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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: joesmith2 (Mar 08, 2008 6:20 am)
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Replying to: qbrozen (Mar 08, 2008 12:42 pm) Loans come from banks. Banks pay interest on deposits, and make loans. Don't they have to charge more for loans than they pay depositers in order to make a profit? I don't know about anyone's situation, but I got on the Mercury web site and looked at their special offers. One offer was $5500 cash back, or .9% interest for 60 months with 10% down. I made a spreadsheet, and did some figuring. The payment on a 60 month loan for the financed amount (26095 for a Grand Marquis LS) works out to be $437.81. If instead you take the $5500 cash back, and apply it to the down payment, and finance the rest for 60 months at 10.57 %, your payments are the same, $437.81. In the case of the Mercury Grand Marquis, your not getting .9% interest, you're getting 10.57% interest. If your investments are making less than 10.57% interest, you're better off paying cash. And don't forget you have to pay income tax on the interest you earn. 
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Replying to: joesmith2 (Mar 09, 2008 9:32 am) |
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Replying to: dtownfb (Mar 09, 2008 1:06 pm) Your point about what if you can't afford to pay cash. I got on Nissans site, and it looks like a new Quest is 25,000-30,000. If you put down $3,000 on a $25,000 Quest, and your rate is 2.9%, your payments are about $410. You need comprehensive insurance on a new car, which is at least $50/mo, so thats $460. If you save $460 a month, in 2 years you've got $11,000. I got on autotrader.com, and there are plenty of Quests, from 1995 to about 1998, with 100,000 miles for $3,000. There are plenty of quests on autotrader that have 200,000 miles, so I'd guess a $3,000 Quest with 100,000 miles will probably be good for another 100,000. Its hard to save money. I heard a guy say its harder to save money than it is to quit heroin. Some heroin users can quit, buy none of them can save money. Good luck with your Quest! 
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After reading these posts, I feel compelled to make a few observations. First off, joesmith2 is a guru. There can be no denying his reason. WHOEVER DOUBTS THIS MESSIAH HAS FINANCIAL INTERESTS IN THE INDUSTRIES...Some additional benefits of driving used cars include: MY 10 COMMANDMENTS 1) LITTLE OR NO CAR WASHES--LET THE RAIN DO IT 2) NOBODY'S GONNA KEY SCRATCH MY CAR IN WALMART PARKING LOT 3) NOBODY'S GONNA STEAL MY CAR AT WALMART PARKING LOT 4) I HAVE THE EXTREME SATISFACTION KNOWING MY NEIGHBORS ARE SADDLED DOWN WITH A DEPRECIATING ASSET? THAT THEY ARE PAYING DEARLY FOR WHILE ON THEIR SECOND EXOTIC VACATION OF THE SUMMER 5) HAVING ALL THAT EXTRA CASH TO BLOW ON MY WIFE AND KIDS 6) KNOWING THAT GETTING IT FIXED IS JUST GONNA BE 1 CAR PAYMENT---NOT 60 7) I DON'T CARE WHAT PEOPLE THINK OF ME, MY FAMILY DIGS ME 8) MY CAR ALWAYS STARTS, HAS A GREAT HEATER AND GETS ME FROM A TO B THE SAME WAY AS A PORSCHE 9) I HAVE ZERO DEBT AND PAY CASH FOR EVERYTHING. I COULD EASILY AFFORD THE HOTTEST CAR, BUT WOULD PROBABLY DIE FROM EXTENDED BUYER'S REMORSE 10) FINALLY, NO ONE (EXCEPT MY WIFE MAYBE), HAS EVER MENTIONED TO ME THAT I HAVE A SHITTY CAR... |
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Replying to: joesmith2 (Mar 09, 2008 2:41 pm) Sometimes there is only the low rate though and no cash back incentive.
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Replying to: british_rover (Mar 10, 2008 6:27 am) Sometimes there is no cash, joe. And sometimes there is BOTH. In the case of the .75% interest, I got the low interest AND a huge discount on the vehicle. This was back when the manufacturers were running that "employee pricing for everyone" thing. I have the same thing on my Honda. It is leased at a rate that works out to ... I forget if its 0.9% or 1.9%, but one of those, and I got it for invoice minus the dealer cash minus some of the holdback. I'd be an idiot if I paid cash for that car. Oh, I'm sure you are all against leasing, I know. I mean, heck, if you leased, you couldn't carry a bogus insurance policy with minimal coverage. I mean, here I am paying $750 a year for a fully covered car with high limits. I'm such a schmuck. |
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Replying to: dtownfb (Mar 09, 2008 1:06 pm)
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