[Donatello.]

Originally Posted by Vindicator3

I'm old school I'm sure but if anyone were to ask me I would advise them never to borrow money to buy a depreciating asset like a car (rare investment cars aside).

My approach has always been to buy the car I can afford (favoring reliability, maintenance costs, and gas mileage first, then the fun factor) with cash, and then make car payments to myself thereafter to build up, with accrued interest, the pot of money to buy the next car. Recognizing as a part of this that the most economically sensible way to buy a car (unusual circumstances excepted) is to buy a 3-year old non-luxury car (with good reliability and good mileage) and drive it until the wheels fall off, then repeat, considering any variation from this as a luxury (that is, buying new instead of used, buying luxury instead of economy, selling before the wheels fall off, etc.) in which I can choose to indulge or not as my economic circumstances allow.

That meant I was driving a Civic or a TSX (with a growing pot of money in the bank to replace them) while others my age were driving newer or fancier cars (with no pot of money and lease or loan obligations instead), but it also meant that I was protected from economic shocks (no risk of losing my job and owing $20k on a car for example), and it also meant I spent less overall on transportation.

The advantage of this approach certainly decreased during that weird 10-15 year period when interest rates were essentially zero, but now that we're back to a normal interest rate environment the advantage is more obvious.

YMMV, of course, but that's what works for me. Buy with cash; if you can't afford to buy the car you want that way either wait until you can or buy a cheaper car; save up monthly for the next car; repeat.

And if you're just starting out and can't even buy a 10 or 15 year old Civic without a loan, then buy that 10-15 year old Civic (nothing newer, fancier, or more expensive), borrow the least amount possible to do so, and pay it off as quickly as possible, then try to make that Civic (or Corolla or whatever - but something cheap to acquire, bulletproof, and cheap to fix) last long enough to at least buy the next car with cash, even if the next car is a 5-year old Civic. Living within your means comes with much less risk and expense than living a leveraged existence, even if the leveraged life will "pay off" for some who never suffer an economic setback along the way. May we all be so fortunate.

The problem is most Americans don't make enough $ to be able to do that AND pay for all the normal bills most of us do AND also save a bunch monthly AND invest in retirement fund.

[Vindicator3]

Originally Posted by Donatello.

The problem is most Americans don't make enough $ to be able to do that AND pay for all the normal bills most of us do AND also save a bunch monthly AND invest in retirement fund.

I don't disagree. IMO those Americans who can't afford even a 10 year old Civic without borrowing should go ahead and borrow to make sure they get a quality car, but should not buy anything fancier or newer than a 10-year old Civic or Corolla until they can afford to do so without borrowing. If they borrow to buy something more expensive than that, they are contributing to their financial woes rather than solving them. IMO, of course.

(This assumes no actual need for something more expensive like a truck because of their work or a 4WD because of the climate, etc.)

[Donatello.]

Originally Posted by Efthreeoh

That's the beauty of it, if we consumers stop buying, the market eventually corrects itself. We want more diversity in the auto market, not less. More regulation kills diversity.

Sadly, most people are idiots & buyers of boring cars.

Also, these videos seem staged. Shocker

[MaxVO2]

Originally Posted by Donatello.

Sadly, most people are idiots & buyers of boring cars.

****We have staff here at our office that are *way* underwater on their automobile loans. They generally have champagne tastes but are on a beer budget or tap water budget.

One financially not so savvy gal just *had* to have a Mercedes Benz (she just graduated from college, has loans, etc..) but doesn't make Benz money so she ends up with the cheapest Benz car she can afford, with 72 months of payments on a car with a crazy high interest rate as she is a bad credit risk (550 ish FICO or so..).

She's happy with her car as it is new but she is *way* underwater on the loan she took out, and thanks to doing well business wise - our firm is doling out bonuses/profit sharing, etc.. for most everyone including her. She wants to now trade her car in for a higher series model Benz, while still being able to afford the monthly payments.... The dealership is working the deal now and she will roll the debt into her new car, plus add in all of her bonus money to make the payment and deal work out.

Crazy. She has big plans - wants a house, a pure bred dog with AKC papers, nicer purses, shoes, etc.. Just wow.

At least she will have a nicer car soon.... Her salesman is an absolute genius... He told her the cloth seats in her new Benz car are cloth because they are "Vegan Friendly Materials" Just WOW... SOLD!!!

[bvrider1]

First off , that time and energy you put into this girl and trying to break down her motives, interesting.....

Then I got to the end, then something in my head pops up.

