Last post on Dec 11, 2013 at 10:08 AM
You are in the Prices Paid - Buying & Leasing Experiences
What is this discussion about?
Acura MDX, Car Buying, SUV
#12406 of 13280 Re: 2013 MDX TECH [zuluwarrior]
Dec 04, 2012 (2:30 am)
Listen zulu-warrior, maybe if you spent half the time you did writing the last post, and instead did a little Excel spreadsheet for yourself like I suggested, we wouldn't be having this debate. Let me try to make it as simple as possible. Pick the item below that you don't understand or believe:
(1) You have a $32,000 loan.
(2) You chose 3.25% rate for 72 months = $489.75 payment (assumes end of month)
(3) Acura offered 0.9% for 60 months = $545.62 payment
(4) Difference in payment = $55.87 per month
(4) In 42 months you trade, sell or crash the MDX into a tree.
(5) Your payments were $2,346 less during that time
(6) Your loan balance at the end of 42 months = $14,094
(7) Your loan balance under Acura loan would have been = $9,751
(8) Difference in loan balance is $4,343
(9) You traded $55.87/month, $2,346 total for a $4,343 higher loan balance in 42 months.
(10) Your $2,346 "savings" would have to grow by 85% to become $4,343
(11) That would be a 19.2% annual return if you had full 42 months to invest $2,346. You don't.
(12) Each $55/month would have to be invested at 38.9% to get to $4,343 in month 42.
(13) Re-read above slowly if necessary.
If steps 10-12, an internal rate of return (IRR) analysis, is confusing that's OK. Re-read #9 a few times. And tell me how you think saving $55 per month but then owing $4,343 more in 42 is a financially prudent decision? Or tell me what step above you don't agree with??
As for "Hallucinogenic money advice and what it means to me", great idea. A couple of chapter themes:
(1) Putting $100 per month in savings in 1969-1974 when I was a kid from a paper route/grocery store job that covered the first year of MBA school in 1980.
(2) Paying off student loan to cover second year, ahead of schedule.
(3) Paying off a 30 year 8% home mortgage loan (taken in 1988) in 13 years by refinancing to a lower 15 year rate and making $300 additional principal payments every month.
(4) Never having a car loan in my life.
(5) Keeping most cars for 8-10 years and 100k+ miles so that I never even think about (4).
(6) Having a responsible daughter that's happy to drive a loan-free 2005 MDX with 116,000 miles, even though it doesn't have the latest do-dads.
(7) The fun of shopping for a Cayman S, with my checkbook in hand.
(7) The far greater personal satisfaction of of being able to fund scholarships at my high school and college to honor my modest parents who taught me financial responsibility.
Oh yeah, I could write a book. But it probably won't have a chapter about "The virtues of trading cars that haven't made it to 20k miles every 3-4 years and taking out 6 year loans at higher rates to assure that you are forever stuck in perennial auto loan debt"
Seriously, you made a choice that is 100% your prerogative. I'm simply pointing out the math that I think you should have considered doing, beforehand. Your previous post suggests you really didn't get my previous attempt. Perhaps now. Or we can try again in 42 months. Enjoy your new MDX now and I'll enjoy my Cayman S in a few months. And hopefully no hard feelings either way.
#12407 of 13280 Re: 2013 MDX TECH [zuluwarrior]
Dec 04, 2012 (9:20 am)
Sorry if you took offense to my reference to "payment buyers" but my post wasn't directed solely at you. If that had been the case, I would have responded directly to you.
My intent was to support habitat1's assertion that it's unwise to accept a higher interest rate and a longer term in order to make the monthly payment acceptable. Generally speaking, trading a 2.35% interest premium for an extra 12 months is a bad idea. Less experienced buyers could benefit from habitat's implicit advice that if one can't afford the payment, he is probably better off doing something more constructive with his money than buying a car that is beyond his means.
The purpose of this forum is to share information and advice with potential car buyers. Many people apply the advice they pick up on these forums at the dealership and save money they might have given away. I'm willing to bet that for every person who takes offense to the advice given here, there are ten people who learned from it.
