What car do you drive?

[Engineer]

2003 Dodge Intrepid that I bought new in 2003. Around 130,500 miles on it. Mostly drive back and forth to work between 3,500 and 4,000 miles per year.

Wife: 2017 Ford Explorer XLT - purchased a month ago - haven't made first payment.

Car that I didn't need (and hardly ever drive): 2016 Lexus ES-350 - 4,400 miles - wife put 2,600 on it in a week driving around the country with her parents.

 

[bigboxes]

2009 Toyota Camry LE. Just passed 95K. Had to replace the water pump and belt tensioner a couple months ago. Did the work myself. Don't see the point in paying someone else for work that I can do myself.

 

[mztykal]

2017 Toyota Tacoma
2015 Toyota Camry (wife's car)
2002 Toyota MR2 (project)

 

[Fenixgoon]

2010 hyundai genesis coupe 2.0T R-Spec

just sold my motorcycle. looking to get a fun/ridiculous/practical/impractical car. currently eyeing ~2008 Audi S6's. V10. Mmmm

 

[NutBucket]

Or they just get a 100 month loan and call it good....

 

[madoka]

currently eyeing ~2008 Audi S6's. V10. Mmmm

Every time I think about getting an Audi, I refer back to this picture of what their timing chain looks like:

 

[Safeway]

Looking to get a fun/ridiculous/practical/impractical car. currently eyeing ~2008 Audi S6's. V10. Mmmm

In a word: DON'T.

Don't get a V10 Audi (R8, S6) or a V10 BMW (E60 M5). For that matter, don't get any BMW with the N63 V8TT. Having owned high performance luxury vehicles while under warranty -- Factory, CPO, Route66, CarMax, or otherwise -- I would never own one that wouldn't qualify for, at least, a comprehensive aftermarket warranty. Unless, of course, it's a collectors item and/or you're wealthy enough to deal with the carnage.

The Ferrari F136 V8 that was in my F430, and the F140 in my current F12, was more reliable and cost less to maintain than the N63 V8TT that was in my 750Li, which had $36k in paid warranty claims over a brief 11 months of ownership. Aside from some complimentary recall work and sticky soft-coat rubber that plagued these vehicles, the F430 only required routine maintenance. The 750Li required two new turbos which were immediately fouled by the shit show of an engine, necessitating a full engine and transmission replacement. The idle was rough, I'd get drivetrain malfunction warnings that put the car into limp mode, the adaptive transmission couldn't shift for shit, and I was twice greeted with a deflated air suspension in the morning. I politely pointed them to the Texas Lemon Law and reminded my service rep that I was an attorney. BMWNA bought back the car for 100% of the purchase price.

 

[Archer27]

I drive a 1997 Dodge RAM 1500. Yes it guzzles fuel, yes it is always needing something and the body has some rot but it is mine and I take great pride in knowing that I'm keeping it on the road with my own two hands.
Doing a radiator job on it tomorrow!

I do have 3 antique vehicles, but those won't ever see road salt or high mileage.
I rebuilt 2 of those antiques from the ground up and the other I finished a restoration someone else started.

 

[KlokWyze]

2013 dodge dart aero. wanted a manual and needed one asap. thought the price was good and picked it up. drives like shit. clutch has no feedback and it's baby fist sized turbo and 1.4 liter engine are weak. want to get something else but need to take care of some debt first so I'm stuck with it for the moment. i actually miss my 2002 GTI 1.8T (for a brief moment) even regarding all it's nagging problems.

wife has a 2015 ford edge. SE package I believe and it is nice.interior and eletrical/digital package is 10/10. nice power and gas mileage. totally recommend it.

 

[Ferzerp]

The best way to buy a car is to pay cash because that costs the least. Financing a car (unless you get a stellar 0% financing deal) will cost you more long-term. Leasing a car will cost you money every month, forever, as long as you are leasing. The only thing that is "best" is what your financial situation & personal goals dictate. A lot of people look at leasing as throwing money away, but I leased for about 10 years & don't regret it at all...a lower, fixed monthly price that fit my budget & a new car every few years that didn't have anything major break so there were never any huge unexpected car-repair expenses really fit me well.

It also depends on what you like to do with your money. If you're buying a $25k car and you put $10k down, your monthly payment will be a lot lower. However, you can also take that $10k and invest it to grow bigger or keep it for a rainy day, like if some emergency comes up in your health or something. Generally, most people put a decent down-payment on their car in order to achieve a monthly loan number that fits their budget.

