I bought a new car for my wife in 2011. That is the only new car I've ever bought, and the thought of having a car payment was not something I was happy with, but my wife looooooved the car. She's the type of person that doesn't like change for the sake of change, so as long as it stays reliable, we're going to drive it into the ground.
For myself, the new cars that interest me are all out of my price range, so I stick with used.
The_Jed wrote: When I start pining away for a new(er), trouble free vehicle, I can't help but worry about the company I work for now going belly up.
And this essentially describes the topic often mentioned by talking heads on TV: "The Consumer Confidence Index" (CCI). When that number goes down, many manufacturers of "durable goods" see drops in stock value and often sales/profits, thus laying off more people. Which makes the news. And further hurting the CCI. It's an awkward spiral of negativity.
I've always had newer cars with warranties as DD's. The simple reason is warranty and loaner cars. Something goes wrong and I've got a way to get to work and it's no big deal. Also, I'm not rushing to try and find a part on a Tuesday night so I can get to work on Wednesday. It's not as big of a deal now as I can work remotely but for many years it was.
With that debt has been so cheap lately, there is no need to pay cash. My most expensive debt, My house, is less than my returns even with a down year this year. Now, I'm a little different than most as I have cash to back it up but it's just understanding what your comfort level is.
Unfortunately there are a lot of big shiny thing people out there that have to have that shiny new car.
z31maniac wrote:joey48442 wrote: Another interesting take... 13,000 for about the cheapest new car now, In 1990 was 7,177 In 1970 was 2,133 In 1955 was 1,471...Is this inflation adjusted? If not, it's pretty meaningless.
Sorry, yeah, that came out opposite how I meant it. 13,000 dollars in 2015 has the buying power of 7,177 in 1990. I wasn't talking the cheapest care price in 1990. So, 7,177 in 1990, adjusted for inflation, is 13,000 in today's money
alfadriver wrote: In reply to volvoclearinghouse: Well, in the long run- kind of hard to try to meet your opinion relative to the fact that over 15M cars are sold every year that you don't agree with. Sorry, but being that I have a financial interest in it, I'll gladly sign with the people paying my salary.
I understand your position. And I know that 15M pieces of shiny new metal roll off of showroom floors every year. There's probably 100M people in this country that "need" a car for their lifestyle. And probably only a few million (or even fewer) who are willing to deal with the maintenance and repair on something not covered under a warranty. So they'll pretty much buy whatever is for sale.
Appleseed wrote: What pushed me to a new car is reliability and parts. I DD an 87 4Runner with 450,000 on it. I blew a radiator in the winter months. 2 days to get a replacement and then the thrash to get it back together to be able to get to work. After killing two 22REs (again in the winter months) I realized there aren't any cheap, low mile 22REs left. The last one was made 20 years ago. So I bought my first new car at 37.
I would say you got your money's worth out of that car. I'm starting to wonder if I should start looking for a clean, low mile W123 Benz...basically a "forever" car.
Greg Voth wrote: I'm one of the people with a 6 year payment on a new car. I tried to avoid it by looking for something around $5-8k cash but looking at running 25k-50k a year the only cars with good mpgs had about 150k miles. I was starting a new job and loosing my company car. I didn't want to tie up a bunch of cash or have a high monthly payment if the job didn't turn out long term. I am now about 20 months into the job and at 78,000 miles. The Cruze has been nearly flawless and I've been making double payments. I'm probably under water on it still but could pay it off now if I needed to. Not my ideal scenario but I plan to keep the car to 300k+ or as long as it stays reliable. Since I need it for work and can't often use the excuse of car troubles for missing inspections I very well may opt for another new car at that point payment be damned.
I am also on a longer payment term but I did that on purpose because we were putting my wife thru grad school and saving for a house. Now that is about done I plan on paying it off faster.
