newbeetleman
Veteran Member
I always wondered what others do when it comes to car loan terms..
Is your 5 years? 4 years? Anyone gone longer?
just curious.
Is your 5 years? 4 years? Anyone gone longer?
just curious.
what is your car loan length
- Thread starter newbeetleman
- Start date
oilhammer
Certified Volkswagen Nut & Vendor
I pay cash. If I can't, I don't need it. 
Paying interest on something that depreciates is foolish.
Now if you can get a 0% interest car loan, it may be different. For instance, if you had the cash, but it was earning you enough money through wise investments to more than make up for any interest costs, then you'd be better off to finance the car. It just depends on how well your money is doing. Mine is doing well, even though much of it I cannot actually get to right now without some massive penalty.
Paying interest on something that depreciates is foolish.
Now if you can get a 0% interest car loan, it may be different. For instance, if you had the cash, but it was earning you enough money through wise investments to more than make up for any interest costs, then you'd be better off to finance the car. It just depends on how well your money is doing. Mine is doing well, even though much of it I cannot actually get to right now without some massive penalty.
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40X40
Experienced
I pay cash. If I can't, I don't need it.
Paying interest on something that depreciates is foolish.
Now if you can get a 0% interest car loan, it may be different. For instance, if you had the cash, but it was earning you enough money through wise investments to more than make up for any interest costs, then you'd be better off to finance the car. It just depends on how well your money is doing. Mine is doing well, even though much of it I cannot actually get to right now without some massive penalty.
This^.
You can pay interest or you can save ahead and 'pocket' the interest.
Bill
A_Shifter
Veteran Member
I financed several vehicles before I realized just how true that is.
Aero Z
Member
+1 On paying CASH only!
I made the mistake of buying a brand new car after I got my first real job when I got out of college on payments (over 4 YEARS) and hated the car everytime I mailed that payment. Sold it after 2 years after saving enough money to buy a cheaper used car (that I still have today) with cash.
If I can't pay cash for a car then I can't afford to buy it.
I made the mistake of buying a brand new car after I got my first real job when I got out of college on payments (over 4 YEARS) and hated the car everytime I mailed that payment. Sold it after 2 years after saving enough money to buy a cheaper used car (that I still have today) with cash.
If I can't pay cash for a car then I can't afford to buy it.
Abacus
That helpful B4 guy
But, but , but...it's an investment!
How many times have we heard that.
I drive the car I do because it suits me, not because I have to.
For many years I was debt free, then I needed a new roof on the house and (grossly) misjudged the cost. Now I'm working at paying it off, and the stress reminds me of when I had car payments, despite only 3.5% interest. I'm glad I don't have a car payment and would rather drive an older paid-for car than a newer one with payments.
This way I get to dictate where my money goes rather than having it done for me.
My co-worker still has 8 months left to go on his truck payment, and he's already had to have a lot of extra-out of warranty work done, which is costly. I've heard him mention a few times the extra cost and how he is strapped, and I'm once again reminded of why I choose not to have a payment.
How many times have we heard that.
I drive the car I do because it suits me, not because I have to.
For many years I was debt free, then I needed a new roof on the house and (grossly) misjudged the cost. Now I'm working at paying it off, and the stress reminds me of when I had car payments, despite only 3.5% interest. I'm glad I don't have a car payment and would rather drive an older paid-for car than a newer one with payments.
This way I get to dictate where my money goes rather than having it done for me.
My co-worker still has 8 months left to go on his truck payment, and he's already had to have a lot of extra-out of warranty work done, which is costly. I've heard him mention a few times the extra cost and how he is strapped, and I'm once again reminded of why I choose not to have a payment.
oilhammer
Certified Volkswagen Nut & Vendor
Ugh, don't remind me about the roof. I just shelled out nearly 4 grand a couple years ago for that. It is a metal one now, it'll most likely outlast me.
Abacus
That helpful B4 guy
I have a 200 year old 1.5 story farmhouse and I got quotes of $10K to $19K from the 'big boys'. I went with a local contractor who let me work as one of his crew so I could learn how to do it and he took some off the total bill, and it still came to $7,600.Ugh, don't remind me about the roof. I just shelled out nearly 4 grand a couple years ago for that. It is a metal one now, it'll most likely outlast me.
Very impressed with the work, and now I have the knowledge to do it if I have to in the future, which is priceless to me. It'll be on another house though, since this one is lifetime guaranteed and hurricane rated to 125 mph.
