Would you take out an 84-month car loan?

[bjl584]

I would take a 84 month loan only as part of a financial strategy.

I would agree only if they were offering some sort of other incentives or interest rate reduction, and I went into the deal knowing that I was going to pay it off early. Depending, it might be nice to have a lower payment for a time for cash flow reasons as well.

If someone is taking out an 84 month loan because that is the only way they can afford a car, then that is obviously not a good way to approach.

[FLA]

Still remember talking to a fellow nurse one night and she just didn't understand that even though she had been making payments monthly on her couch, a year later she still owed as much as the sale price was.

wouldn't want her doing the calculations for my IV! I cannot understand financing furniture at anything but 0% interest

as for cars, I always try to get the interest rate to be below 2% for 36 mos then pay it off sooner. After driving in horrible neighborhoods as a nurse, I now buy cheap little cars that get good gas mileage that I don't get upset if someone keys them. Since I became disabled, I was left with a 2012 Accent with 35k miles on it. It should last me a good long time, I plan to drive it until the repairs are more costly than the worth of the car. Now I have a savings fund for my next car and hope to be able to pay cash.

[amastewa93]

Don't forget that taking a 7-year loan doesn't mean you have to take 7 years to repay it.

Exactly - I have a 6-year loan that will likely be paid off in 2.5 years. If you take 7 years to pay off a car, it is likely you'll need to pull out a loan on another car once you've finally paid yours off (actually, most people only keep a car 6.5 years), starting a cycle of endless car payments haha...

[LivingAlmostLarge]

I have a four year car loan from december. It's on auto pay. I'm debating paying it off even with 2.9% i feel on the fence just to get it out of the way.

[GoodSteward]

As long as you can "afford" the monthly payments.

We were talking about this not long ago at work. It's a big joke to us at work with all the buy here, pay here places popping up with weekly payment options. People don't want a $350 a month payment, but they gladly take 70-80 a week payments. LOL

The interest at these places is somewhere in the 27-30% range. It's terrible they are allowed to even do that to people, but even more terrible people willingly do it.

I hate car payments, but sadly we put something in the range of 35k-40k miles a year on a car due to travel for work. So, even paying our van off early by a year or more will put us around 200k miles. I really don't know what is best. I feel rather stuck on this subject. If I buy higher mileage used, I'm at or over 200k miles by the time I pay it off. If I buy newer, lower mileage I'm still at or over 200k miles by the time I can pay it off. If I do happen to pay one off, it will be unlikely I could save up enough to pay cash beforeI had to replace the current one. I got another Van end of last year, but I don't know what I will do from here. I would like to avoid this rotation. Good news is I have it with a credit union at 2.59%. Stupid first world issues!

[Gailete]

We were talking about this not long ago at work. It's a big joke to us at work with all the buy here, pay here places popping up with weekly payment options. People don't want a $350 a month payment, but they gladly take 70-80 a week payments. LOL

The interest at these places is somewhere in the 27-30% range. It's terrible they are allowed to even do that to people, but even more terrible people willingly do it.

I hate car payments, but sadly we put something in the range of 35k-40k miles a year on a car due to travel for work. So, even paying our van off early by a year or more will put us around 200k miles. I really don't know what is best. I feel rather stuck on this subject. If I buy higher mileage used, I'm at or over 200k miles by the time I pay it off. If I buy newer, lower mileage I'm still at or over 200k miles by the time I can pay it off. If I do happen to pay one off, it will be unlikely I could save up enough to pay cash beforeI had to replace the current one. I got another Van end of last year, but I don't know what I will do from here. I would like to avoid this rotation. Good news is I have it with a credit union at 2.59%. Stupid first world issues!

If you are putting that many miles on your car for work, I certainly hope you are being reimbursed for those miles. My last job I got my milege reimbrused each pay and whatever hadn't been used on gas, I put into my car savings account. Over the years I got it to the point that all repairs came out of it, and I was getting to the point of being able to be saving for a new car with it as well when I got sick and that was the end of that.

If you are getting reimbursed for your mileage, are you using the reimbursement as extra pay or are you setting aside the overage from what you paid for gas? The girl at work that went bankrupt, worked to fudge her miles and used her mileage reimbursement as regular income and never saved a penny but the months leading up to her bankruptcy, she bought a new car, stacks of new clothes, etc. and then had all her finances tapped out. It was like she had this spending plan to be in a good place for her to go bankrupt. We ALL made the same amount of money, all got reimbursed the same for our mileage, A couple of the others were single so only had their income to live on, others were married with kids, and yet she who earned what we all did and had a young son at home (I had two still at home) and she got child support of around $400/month somehow couldn't get along on her salary, yet she could afford to get her car detailed at $50 a pop every couple of weeks and took her son to Red Lobster weekly because he liked it. She didn't know how the rest of us survived, especially me since we were in basically in the same shape with earnings. But between her child support and using her travel as extra income, she probably had close to $700+ extra to spend each month and still couldn't make ends meet, probably because she loved to go gambling on the weekends. Her car broke down which is how the new one came about. didn't have the money to fix it, but let's buy a new one!? When mine broke down I had money in the car account to tap and so no sweat to paying that bill and no reason to buy a new car.

If you are having to use any milage reimbursement to be spent on regular family needs, then you are most likely going to always have this same problem deciding when to get a new car. But tucking it into a car account helps you save for that future purchase, if you can do that.

[chestynuts]

Definitely No! I won't get a car loan anymore. We had before but it isn't worth it. It's like spending too much for a material thing that easily devaluates. I'll rather get a car and pay it in cash. One that does not exceeds my budget.

