch tactic.

What happens if the two people in your example did that in 2007 though? Equations like this only deal with the numbers and fail to account for variables like risk. Not to mention that people buy more when they finance it than when paying with cash. When a person pays for a purchase over time, they don't feel the full impact of the purchase

man you are always trying to tell people what to do with their money; you must be cheap as hell man

washing plastic baggies and crap

Stingy? no. Living below my means? absolutely!

How do you get being stingy from this? I've just learned a lot about the psychology of finance over my lifetime and tried to apply them while helping others. There's a reason why dealerships only advertise the finance/lease price and it's not because it benefits the consumer.

 

[thunderchunk69]

I've just learned a lot about the psychology of finance over my lifetime and tried to apply them while helping others.

There's a reason why dealerships only advertise the finance/lease price and it's not because it benefits the consumer.

word

 

[stillin729]

So wait a business does what is best to generate profits?

 

[larrydavid]

2007 is when everything started going downhill and caught those with debt payments red handed. Even many of those with so called, "manageable levels" of debt found out otherwise when job losses began to mount, jobs began to vanish, and home and stock values plummeted. Those with paid for assets didn't have to worry, whereas those who had to make payments needed to worry about where the money to pay for basics was going to come from.

Will it happen again? I doubt it, but I'm not taking my chances again. It was bad enough not having a job once without a car payment. I can't imagine the stress of having a car payment to go with it. You're going to have depreciation with any car you buy. The only difference is the total cost of the vehicle over time.

What other kinds of investments were you talking about other than the stock market? I'm drawing a blank right now on anything that has that kind of yield and relative security other than Real Estate. But in that case, you're double exposed by your example.

There are plenty of ways to make money in a declining market. You just change your investment strategies.

One thing you are not considering is the fact that the person B still has the cash in your 2007 scenario. We can go back and forth on this with all types of nuances and what ifs (how much total cash savings do they have are they homeowners). I was pointing out the fact that it really comes down to interest rate and how much it costs you to finance the vehicle. A few years ago banks where financing 0% for 60 months so essentially that was the exact same thing as cash. In this scenario person A and person B both spend the exact same amount. The only difference is person A ties up a larger amount of cash in the car while person B has more options. With all of that being said person B can always pay off the car whenever they want because they have the cash!

Bottom line: Person A has 40,000 less in debt but they also have 40,000 less cash. Person B has 40,000 more in debt but also 40,000 more cash. So whats the variable? Cost of the debt (interest rate) vs return on cash (yield)

Yes, I know that you can short stocks to hedge your bet. But how many people actually try doing that to finance a purchase? Not to mention you're trying to time those stocks and increasing your risk level if you're wrong. If it were such a good deal, most of the people working on Wall Street who were the smartest kids in their class working for the smartest companies wouldn't have been in the dire situation they found themselves in when their companies went under during the financial crash. Just something to think about.

Which banks were financing at 0%? Banks make their money off the spread of borrowed money. Unless they were the finance arms of the car companies, their incentive was to get you into a new car. But 80% of people that buy a car with the intention of getting a 0% loan drive off the lot with some form of an interest rate, so it's a bait & switch tactic.

You wouldn't even have to go as deep as shorting stocks, while not near as profitable, using crcballer's scenario... You could invest in Short Term Bonds, Commercial Loans or CD's that carry virtually zero risk. 

Again, using his scenario, Person B has 40 racks on hand and invest that paper in these said bonds... IF  banks were offering these extremely low interest rates at the time (>1.5%) Person B is making some extra money off the cash that he would've dropped up front, contrary to Person A who spent 40k from the jump.

 

[dacityslanga]

I'm not surprised though. Half of these folks out here with luxury cars have $800+ payments unless they go for the 72/84 month financing.

see this all the time in the DC Area, especially PG County.

There should be no reason to finance a car for 97 months, when most warranties wont even last after 60 months. If you cant do 60 or less, dont buy it

 

[franco23x]

i think they started at 85 but due to slow sales they had to cover their costs and increases the price gradually.

Nope. Yen gained value on the dollar. Dollar bought less. Nothing changed in the GT-R to justify a $20k increase.

its also gained almost 100 horses from its debut.

100Hp = 20k?

 

[stillin729]

Nissan either upped the price or stopped making it


The car is still a huge bargain for what it is

GTR>R8

 

[ninjahood]

i think they started at 85 but due to slow sales they had to cover their costs and increases the price gradually.

Nope. Yen gained value on the dollar. Dollar bought less. Nothing changed in the GT-R to justify a $20k increase.

its also gained almost 100 horses from its debut.

100Hp = 20k?

:x that what nissan thinks....