When car financing interest rate is less than the cost of money then no, you're incredibly wrong. For the past few years, it costs more to pay cash than to finance due to crazy low interest rates. Saying financing is always more expensive is a naive statement that really only applies to the less financially responsible.

 

[Engineer]

When car financing interest rate is less than the cost of money then no, you're incredibly wrong. For the past few years, it costs more to pay cash than to finance due to crazy low interest rates. Saying financing is always more expensive is a naive statement that really only applies to the less financially responsible.

100% this. I'm paying 0.74% (three year term) on my Lexus and am earning 2% & 3% on my laddered CD's (3 and 5 year terms). My 3 year CD's are maturing so just opened the All America Bank mega account at 1.5%. Even with taxes on the earnings, it's far more than the 0.74%, especially when you factor in compounding. I've run the numbers many times on all of my loans. I've still go to run the numbers on my wife's new Explorer as it's at 2.39%. I'm not so sure that if I took the money (payoff), invested it into the 1.5% account that it would still be more than paying the 2.39% when all is said and done...even when factoring taxes on the earnings (that might stretch it past the point of returns though).

Just ran the numbers and even with taxes, the compounding brings the amount to almost break even. I might refinance it at 1.99%, which would be a money maker for me long term, assuming that my money keeps the 1.5% or higher (even better).

 

[Red Squirrel]

Financing is ALWAYS going to be more expensive, unless it's 0% then it will cost the same. 1% is still 1%. People have to stop thinking about payments and think about the total cost. "But the payments are only nnn..." yeah but you're still going to pay like 40 grand or whatever in the end. That is a big chunk of money that could go towards home improvement projects or something. Companies and governments make the same mistake and that's why they are in debt and keep digging themselves deeper in the hole. They only think short term.

Personally I can't justify the cost of a new car when I can get used for so much cheaper. So I usually save up then buy cash.

 

[Engineer]

Financing is ALWAYS going to be more expensive, unless it's 0% then it will cost the same.

So you're saying that if I have the money to buy a car and instead of buying it, invest it into an account that is making enough (or more) to cover the interest that I'm paying for the loan, I'm losing money?

 

[Red Squirrel]

So you're saying that if I have the money to buy a car and instead of buying it, invest it into an account that is making enough (or more) to cover the interest that I'm paying for the loan, I'm losing money?

If you actually have the cash that's a bit different I suppose, but most people don't have 30-40 grand just lying around and will be making the payments. Investments are also not guarantee, at least the good ones. So it's still a risk. If I actually had that kind of money I'd probably consider investing it myself unless I have big ticket items I need to pay off. I don't like any kind of debt. It's still a risk/liability.

 

[Engineer]

If you actually have the cash that's a bit different I suppose, but most people don't have 30-40 grand just lying around and will be making the payments. Investments are also not guarantee, at least the good ones. So it's still a risk. If I actually had that kind of money I'd probably consider investing it myself unless I have big ticket items I need to pay off. I don't like any kind of debt. It's still a risk/liability.

Not sure how I could be more secure than 5 year - 3% CD's vs a 3 year loan at 0.74%.

I've ran the numbers including paying off the car and then investing the payment for the same period. Still come out well ahead at the interest rates (I ran them at the 1.5% that I'm getting at the bank, not even the 3% locked into the CD's - so the 3% CD's will blow it out of the water).

By the way, I don't like debt either. I'm always itching to pay it off but have to hold back because I know that I'm losing money if I do so.

 

[dave_the_nerd]

So you're saying that if I have the money to buy a car and instead of buying it, invest it into an account that is making enough (or more) to cover the interest that I'm paying for the loan, I'm losing money?

People forget about that. OTOH, unless you're talking about a LOT of principal, you're probably only talking about a few hundred bucks over 4-5 years.

The "not owing any @#$%^& bank any #$%^&* money" part is, IMO, the more important aspect of the "pay cash" school of thought. The attitude is particularly popular with men who have been divorced or gone through a bankruptcy. I get it. If somebody is willing to spend a little extra money to avoid the psychological effects of being in debt, then more power to 'em, I say.

 

[Engineer]

People forget about that. OTOH, unless you're talking about a LOT of principal, you're probably only talking about a few hundred bucks over 4-5 years.

The "not owing any @#$%^& bank any #$%^&* money" part is, IMO, the more important aspect of the "pay cash" school of thought. The attitude is particularly popular with men who have been divorced or gone through a bankruptcy. I get it. If somebody is willing to spend a little extra money to avoid the psychological effects of being in debt, then more power to 'em, I say.

Oh, I don't have a problem with it. I'm just pointing out that you don't necessarily lose money by financing, even if it's not a zero % rate (most zero % rates are money losers when you factor in the rebate that you could have gotten had you not taken the zero % rate).

