41–50 of 95 posts
That’s an interesting data point. makes me wonder what other unconventional metrics could be considered to get a temperature on our economy.
Why do people borrow money to buy a car? Why not save money, maybe invest in something safe(ish), and buy your car in cash, preferably used? I get it that people get emotional about cars, but good heavens, this impulse puts you in the hole for years. It's almost as bad as cheating on your wife (and far, far worse than cheating on a gf).
> Why do people borrow money to buy a car? Because new cars are nice, and people are bad at time value of money? Also I think it's partially a cultural thing, very few of my friends and family buy brand new cars but I know some people would never even consider a second-hand vehicle. > It's almost as bad as cheating on your wife (and far, far worse than cheating on a gf). What a curious point for comparison! Although…
Earlier quoted context omitted.
Car financing is a good way to build credit before buying a home. I regret that my credit score actually went down when I paid off my car loan early. The rules are really weird here. Using some credit is better than using no credit if you think you might need credit in the future (mostly to buy a house). Also, buying a new car is much less of a hassle than buying a used one. The price difference between used and new…
> Car financing is a good way to build credit before buying a home. I've heard people say this, but it's never made sense to me and sounds like something the loan industry has convinced people of just to sell more loans. Is it actually true? Every time I've gotten a mortgage, they seem to just care about my income and whether I've had any missed payments on credit cards or other bills before. And credit scores aren’t…
For sure, current income is a more important predictor of future income and future sufficient income is a predictor of future payment.
Installment loans are a decent part of credit scores, but mortgage lenders look into the details, so credit score isn't everything to them like it can be for smaller loans.
Why do people borrow money to buy a car? Why not save money, maybe invest in something safe(ish), and buy your car in cash, preferably used? I get it that people get emotional about cars, but good heavens, this impulse puts you in the hole for years. It's almost as bad as cheating on your wife (and far, far worse than cheating on a gf).
Why do people borrow money to buy a car? Why not save money, maybe invest in something safe(ish), and buy your car in cash, preferably used? I get it that people get emotional about cars, but good heavens, this impulse puts you in the hole for years. It's almost as bad as cheating on your wife (and far, far worse than cheating on a gf).
People cannot forgo having a car for the time it would take to save up the cash.
Once you have that beater, you can start saving for something nicer. Find a make and model with decent reliability history that has hail damage or minor collision damage. It’s not hard to do.
If you can’t scrape together $2k to buy that beater then you have no business owning a car, period.
Why do people borrow money to buy a car? Why not save money, maybe invest in something safe(ish), and buy your car in cash, preferably used? I get it that people get emotional about cars, but good heavens, this impulse puts you in the hole for years. It's almost as bad as cheating on your wife (and far, far worse than cheating on a gf).
If you have good credit (>760) you can get 0% interest or close to it loans pretty regularly if you wait. At that point there is no reason for me not to take on the loan and just setup autopay.
Earlier quoted context omitted.
People cannot forgo having a car for the time it would take to save up the cash.
Yeah, I’m not buying it. It’s not a choice between having a tricked out 2022 Lexus that costs $70k and no car at all. It’s the choice between a 2005 beater Toyota with 200k miles on it and no car. Once you have that beater, you can start saving for something nicer. Find a make and model with decent reliability history that has hail damage or minor collision damage. It’s not hard to do. If you can’t scrape together $2…
Why do people borrow money to buy a car? Why not save money, maybe invest in something safe(ish), and buy your car in cash, preferably used? I get it that people get emotional about cars, but good heavens, this impulse puts you in the hole for years. It's almost as bad as cheating on your wife (and far, far worse than cheating on a gf).
A combination of liquidity, lack of discipline, or something in the middle. As others have pointed out below, some people don't have enough cash to buy a car when they need one. Other people have enough money to buy a car, but wish to purchase a nicer car because of vanity or enjoyment reasons. And other people are in the middle: they could afford to buy a low-end vehicle in cash, but they realize that the transactio…
I highly doubt his time spent at the tag office and at the dealer buying those cars is going to be worth more than ~$1,500, which is roughly what you’d pay in interest for a 5 year note at 3% interest.
Earlier quoted context omitted.
People cannot forgo having a car for the time it would take to save up the cash.
Yeah, I’m not buying it. It’s not a choice between having a tricked out 2022 Lexus that costs $70k and no car at all. It’s the choice between a 2005 beater Toyota with 200k miles on it and no car. Once you have that beater, you can start saving for something nicer. Find a make and model with decent reliability history that has hail damage or minor collision damage. It’s not hard to do. If you can’t scrape together $2…
You know you need this car for 10+ years, you want it to suit you and your family, so you get a 20k loan and get the one you that will be best now. Why waste your time and money with the beater? You would spend morein the long run than the cost of the interest on the loan (essentially the cost of purchasing now not later)
Debt is a calculated risk, with a clear cost, and plenty of people are fully capable of doing the math.
Earlier quoted context omitted.
A combination of liquidity, lack of discipline, or something in the middle. As others have pointed out below, some people don't have enough cash to buy a car when they need one. Other people have enough money to buy a car, but wish to purchase a nicer car because of vanity or enjoyment reasons. And other people are in the middle: they could afford to buy a low-end vehicle in cash, but they realize that the transactio…
We’re talking about about a guy who only has $5,000 on hand to buy the first car. Those transaction costs are dwarfed by interest payments. I highly doubt his time spent at the tag office and at the dealer buying those cars is going to be worth more than ~$1,500, which is roughly what you’d pay in interest for a 5 year note at 3% interest.
Factor in the time spent selling the vehicles (or getting screwed by the dealer on trade-in value), and it's much easier to see why financing a single more-expensive purchase could make financial sense.
Of course, this doesn't apply in states with low/no sales tax.