 

[al audi]

http://www.moneynews.com/Personal-Finance/auto-loan-bubble-subprime/2013/10/11/id/530588

 

[ninjahood]

http://www.moneynews.com/Personal-Finance/auto-loan-bubble-subprime/2013/10/11/id/530588

And ****** in here question my intelligence

 

[al audi]

And ****** in here question my intelligence

99.9 percent of the time i agree with you my dude

ninjahood dont be lyin, yall might not wanna agree thats all

 

[coldcity]

And ****** in here question my intelligence

90.9 percent of the time i agree with you my dude

ninjahood dont be lyin, all the time

fixed

 

[al audi]

 

[rellireloaded]

Intelligence?  You copy and pasted an article that someone else wrote; that is all.

You kicking it like you predicated something.

And why you using the N word if you don't consider yourself to be black.

 

[al audi]

View media item 635637

 

[denni5themenace]

whats the average interest rate on car loans nowadays? i always see 0% apr for x amount of months type advertisements.

 

[ksteezy]

And ****** in here question my intelligence

but you are not always right dawg....you know a lot about alot of random things, but your percception of these facts can sometimes be wayyyyyy off.....

on this topic tho, just like housing, people tend to live passed their means and this is what leads to people being choked up under a car note, buy what you can actually afford and you should be ok, ive been comfortably pain car notes for the past 8 years, 4 different cars.

 

[stillin729]

Anyone with half a brain sees this coming; you give yourself too much credit

People taking out heavy monthly payments over 5+ years on a car and banks readily lending...gee what could go wrong there

 

[yeah]

Serious.  Have been leasing my entire adult life and plan on doing it forever.  I am financially able, and that new car smell every three years does not get old.

This.. Just got rid of my old ford pickup...

I'll never drive a bucket again. I swear.

Spoiler: Warning: Spoiler!

Soon....




View media item 635679

 

[ninjahood]

Intelligence?  You copy and pasted an article that someone else wrote; that is all.

You kicking it like you predicated something.

And why you using the N word if you don't consider yourself to be black.

Understanding da way a calculator works > punching

Da numbers in waiting for da answer.

And how do YOU know i wrote da N word or not?

Could've just wrote ***** Dat self inflicted racism

Imma victim swag

Moral of da story: debt = modern day usury.

Dont be a moron like ya peers leasing or financing

For a damn decade to badge floss...

 

[ksteezy]

Understanding da way a calculator works > punching

Da numbers in waiting for da answer.

And how do YOU know i wrote da N word or not?

Could've just wrote ***** Dat self inflicted racism

Imma victim swag

Moral of da story: debt = modern day usury.

Dont be a moron like ya peers leasing or financing

For a damn decade to badge floss...

not everyone leases/finances new cars with the intent to floss....dont start with the extremes bro....some people rather have a car with a dealer warranty which they didnt have to drop 10k+ cash and instead put 1k down, committed to an affordable monthly payment and yes paid alot in interest, money that obver the course of the years, no one eem feels it.

 

[ninjahood]

Unless you writing off lease payment as a business

Expense and recouping all that back in da tax season

then Its basically probably one of da biggest money

Wasters, with nothing to show for it in da end of da

Agreement.

 

[ksteezy]

Unless you writing off lease payment as a business

Expense and recouping all that back in da tax season

then Its basically probably one of da biggest money

Wasters, with nothing to show for it in da end of da

Agreement.

unless you are a mechanic and very into the maintanence of a car, a used car out of warranty is just as much a waste of money....

you are paying for convenience and comfort, my shift starts at 7pm, i walk out my house at 6:55pm and make it on time because of my car, you will never convince me that a car

 

[theboxstacker]

Auction cars FTW. I don't plan on paying another car note in my life. Did it one time and just didn't like it. Can't see myself doing it again.

 

[hoosierdaddy317]

 

Unless you writing off lease payment as a business

Expense and recouping all that back in da tax season

then Its basically probably one of da biggest money

Wasters, with nothing to show for it in da end of da

Agreement.

unless you are a mechanic and very into the maintanence of a car, a used car out of warranty is just as much a waste of money....

you are paying for convenience and comfort, my shift starts at 7pm, i walk out my house at 6:55pm and make it on time because of my car, you will never convince me that a car <<<<<< no car, or that a used car out of warranty bought in cash <<<<<<<<< a brand new car, with a well budgetted monthly payment and reasonable interest rate with full warranty.

CONVENIENCE IS NOT FREE.

Not necessarily true. There are a lot of good cars out there out of warranty that are in great condition x are the better buy for your money.  Just because you buy a new car, doesn't mean that its the best deal. 

The best possible way to drive a car though is definitely leasing. Paying cash or financing a new car is dumb IMO. You're paying interest (unless you're paying 0% obviously) and depreciation. Really depends on what kind of car you get though

I'm a sales/leasing consultant for a Benz dealer here in the city and we FINESSE the hell out of ppl on their monthly payments all the time. Idk, just don't see the point in taking a loan out for a $70,000 car as a primary vehicle that will be worth close to $30k in 1-2 years