Are you the Sales Guy!!!

Nice job! LOL

Originally Posted by MaxVO2

****We have staff here at our office that are *way* underwater on their automobile loans. They generally have champagne tastes but are on a beer budget or tap water budget.

One financially not so savvy gal just *had* to have a Mercedes Benz (she just graduated from college, has loans, etc..) but doesn't make Benz money so she ends up with the cheapest Benz car she can afford, with 72 months of payments on a car with a crazy high interest rate as she is a bad credit risk (550 ish FICO or so..).

She's happy with her car as it is new but she is *way* underwater on the loan she took out, and thanks to doing well business wise - our firm is doling out bonuses/profit sharing, etc.. for most everyone including her. She wants to now trade her car in for a higher series model Benz, while still being able to afford the monthly payments.... The dealership is working the deal now and she will roll the debt into her new car, plus add in all of her bonus money to make the payment and deal work out.

Crazy. She has big plans - wants a house, a pure bred dog with AKC papers, nicer purses, shoes, etc.. Just wow.

At least she will have a nicer car soon.... Her salesman is an absolute genius... He told her the cloth seats in her new Benz car are cloth because they are "Vegan Friendly Materials" Just WOW... SOLD!!!

[MaxVO2]

Originally Posted by bvrider1

First off , that time and energy you put into this girl and trying to break down her motives, interesting.....

Then I got to the end, then something in my head pops up.

Are you the Sales Guy!!!

Nice job! LOL

***LOL! No, I'm not the sales guy, just the guy who signs her paycheck, and has had to confirm her income range for a loan she was applying for. She's chatty and is a bit of an over-sharer.

Nice gal.

"Vegan Friendly Materials". That salesperson is going places...

I now imagine that salesperson speaking like Ricardo Montalban and saying "Rich Corinthian Leather!"....

Hilarious to me.

[Donatello.]

Originally Posted by MaxVO2

****We have staff here at our office that are *way* underwater on their automobile loans. They generally have champagne tastes but are on a beer budget or tap water budget.

One financially not so savvy gal just *had* to have a Mercedes Benz (she just graduated from college, has loans, etc..) but doesn't make Benz money so she ends up with the cheapest Benz car she can afford, with 72 months of payments on a car with a crazy high interest rate as she is a bad credit risk (550 ish FICO or so..).

She's happy with her car as it is new but she is *way* underwater on the loan she took out, and thanks to doing well business wise - our firm is doling out bonuses/profit sharing, etc.. for most everyone including her. She wants to now trade her car in for a higher series model Benz, while still being able to afford the monthly payments.... The dealership is working the deal now and she will roll the debt into her new car, plus add in all of her bonus money to make the payment and deal work out.

Crazy. She has big plans - wants a house, a pure bred dog with AKC papers, nicer purses, shoes, etc.. Just wow.

At least she will have a nicer car soon.... Her salesman is an absolute genius... He told her the cloth seats in her new Benz car are cloth because they are "Vegan Friendly Materials" Just WOW... SOLD!!!

Her future BFs/husband(s) will be thrilled. Thank God my wife is not a moron.

I wanted to get a RSQ5, but she didn't want to spend the money. Can't blame her. The Mazda is great for what it is, but car guys gonna always want mo powa!

Also, your last line shows why no one trusts car salesmen. You've done it to yourselves.

[MaxVO2]

Originally Posted by Donatello.

Her future BFs/husband(s) will be thrilled. Thank God my wife is not a moron.


Also, your last line shows why no one trusts car salesmen. You've done it to yourselves.

****Smart people do not trust car salesmen. It is remarkable to me how many financially inept people still shop for a car based on a monthly payment vs price and spend hours trying to make something they have convinced themselves they absolutely *need* to work out - even if it is financially ruinous.

I have staff who are college educated, from good Universities, and seemingly very bright - who fall for remarkably inane and frankly laughable reasons for buying a car and other things they really cannot afford due to the skill of an astute salesperson.

Rolling debt repeatedly into newer and newer purchases just compounds the problem to the point where getting out of debt becomes next to impossible. Delayed gratification and living within ones means seems almost quaint at this point for many people, and I can see the genius in being the organization that lends money to people who really can't afford something but really really want it anyway.

The woman in question who absolutely has to have a Benz even though she cannot really afford it is in some respects the type of person who keeps our consumer economy humming along nicely.

I kind of feel sorry for her future husband, and I hope he makes lots and lots of money and has an ironclad Pre-nup. That fellow is going to have his hands full...