Financing Toys

[Fishindude77]

Have to share this as a stellar example of "What not to do".

Found a boat on Craigslist that I liked so went and looked at it, listed for $22,500.
Checked out the blue book on it and offered what I thought it was worth.

Dude proceeds to tell me this big sob story about how he had some medical issues, hadn't worked much, recently divorced, had to unload the Harley and now the boat. He shared that he paid over $30,000 for it at the boat show, brand new, zero down payment and financed it for 15 years. Said his payoff to the lender was more than I offered and he had no way of coming up with the difference so couldn't sell it at that price.

15 Years financing on a boat!!! Dude looked to be 50 years old and owed for another 10 years on the boat. I'm guessing his interest rate is way up there and his Harley was a similar deal too? Had a pretty nice pickup sitting there too that likely had a hefty monthly payment? House looked like it was worth maybe $50-60,000.

How stupid are people? Buying stuff they don't need, that goes down in value rapidly, with money they don't have, to impress people they don't like.

[bjl584]

He should create a profile on here and ask for some advice.

[Snydley]

My dad did the same thing. I remember it was the beginning of the end for my parents when that boat came home. My mom told him NO WAY could they afford to get it. He put nothing down on it also. I can't remember the #s but my mom said that with interest they would wind up paying double the sticker price.

He eventually sold it (after many years of using it 2-3 times a year). He had to pay to store it, to dock it, bought a trailer to pull it, and could.not.afford it.

[disneysteve]

How stupid are people?

Is that a rhetorical question?

[Retired To Win]

... How stupid are people? Buying stuff they don't need, that goes down in value rapidly, with money they don't have, to impress people they don't like.

The answer is that they are very, very stupid. "Toys" should be bought out of discretionary surplus income and in cash so that no installment loan payment gets hardwired into one's basic living expense budget. And -- of course -- before any money goes towards the toy, one should make sure that enough money is going first to the retirement fund to be able to hit one's chosen target retirement date.

[QuarterMillionMan]

It is really sad. Everyone I know whether it be in person or on Facebook "finance toys" and I know they can't afford their toys. Some are so deep in debt that they basically have no hope of getting out. One person basically said she knows she will live the rest of her life with debt and will die with debt burdening her kids with it, she is in her mid 30's and has 9 kids with another precious bundle of joy on the way. She drives new 4 x 4 trucks and SUV's.

Another person has a camper/toy hauler with moto-x bikes and when I talk with him about retirement/investments he looks at me like a deer in the headlights. He is 50.

On Facebook friends that I know post pictures of nice new cars such as a person who bought a brand new Dodge challenger which I know she cannot afford but she is happy with it, so it seems. People have so much difficulty living within their means and live their entire lives in deep debt. It is the American way of life. On a bigger scale our own government cannot reign in its own spending and keeps kicking the can down the road by getting further into debt but I digress and that is a different topic for another day. It is great to be able to converse with a community who have their financial houses in order. Cheers!

[TBH]

My tenant drives a BMW and pays me rent that is about twice my mortgage payment on the house. His credit is awful. I don't know if he owns the car or leases it, but I'm sure the payments are astronomical either way.

I drive a 12yo Corolla that we bought used for cash, shared between two adults. I'm hoping to get another 5 years out of it. We own two houses.

[Goldy]

The other common issue I see is that just because you owe 25k on something doesn't mean you are going to get it. I see this a lot where folks bought a car on an 8 year loan and it sinks in value faster than they can pay it off. Then they try to pass that hit on to the next buyer.

[Fishindude77]

The good news is, I'm picking that boat up today.
Getting a great four year old boat for under 2/3 the cost of new.

The guy worked something out with his lender to take my offer then do a personal note with him for the unpaid balance. Guess I will have to give him credit for being smart enough to get out from under it and reducing his debt substantially.

[herdjohnson]

The good news is, I'm picking that boat up today.
Getting a great four year old boat for under 2/3 the cost of new.

The guy worked something out with his lender to take my offer then do a personal note with him for the unpaid balance. Guess I will have to give him credit for being smart enough to get out from under it and reducing his debt substantially.

Nice, congrats. Heck of it is, that guy probably got an interest rate cut by doing the personal loan

[disneysteve]

The other common issue I see is that just because you owe 25k on something doesn't mean you are going to get it. I see this a lot where folks bought a car on an 8 year loan and it sinks in value faster than they can pay it off. Then they try to pass that hit on to the next buyer.

Even more common is the folks who roll over the balance on the first loan into the loan on the next car. We've seen that here numerous times. Somebody will post that they owe $37,000 on a car that's worth $20,000 because they carried over prior debt. I think it's a disgrace that the lenders allow this. I also think it's a disgrace that they offer 6 and 7 and even 8 year car loans at all.

[corn18]

I just bought a toy but didn't finance it. 1980 MGB Limited Edition, same car I drove in high school. Always wanted one again, but never had the means to get one without financing it. Got a great price and it will appreciate in value over the years. Pick it up Thursday and get to drive it home to Cincinnati from Dallas.