If you are planning on a new car purchase for cash, one 'tactic' that worked well for me recently was to NOT mention anything about your intended source of payment until you negotiate the price, and are sitting with the (infamous) F&I "guy". From my experiences, you will get a better negotiated purchase price if the dealership thinks they will also be able to back-sell you the financing for the purchase. Once that price is down on paper, then let them know you're paying cash ... they may try to back out of the agreed to price at that point (VW tried / Honda did not try), but too bad .... it's on paper and they won't have a leg to stand on at that point.
einy wrote: If you are planning on a new car purchase for cash, one 'tactic' that worked well for me recently was to NOT mention anything about your intended source of payment until you negotiate the price, and are sitting with the (infamous) F&I "guy". From my experiences, you will get a better negotiated purchase price if the dealership thinks they will also be able to back-sell you the financing for the purchase. Once that price is down on paper, then let them know you're paying cash ... they may try to back out of the agreed to price at that point (VW tried / Honda did not try), but too bad .... it's on paper and they won't have a leg to stand on at that point.
I have a hard time believing the dealership won't ask how you'll be paying before discussing numbers. When I worked at a dealership, "tactics" like this caused quite a bit of entertainment. Remember, these guys do this all day, every day - they've seen it before.
I usually just tell them that how I'll be paying depends on how good their price is and how good their financing offer is.
Duke wrote: I usually just tell them that how I'll be paying depends on how good their price is and how good their financing offer is.
I do the same. I think Keith is right though, I've never had one tell me they can give me a lower price if I do it one way or the other. Even if it's true, they never admit to it.
Ian F wrote:The_Jed wrote: When I start pining away for a new(er), trouble free vehicle, I can't help but worry about the company I work for now going belly up.And this essentially describes the topic often mentioned by talking heads on TV: "The Consumer Confidence Index" (CCI). When that number goes down, many manufacturers of "durable goods" see drops in stock value and often sales/profits, thus laying off more people. Which makes the news. And further hurting the CCI. It's an awkward spiral of negativity.
And this is why I have never bought, and will never buy a house.
Until somebody gives me a 30-year job contract (ha!) I won't be signing a 30-year loan.
I have taken a loan precisely twice for cars I couldn't afford. 1989 and 1995. I was in a complete panic from the day I signed the loan until the day I paid it off. Never again.
In reply to EvanR:
Some people are completely allergic to debt. Some are addicted. It's a tool - the effectiveness is all in how you use it.
I, for one, am looking forward to many years without paying rent or a mortgage to keep a roof over my head. I'll have my house paid off in about 2 years, well before I turn 55.
I'm allergic to carrying debt, with the exception of a mortgage. My money earns much more elsewhere. I'll pay off my mortgage as late as I possibly can.
Duke wrote: In reply to EvanR: Some people are completely allergic to debt. Some are addicted.
I'm only allergic to the kind of debt I don't know if I can pay off. I have two loans out right now (personal and car) that I could pay off tomorrow.
mazdeuce wrote:Duke wrote: I usually just tell them that how I'll be paying depends on how good their price is and how good their financing offer is.I do the same. I think Keith is right though, I've never had one tell me they can give me a lower price if I do it one way or the other. Even if it's true, they never admit to it.
My company bought me a new work truck last year. The price was literally $1000 higher if we paid cash over financing it. My employer doesn't finance anything and they paid the higher price.
In reply to EvanR:
I can understand. I did pay off my house at 43 (3 years early on a 15 year mortgage) and it's one reason why the prospect of permanently relocating to NH from PA for work gives me pause. Do I really want to start over with buying a house at 46 or 47? No. Not really...
Ian F wrote: In reply to EvanR: I can understand. I did pay off my house at 43 (3 years early on a 15 year mortgage) and it's one reason why the prospect of permanently relocating to NH from PA for work gives me pause. Do I really want to start over with buying a house at 46 or 47? No. Not really...
Why would you do that? Turn the equity from one into the other, minimize the loan.