[Smallsteps]

There are many options like stretching out car loan financing to longer and longer terms and financing things like furniture and mattress. I seriously saw an ad four 5 year payments on furniture starting at $42 a month.
Financiers KNOW there is a much larger group of people who will pay minimums.
I personally know so many who say "oh no I will pay extra and be done with it" but after a few months settle back into the minimums.
Almost all these loans are designed for that person whom will make payments on just about anything instead of waiting to be able to afford it outright.

[GoodSteward]

If you are putting that many miles on your car for work, I certainly hope you are being reimbursed for those miles. My last job I got my milege reimbrused each pay and whatever hadn't been used on gas, I put into my car savings account. Over the years I got it to the point that all repairs came out of it, and I was getting to the point of being able to be saving for a new car with it as well when I got sick and that was the end of that.

If you are getting reimbursed for your mileage, are you using the reimbursement as extra pay or are you setting aside the overage from what you paid for gas? The girl at work that went bankrupt, worked to fudge her miles and used her mileage reimbursement as regular income and never saved a penny but the months leading up to her bankruptcy, she bought a new car, stacks of new clothes, etc. and then had all her finances tapped out. It was like she had this spending plan to be in a good place for her to go bankrupt. We ALL made the same amount of money, all got reimbursed the same for our mileage, A couple of the others were single so only had their income to live on, others were married with kids, and yet she who earned what we all did and had a young son at home (I had two still at home) and she got child support of around $400/month somehow couldn't get along on her salary, yet she could afford to get her car detailed at $50 a pop every couple of weeks and took her son to Red Lobster weekly because he liked it. She didn't know how the rest of us survived, especially me since we were in basically in the same shape with earnings. But between her child support and using her travel as extra income, she probably had close to $700+ extra to spend each month and still couldn't make ends meet, probably because she loved to go gambling on the weekends. Her car broke down which is how the new one came about. didn't have the money to fix it, but let's buy a new one!? When mine broke down I had money in the car account to tap and so no sweat to paying that bill and no reason to buy a new car.

If you are having to use any mileage reimbursement to be spent on regular family needs, then you are most likely going to always have this same problem deciding when to get a new car. But tucking it into a car account helps you save for that future purchase if you can do that.

Well, my second income that requires travel is ministry. I pastor as well as work in IT, but I'm an hour and a half away from the church and most of the members. For me to visit, it eats up miles. The only reimbursement I get is at tax time when I claim around 20k miles as a business deduction. It's worth the trade-off for me since the income allows my wife to be a stay at home mom.

[LivingAlmostLarge]

I'm very curious as to how many people I now do taxes for and see driving super nice cars. I can honestly say we make more than 99% of them and yet most have nicer cars than we do. Average is a luxury SUV, many tesla, porsche, bmw, lexus, audi, Suburban, yukon denali, or F-150, 250, 350 type truck. I wonder how people afford it when i see what they make. Sure it's a lot of money $200k but it's not an extravagent amount. Certainly not in the category of being able to buy an car worth $50-100k without blinking.

But maybe I'm too fiscally conservative. I feel really indulgent having bought my minivan for $28k. It's the most we've ever spent on a car. I mean my DH commented that we drive cars finally nicer than rental cars we usually get. And I LOVE my car. But seriously I guess it's the only way to get into these cars is the 7 year loans?

[disneysteve]

But seriously I guess it's the only way to get into these cars is the 7 year loans?

Nope. Statistically at least half of them are leases. The higher the sticker price the more likely they don’t own the car.

[msomnipotent]

I'm very curious as to how many people I now do taxes for and see driving super nice cars. I can honestly say we make more than 99% of them and yet most have nicer cars than we do. Average is a luxury SUV, many tesla, porsche, bmw, lexus, audi, Suburban, yukon denali, or F-150, 250, 350 type truck. I wonder how people afford it when i see what they make. Sure it's a lot of money $200k but it's not an extravagent amount. Certainly not in the category of being able to buy an car worth $50-100k without blinking.

But maybe I'm too fiscally conservative. I feel really indulgent having bought my minivan for $28k. It's the most we've ever spent on a car. I mean my DH commented that we drive cars finally nicer than rental cars we usually get. And I LOVE my car. But seriously I guess it's the only way to get into these cars is the 7 year loans?

If they are making $200,000 and can't come up with a healthy down payment for a luxury car, they probably need to reevaluate their budgets. Don't forget that all the 0% financing made more expensive cars available to those that usually wouldn't be able to afford them.

[greenskeeper]

Nope. Statistically at least half of them are leases. The higher the sticker price the more likely they don’t own the car.

and off-lease vehicles are probably the best value if you want a vehicle practically new.

Let the first sucker pay the depreciation through the lease payments. Then you purchase the car with a known service history and probably less than 36k miles @ practically half the cost of new.

I buy my vehicles much older and with more miles though.

[corn18]

and off-lease vehicles are probably the best value if you want a vehicle practically new.

Let the first sucker pay the depreciation through the lease payments. Then you purchase the car with a known service history and probably less than 36k miles.

I buy my vehicles much older and with more miles though.

This worked well for us. We bought a 3 year old BMW for 1/2 price coming off a 3 year lease. It had 13,000 miles on it. Perfect condition.

[disneysteve]

and off-lease vehicles are probably the best value if you want a vehicle practically new.

Let the first sucker pay the depreciation through the lease payments. Then you purchase the car with a known service history and probably less than 36k miles @ practically half the cost of new.

I buy my vehicles much older and with more miles though.

We've bought a couple that were 2-3 years old coming off of leases.

My current car was a creampuff. It was 6 years old but only had 26,000 miles. It was literally driven by a little old lady.