first loan in 23 years

[disneysteve]

$26,500 loan at 1.9% for 60 months is only $1300 in interest (for example purposes).

True. And my partner's BMW 5 series at over $50,000 would be about double that (if he would actually buy one instead of leasing ).

I also know many people who roll an old loan into a new loan so that they're borrowing more than the cost of the car each time. A lot of folks are also opting for 6 and 7 year car loans today which further elevates the cost of financing, especially when they don't qualify for those super low rates and are instead paying 3 or 4% or more.

[feh]

Congratulations on your new purchase. What kind of car are you buying?

Impreza. Drove it home last night.

Got the best prices from all the dealerships within 100 miles, so the drive home was 90 minutes, but it was worth the savings.

[corn18]

I also know many people who roll an old loan into a new loan so that they're borrowing more than the cost of the car each time. A lot of folks are also opting for 6 and 7 year car loans today which further elevates the cost of financing, especially when they don't qualify for those super low rates and are instead paying 3 or 4% or more.

This was me before I was fixed by SavingsAdvice. I was upside down on the trade, rolled it into the new loan at the longest payment schedule possible so I could buy a car I could not afford. Life is much better now.

[disneysteve]

This was me before I was fixed by SavingsAdvice. I was upside down on the trade, rolled it into the new loan at the longest payment schedule possible so I could buy a car I could not afford. Life is much better now.

Welcome to the minority!

From Edmunds.com from March 2015:
Edmunds data tells the story: Since 2002, the average car loan term has slowly crept past five years, and is now inching past six-and-a-half years. In 2014, 62 percent of the auto loans were for terms over 60 months. And nearly 20 percent of the loans were for 73- to 84-month terms.

[autoxer]

I was prepared to buy my car with cash, until the dealership talked me into financing (so they could get their kickback from the bank). I figured the rate was so low, why not. Then a couple months later I started getting letters from the financing company that I needed to reduce my insurance deductible to meet their loan standards, so I promptly paid off the loan. Wasn't worth the trouble in the end.

[Jluke]

I was prepared to buy my car with cash, until the dealership talked me into financing (so they could get their kickback from the bank). I figured the rate was so low, why not. Then a couple months later I started getting letters from the financing company that I needed to reduce my insurance deductible to meet their loan standards, so I promptly paid off the loan. Wasn't worth the trouble in the end.

b/c you financed 100% and/or the car depreciated quicker than the loan balance decreased?

[GoodSteward]

What do you base this assertion on? I negotiated the car I bought this year as a cash deal. Got a final price agreed to and was writing the check. I asked about financing and they said if I financed, I would get an additional $750 off the price of the car. I financed it with 75% down and paid the loan off the same day the letter came in the mail with the first payment due. Cost me $13 interest.

So, my data point of one indicate that the cash price was higher than the finance price.

Tom

How much did the financing fee, paperwork, etc cost you to go that route vs cash only? I assume the amount borrowed was more than the out the door price before you decided to finance? I don't think they finance for free.

[corn18]

How much did the financing fee, paperwork, etc cost you to go that route vs cash only? I assume the amount borrowed was more than the out the door price before you decided to finance? I don't think they finance for free.

No additional fees to finance vs. cash. Deal was made at $30k cash. Was writing the check when I asked about financing. Then I financed $29,250. So if there were any fees, I didn't pay them.

[autoxer]

b/c you financed 100% and/or the car depreciated quicker than the loan balance decreased?

No, It was just part of their insurance mandates, the same way they require you to have collision and comprehensive coverage, they put a maximum on the deductible to be $500 or less. I raised my deductible to $1k, to lower my premium and they didn't like that.

[greenskeeper]

just read today that the average new car is $34,264 financed an average length of 69 months at a payment of $503/month

what a tremendous waste of wealth building opportunity

[LivingAlmostLarge]

For me I HATE car shopping even used. I wish someone would just hand me the car and I drive it. It's why I keep my cars. I hate looking, test driving, and figuring it out. It's annoying. I am considering buying the same car in 10 years because then it'll be the same. But of course i realize it's not the same car so maybe I shouldn't be so rash.