 

[Ferzerp]

If you actually have the cash that's a bit different I suppose, but most people don't have 30-40 grand just lying around and will be making the payments. Investments are also not guarantee, at least the good ones. So it's still a risk. If I actually had that kind of money I'd probably consider investing it myself unless I have big ticket items I need to pay off. I don't like any kind of debt. It's still a risk/liability.

Sure, it's a "risk", but barring a major financial crash, beating the rate on a car loan in investment return is laughably easy. Even inflation is higher than the car loan interest rates for people with good credit.

 

[Cappuccino]

All the BMW used car APR is around 8-12% what do? Rip off?

 

[manly]

All the BMW used car APR is around 8-12% what do? Rip off?

Not sure what financing terms are like in other countries, but it's still cheap in the U.S. I think 0.9% - 2.9% for buyers with good credit through BMW Financial Services, depending on the model:
http://cpo.bmwusa.com/#specialoffers

8%+ APR is a massive profit, at least by U.S. standards.

 

[Cappuccino]

Not sure what financing terms are like in other countries, but it's still cheap in the U.S. I think 0.9% - 2.9% for buyers with good credit through BMW Financial Services, depending on the model:
http://cpo.bmwusa.com/#specialoffers

8%+ APR is a massive profit, at least by U.S. standards.

You think this is a good deal for £24k BMW 1 series?

https://m.imgur.com/1WrTOXh

 

[ronbo613]

Don't drive a car. I drive a truck. After that, a bicycle.

I see cars all the time, people seem to like them.

 

[Ferzerp]

All the BMW used car APR is around 8-12% what do? Rip off?

That is crap tier credit interest rates for the US. 3 year used loans are ~2% here. Heck, penfed will give you a 6 year loan on a used car (ewwww) at 3.6%

You think this is a good deal for £24k BMW 1 series?

Beats me (and most of the posters here). You'd be better off targeting people who are in your geographical region with that type of question. In U.S. terms, it means you have no business leasing that vehicle because your credit is so bad that you really shouldn't drive that car unless you're capable of paying cash for it.

 

[Safeway]

Financing is ALWAYS going to be more expensive, unless it's 0% then it will cost the same.

You're wrong.

0% financing costs less, and so does any interest rate that is less than inflation. If inflation is 3% and your interest rate is 2%, it's cheaper to finance at 2% than it is to pay cash.

Assume the following:

• Inflation of 3%
• You have $50,000 cash
• You want to buy a $50,000 vehicle

At 0% interest financing over 60 months, the discounted present value of the payments, factoring in inflation, is substantially LESS than $50,000.
At 3% interest financing over 60 months, the discounted present value of the payments, factoring in inflation, is $50,000.

Think about it this way. If someone asked you in 1950 to pay them $10,000 either immediately or in 2017, which would you pick? $10,000 in 1950 was a substantial amount of money. $10,000 in 2017 is negligible. The same principle applies to shorter durations of time.

 

[Red Squirrel]

You're wrong.

0% financing costs less, and so does any interest rate that is less than inflation. If inflation is 3% and your interest rate is 2%, it's cheaper to finance at 2% than it is to pay cash.

Assume the following:

• Inflation of 3%
• You have $50,000 cash
• You want to buy a $50,000 vehicle

At 0% interest financing over 60 months, the discounted present value of the payments, factoring in inflation, is substantially LESS than $50,000.
At 3% interest financing over 60 months, the discounted present value of the payments, factoring in inflation, is $50,000.

Think about it this way. If someone asked you in 1950 to pay them $10,000 either immediately or in 2017, which would you pick? $10,000 in 1950 was a substantial amount of money. $10,000 in 2017 is negligible. The same principle applies to shorter durations of time.

Suppose if you look at it that way but I'm talking strictly dollar amount. "shorter" (like under a decade) term the inflation difference is so negligible I would rather the piece of mind of not having a huge debt over my head than the few dollars my money might be "worth" more in a few years. No matter what, I have to pay that money, so it's not like having it on hand makes any sense vs paying it off, it's money that at some point I need to give out, may as well give it out now and get it over with. Not like I can go buy myself something with it. Well I can... and that's how lot of people end up with debt out the ears.

You can put it in some kind of high interest investment, but that is still a risk. AND you get taxed on it, so the little money you may make will be very negligible in the end. You actually end up paying more taxes too because you still have to pay taxes on the purchase that you are financing, and now if you choose to invest money that you could have used to buy the item cash, you'll pay tax on that money too.