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Smart Shopper Percentage of monthly income spent on a car?
390 messages, Last post on Mar 21, 2009 at 5:50 PM
You are in the Smart Shopper Forum. Your Hosts are kirstie_h & tidester
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Replying to: qbrozen (Mar 07, 2008 8:17 am) |
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Replying to: british_rover (Mar 06, 2008 3:36 pm) You must have missed the recent plunge in interest rates, you are pretty unlikely to earn 3.9% in those safe investments right now. My MM is down to about 3.6%. Then you would have to pay tax on whatever you do earn, so even though you could earn fairly close to 3.9%, the after-tax yield would be well below the 3.9%, that you would be paying (with after-tax dollars) on the loan. That said, if somone does not have the cash, that rate would be a good deal...assuming you are not charging an inflated price for the car, to offset the discounted interest rate..
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Replying to: jeffyscott (Mar 07, 2008 12:44 pm) I also doubt rates will stay this low for long. You are better off to lock in the low interest rate for 3, 4 or 5 years then hang onto your cash to put into better investments later then tying up thousands of dollars in a depreciating asset. The 3.9% comes from the manufacturer as part of the CPO program so it is independent of the price of the vehicle as long as it meets the CPO guidelines.
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Replying to: british_rover (Mar 07, 2008 1:39 pm) You could find things that you hope will beat the 3.9%...but when you move beyond things that are essentially risk free that is comparing two different things. Not taking the 3.9% loan is a risk free 3.9% after taxes. With a combined state and federal marginal tax rate of 30%, one would have to earn about 5.6% before taxes. |
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Replying to: joesmith2 (Mar 06, 2008 2:51 pm) You don't like insurance companies. Fine. I don't like lairs. |
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Replying to: joesmith2 (Mar 06, 2008 2:51 pm) Not sure what this is supposed to mean  . That is exactly what an insurance company promises...that they will give you the actual cash value of your car if it is stolen. The price of this protection is the premium paid for "comprehensive". If you don't like the price, you don't have to buy that coverage and you take on the risk of loss yourself. The reality is you are not stealing from the insurance company, you are stealing from all the honest policy holders. We have to pay higher premiums to cover the cost of fraud by others. |
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I wonder how long this post is going to last? If I do want to post, it takes me a whole 5 miuntes to create a new id, along with new email address. And don't bother flagging my IP address, it changes everytime I log on. I've been nice. But if you make car payments, you're a fool. And part of the reason the country is in a credit crisis. 
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