Lof8 wrote:mazdeuce wrote:My company bought me a new work truck last year. The price was literally $1000 higher if we paid cash over financing it. My employer doesn't finance anything and they paid the higher price.Duke wrote: I usually just tell them that how I'll be paying depends on how good their price is and how good their financing offer is.I do the same. I think Keith is right though, I've never had one tell me they can give me a lower price if I do it one way or the other. Even if it's true, they never admit to it.
What would be the penalty for early payoff? More than $1000?
I'm thinkin' 10% down, 90% first month's payment. "Oops I saw the total balance and thought that was the payment, my bad"
alfadriver wrote:Ian F wrote: In reply to EvanR: I can understand. I did pay off my house at 43 (3 years early on a 15 year mortgage) and it's one reason why the prospect of permanently relocating to NH from PA for work gives me pause. Do I really want to start over with buying a house at 46 or 47? No. Not really...Why would you do that? Turn the equity from one into the other, minimize the loan.
Because I'd rather not have a loan at all? 
Then you buy the house you can buy with the money from selling your existing one. Seems fairly straightforward, what am I missing?
I've been on both sides of the car payment philosophy. I've had payments because I wanted what I couldn't afford to pay cash to buy. Sold those cars at losses over the years. Had no payments for a while but I was two clapped-out, high-mileage cars. Both had major breakdowns within a week's time and left me without transportation to perform a job I was required to drive to perform. With no emergency reserve, I panicked and, out of desperation, bought a new vehicle for way too much money. Never again. When this one is gone, I'm done for good. I'll manage my finances properly and plan for emergencies instead of letting desperation cause stupid decisions.
That said: This truck (2011 Ford Ranger 4wd with 4.0l v-6) has been the most amazingly reliable vehicle I've ever owned. I've only done tires and brakes. Gas mileage is Godawful but everything else has been great.
In reply to Keith Tanner:
Because on a good day my house in PA is worth about $135k. From the research I've done, not going to get anything similar (preferably with more garage/shop space) up here for the same money. I should be able to save up additional money to put towards something.
We'll see. While the money has been decent (yay for per diem living!), the stress level has been off the chart compared to my previous assignment. I'm not sure I really want to be up here permanently.
I guess that's why you get paid more there! Then you put it towards the house. At least you shouldn't have to finance much of the total, which makes for good rates.
Some major lifestyle decisions in front of you. They're never easy.
Keith Tanner wrote:einy wrote: If you are planning on a new car purchase for cash, one 'tactic' that worked well for me recently was to NOT mention anything about your intended source of payment until you negotiate the price, and are sitting with the (infamous) F&I "guy". From my experiences, you will get a better negotiated purchase price if the dealership thinks they will also be able to back-sell you the financing for the purchase. Once that price is down on paper, then let them know you're paying cash ... they may try to back out of the agreed to price at that point (VW tried / Honda did not try), but too bad .... it's on paper and they won't have a leg to stand on at that point.I have a hard time believing the dealership won't ask how you'll be paying before discussing numbers. When I worked at a dealership, "tactics" like this caused quite a bit of entertainment. Remember, these guys do this all day, every day - they've seen it before.
Honda dealer asked, and my response was "I'm open to options". After this, payment source wasn't brought up again until in the F&I room during paperwork finalization.
VW dealer never asked, and I didn't bring it up (no benefit for me to do so).
Yea, I get it ... they do this type of business 'every day', we don't. But I sell capital equipment for a living, so sales tactics are not new to me. Also, with cash buyers for new vehicles being the vast minority, I suspect there is a high probability of the dealership being in contention to be the finance source, so getting the customer to provide a definitive answer to this question - if it is even asked - is not a priority.
BTW, both cars bought on last day of the month - maybe that puts a higher sense of urgency on closing regardless of the margin on that particular unit. My only point is this worked for me in 2011 for the VW, and again in 2014 for the Honda.
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