Finally, I disagree with habitat1 in one area. I love having a car payment. If somebody wants to give me nearly-free cash (low interest rate loan or a big rebate) that I can apply to my mortgage or investment portfolio, I take it every time (assuming I'm buying a car anyway). Heck, two of my cars are paid off and I'm thinking about refinancing them at 1.75% so that I can pick up cheap stocks after Obama drives us off the fiscal cliff...
#12408 of 13280 Re: 2013 MDX TECH [zuluwarrior]
Dec 04, 2012 (1:59 pm)
Habitat numbers do add up....
and as you said you always have to choose
The best choice is always to buy a car that you can pay cash.
Next best is to minimize the total interest paid over the life of the loan and by life I mean the time you intend to keep the loan not the maturity term.
We all come here to save few hundreds in cast of the vehicle and then spend it all in interest.
Hope you do not do this with bigger ticket items like house.
We all make mistakes/overlook things the key is to learn and move on....unless the plan is (knowingly/unknowingly) put yourself in a situation to have someone come and bail you out.
Enjoy the vehicle.
#12409 of 13280 Lease 2013 Acura MDX 36 months 12k miles/yr
Dec 04, 2012 (6:29 pm)
just concluded a lease deal for 2013 Acura MDX Base 12k term=36mo
Monthly payment inclusive tax=$485 Drive off=$1289(inclusive 1st payment, registration/DMV fees,etc)
Is this a good deal.... Thanks for your response
#12410 of 13280 Re: 2013 MDX TECH [zuluwarrior]
Dec 05, 2012 (3:37 am)
Certainly everyone has different goals when purchasing a vehicle. What fits for one person is not always a fit for another person. However, reading the postings for this purchase makes a couple of things obvious.
First, it makes little financial sense to extend a loan by twelve months while accepting a significantly higher interest rate just to save a lousy $50 a month. The ultimate fact is you saved nothing and will end up paying more due to the longer finance period.
Second, anyone who is concerned over $50 a month probably should not buy a $47,000 vehicle.
Third, this deal clearly supports the adage that payment buyers rarely achieve the best deal. You did, in fact, buy on payment. You stated you took a longer loan to avoid a higher payment. That is buying based on payment.
With this being said, if you are happy with your deal nothing else counts, I suppose.
#12411 of 13280 2012 Acura MDX Base Model
Dec 05, 2012 (11:45 am)
I am looking to buy 2012 MDX Base in Northern NJ area and looking to get an idea of prices paid so that when I walk in to the dealership, I have better understanding of pricing being offered. Also I wasn't sure if Acura offers balloon payment option given current 0.9% financing option and the last payment as balloon payment. Please share your experience if you were able to get the balloon payment option.
#12412 of 13280 2013 Tech and entertainment package
Dec 05, 2012 (12:10 pm)
$43100 including destination fee.
#12413 of 13280 Re: 2012 Acura MDX Base Model [vbosmiya]
Dec 06, 2012 (10:28 am)
Acura financial does not have a balloon payment option.
If you are interested in that, you should lease. Acura leases are always extremely attractive, have no closing/ending fees aside from mileage, and if you want to buy it out (i.e. use the residual as a balloon payment), at the end of the lease with Acura resale it will be a lower value than you could go out and buy the same 3 year old vehicle for.
Leasing is your best option, if interested in doing this.
#12414 of 13280 Acura MDX 2012 w/tech package
Dec 07, 2012 (9:06 am)
i got this deal and i am not sure to accept this or not.
Sale price: 40,300
lease : 15000Miles/year, 36 month , 578/month, o down inclusive everythin OTD. residual 24,276
Finance offer: .9% for 60 months.
please let me know if i can take this car or not. i am ok to wait another month or so if i am going to get deal.
#12415 of 13280 2013 MDX with tech
Dec 07, 2012 (12:10 pm)
is sale price 41,250 is good for 2013 MDX w/tech.