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He is, and he is correct (the other poster). Buying anything, that ultimately has no net worth other than scrap value, is called 'going broke slowly'. Leasing a (low-cost) car/truck is a wise utilization of resources. For the $650/month you stated, someone (foolishly) can lease a Mercedes S550... a $100K car.... I assume you must pay tax on that $650/mo, correct me if I am wrong. You will make a h*ll of a lot more money if you took the largest percentage you can swing of that 650, and invest it wisely.
A very poor way to spend money (IMHO) is to buy something that ends up with little/no value. In the end, the other poster still has all of his principal... what is the value of an old beat-up truck, compared to its purchase price?
Other than true collector-cars (like early Porsches, any of the true old muscle cars, like a Superbird, 'Cuda, A.C. Cobra, or antiques such as Packard, etc), and play cars, an automobile/truck is purely a necessary evil.
As someone who buys utilitarian vehicles only once every 15 years or so (garage queens aside), let me say "put your money to work for you... don't work for it".
Leasing a $100k car is over a $1000/month+ payment, unless you put thousands of dollars down (dumb!). Depending on state, taxes can be half as much when leasing (the case in CO). I pay tax on my monthly payment, not on the sale price.
You have do the math to see if leasing makes sense. If you put 20k+ miles on your car a year or you drive a car for 10+ years, buy it. If you were like me and financing a used/new car every 3-5 years, leasing makes a lot more sense. I've done the math and enjoy looking forward to a new car every 2-3 years. I like having the least amount of cash tied up in my vehicle. A $400/month rental is a hell of a deal at around $13/day
Leasing a $100k car is over a $1000/month+ payment, unless you put thousands of dollars down (dumb!). Depending on state, taxes can be half as much when leasing (the case in CO). I pay tax on my monthly payment, not on the sale price.
You have do the math to see if leasing makes sense. If you put 20k+ miles on your car a year or you drive a car for 10+ years, buy it. If you were like me and financing a used/new car every 3-5 years, leasing makes a lot more sense. I've done the math and enjoy looking forward to a new car every 2-3 years. I like having the least amount of cash tied up in my vehicle. A $400/month rental is a hell of a deal at around $13/day
never leased a vehicle, what does this include? repairs? the whole nine?
what is the insurance per month compared to buying?
I was able to pay this thing off 2 years and 1 month ahead of schedule and the sense of relief is exactly what everyone said it would be -- simply fantastic feeling & accomplishment. I just had to share.
Excellent, and good financial management. Keep the car a while longer and save the money that would have been going into the loan payments. They, instead of a negative cycle of debt, you can create a virtuous cycle of growing assets that will mean you won't need financing in the future for the car of your choice.
A paid off car is a great feeling. I paid my 3 year loan off in a year and a half and loved it.
Remember though, when it's time to buy your next car, that you don't always come out ahead by paying cash.
If you've got $20,000 sitting around, and you can either purchase a new car outright with it, or invest it, you may be better off financing the new vehicle and investing the $20k.
With good credit, there are plenty of promotional 0.9% and similar APRs to be had. Finance the vehicle and toss that $20,000 into some blue chip stocks and you can reasonably expect to gain a good deal more than the 0.9% you're paying in financing fees.
I was able to pay this thing off 2 years and 1 month ahead of schedule and the sense of relief is exactly what everyone said it would be -- simply fantastic feeling & accomplishment. I just had to share.
What was the interest rate on the loan? If it was less than 3%, you should have kept paying the loan and instead invested the extra money. Cheap or "almost free" money is hard to come by.
What was the interest rate on the loan? If it was less than 3%, you should have kept paying the loan and instead invested the extra money. Cheap or "almost free" money is hard to come by.
It was 2.9%. I gave that some thought but decided at the beginning of this year that I'd pay it off as quickly as possible.
A paid off car is a great feeling. I paid my 3 year loan off in a year and a half and loved it.
Remember though, when it's time to buy your next car, that you don't always come out ahead by paying cash.
If you've got $20,000 sitting around, and you can either purchase a new car outright with it, or invest it, you may be better off financing the new vehicle and investing the $20k.
With good credit, there are plenty of promotional 0.9% and similar APRs to be had. Finance the vehicle and toss that $20,000 into some blue chip stocks and you can reasonably expect to gain a good deal more than the 0.9% you're paying in financing fees.
Great point...I don't plan on visiting a car dealership for many years!
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