I am replacing my 5 year old car and buying a new one

[porkpistol]

As a side note, I don't feel it is our place to counsel the OP on whether to trade cars. That wasn't the question.

I get that the millionaire next door drives a jalopy. But this millionaire leases a Range Rover Sport and intends on getting a new one every 30 months.

Smart financial decision? Perhaps not. But I hopefully make enough smart financial decisions to help fund some indulgences.

Perhaps the OP is in a similar boat.

So much of this post is good.

Sometime reading through these forums just makes me laugh. Why question what they are doing? You don't know their situation. They aren't asking for your opinion on whether or not they can afford a car or should buy one every 5 years, 10 years, or 20 years. She is simply asking what is the best way to compare rates and people have to go off on a tangent.

[disneysteve]

Sometime reading through these forums just makes me laugh. Why question what they are doing? You don't know their situation. They aren't asking for your opinion on whether or not they can afford a car or should buy one every 5 years, 10 years, or 20 years. She is simply asking what is the best way to compare rates and people have to go off on a tangent.

I've been at this site for a long time. Very often, the question asked essentially amounts to, "Is it better for me to snort cocaine or shoot heroin?" Sorry, but I'm not about to answer that question.

"How do I get the best interest rate on a new car loan?" is not a question that should be answered without delving into the situation a lot deeper. Why are you getting a new car? Can you afford a new car? What does the rest of your financial picture look like?

Just throwing out an answer to, "Where can I get the best rate?" isn't doing the person asking the question any favors. The value in coming to a site like this is that others may point out flaws in your plan or at least show you other options and give you other things to think about before you dig yourself into a hole that's you'll be stuck in for years to come.

Far too many people come here after they've gotten themselves in trouble. It would be so much better if people came here first before making unwise financial moves so that the experienced folks here could talk them out of it.

[corn18]

I'm sure glad someone didn't just answer my simple question when I first started on SA. I would still be broke.

[~bs]

It is good to BOTH answer the question, and give them something else to consider. Some would consider that going off topic, and undesirable. But if the question has already been answered, then I see no problem with letting a conversation take its course.

.02

[TexasHusker]

Far too many people come here after they've gotten themselves in trouble. It would be so much better if people came here first before making unwise financial moves so that the experienced folks here could talk them out of it.

The "experienced folk can talk them out of it".

Hubris is a dangerous thing.

[corn18]

The "experienced folk can talk them out of it".

Hubris is a dangerous thing.

Look who's talkin'.

Nice racist tagline, BTW.

[disneysteve]

Nice racist tagline, BTW.

1. His sig line is quotes from a movie, The Jerk. Without giving the source, it certainly does come across as racist.

2. The 2nd one is incorrectly quoted. The actual line is, "See a doctor and get rid of it."

[disneysteve]

The "experienced folk can talk them out of it".

Hubris is a dangerous thing.

I don't think it's hubris. I think the collective knowledge and experience of the folks here can and has helped a lot of people over the years. It's really frustrating when someone only comes here after making an awful financial decision that any of the regulars here would have known was a bad idea. By the time they show up here, it's too late to help them. If more people would come here to ask about something they are considering doing, rather than how to deal with something they've already done, they could be saved a ton of money and aggravation.

[greenskeeper]

Nice racist tagline, BTW.

"I was born a poor black child"

[TexasHusker]

1. His sig line is quotes from a movie, The Jerk. Without giving the source, it certainly does come across as racist.

2. The 2nd one is incorrectly quoted. The actual line is, "See a doctor and get rid of it."

Thank you for pointing out #2. I'll get that corrected at my earliest opportunity.

[Captain Save]

The 3-year/10% rule is a measure of affordability. Run the numbers. If you could afford the payment within those guidelines but choose to take a longer loan due to attractive financing (especially 0%), I wouldn't argue with that. But don't use the 60 or 72 or 84-month term as a guide to what's affordable.

Explain the 3 year / 10 % rule

[Captain Save]

The last 2 times we bought used cars, the dealer still had the best financing deal. We got 2.9% both times.

not saying that "they" are right .. but the thinking is that if the dealer has a great deal on financing . .then you could have bargained a better price if you had your own loan .. or own cash.

true or BS?

[disneysteve]

Explain the 3 year / 10 % rule

I think it fits in the typical overall debt advice.

Total debt shouldn't exceed 36% of income.
Housing shouldn't exceed 28% of income.

Assuming your housing costs are in line, that leaves 10% or so for other debt, auto being the biggest for most people.

If we go with a broad budget plan like 50% needs, 30% wants, and 20% savings, you can see how this all fits together. If 25% goes to housing, 10% to car, that leaves 15% for all other needs: food, clothing, utilities, insurance, maintenance and repairs, etc. If you go off the high end and take a car loan that is 15 or 20 or 25% of income, you're going to have to cut into another area of the budget. Unfortunately, most people sacrifice the savings piece to get that shiny new car that they just have to have.

As for why 3 years? I think that is to keep people from fudging the numbers by extending the term to make the math work on a car that they really have no business buying. It is very telling (and disturbing) that car loans have grown to 6 and 7 years in recent years. Why? Because that's the only way people can get the car they really want and still be able to afford the payment.

[disneysteve]

not saying that "they" are right .. but the thinking is that if the dealer has a great deal on financing . .then you could have bargained a better price if you had your own loan .. or own cash.

true or BS?

I don't know. Never have I discussed how I was paying for or financing a car until after we had agreed on the price. I don't know how it would have made any difference.

[Cristen Wyght]

Thanks for all the input. I am keeping my options open to both bank and credit union auto loans. But, I began to think again because I know how fast a car's value depreciates. I have the resources but after reading everything, it seems that a vehicle is not really a good investment after all.