Payments suck.
oilhammer
Certified Volkswagen Nut & Vendor
We just purchased a 187 acre farm... complete with a century+ old farmhouse. Good thing is, the tin roof is STILL in decent condition. Even the old barns' floors are totally dusty dry, even with all the wet weather the last few weeks we've had here. Pretty amazing.
Good thing is, the tin roof is STILL in decent condition. Even the old barns' floors are totally dusty dry, even with all the wet weather the last few weeks we've had here. Pretty amazing.
Brian is it safe to assume you took out a loan for the property though?
I bought my 2000 Jetta for $4,001. When I was looking I saved up $7,000 because I figured it would need $3k in repairs. A year later I am still drawing from that extra $3k for PM because the car did not need as much work as possible. This extra cash is nice for when I don't have the time to do the work myself.
I bought my 2000 Jetta for $4,001. When I was looking I saved up $7,000 because I figured it would need $3k in repairs. A year later I am still drawing from that extra $3k for PM because the car did not need as much work as possible. This extra cash is nice for when I don't have the time to do the work myself.
oilhammer
Certified Volkswagen Nut & Vendor
The property finances are complicated, as it is an extended family endeavor, including my father and his wife, and my aunt & uncle, grandmother, and possibly another uncle in the future.
So far though, only my father and his wife and myself have done anything with the property and livestock. I've personally not paid anything out-of-pocket yet, other than for much-needed equipment PM items and what not.
But the place will be paid for within a couple years once it is all said and done. But land, especially in Missouri, does not DEpreciate, unless you overspent in the first place. Keep in mind, land works differently than a house. Which is why being a landowner is such a wise investment for the future. People around our area buying a $200k house on a 1/4 acre of land amid a subdivision full of houses that look just like theirs and being in debt to their eyeballs will never make any sense to me. But I'm glad there are people like that, so people like me can buy what we want!
So far though, only my father and his wife and myself have done anything with the property and livestock. I've personally not paid anything out-of-pocket yet, other than for much-needed equipment PM items and what not.
But the place will be paid for within a couple years once it is all said and done. But land, especially in Missouri, does not DEpreciate, unless you overspent in the first place. Keep in mind, land works differently than a house. Which is why being a landowner is such a wise investment for the future. People around our area buying a $200k house on a 1/4 acre of land amid a subdivision full of houses that look just like theirs and being in debt to their eyeballs will never make any sense to me. But I'm glad there are people like that, so people like me can buy what we want!
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newbeetleman
Veteran Member
So, I am the only idiot that has financed cars? I love the idea of paying cash just never done that before.
IndigoBlueWagon
TDIClub Enthusiast, Principal IDParts, Vendor , w/
I had a banker tell me years ago to "buy what appreciates, lease what depreciates." Of course he was selling leasing. But I've leased cars on several occasions and it's worked out well. I leased our '94 Toyota Previa because it was too bloody expensive to buy outright ($34K sticker in 1994), but the money factor in the lease was .2% and at the end of the lease term the buyout was reasonable. Bought it outright then and drove it for another 7 years. Did the same with my Audi A4. On that car the buyout was about 6K less than the car's market value because when I purchased in '96 Audi was still struggling under the sudden acceleration curse. And I've leased my '12 Golf, because (like the Audi) it's easy to track as a business expense (Market research). I'll buy that one at the end of the lease term, too.
And I actually took out a loan on my '02 wagon even though I didn't have to, because VW was offering 0.2% financing for 2 years and gave me $500 off the car to accept the financing. I made money on that one.
And I actually took out a loan on my '02 wagon even though I didn't have to, because VW was offering 0.2% financing for 2 years and gave me $500 off the car to accept the financing. I made money on that one.
While I am sure the majority of people in the US finance new cars, there comes a point when you might owe more on the car than it is actually worth. My cousin has a job making $24k a year. He bought a silverado that cost him $24k (and he did finance it). That is the definition of stupidity in my opinion. Today he is strapped for money and always having to make payments on this truck. To top it off he can only afford about $20 in gas at a time and we all know how far you can go in a silverado with $20 in the tank. My cousin is an extreme example, I will admit but is the reason I don't even want to attempt to finance a car. If I cannot afford it I won't buy it.
IBW, how much can you buy your golf for when the lease is over?
Brian, if you don't mind me asking, what general area in Missouri is your property? I always heard land North of the Missouri River was more fertile but also a bit more costly. Land South of the Missouri tends to be more rocky but can be had at a reasonable price.
IBW, how much can you buy your golf for when the lease is over?
Brian, if you don't mind me asking, what general area in Missouri is your property? I always heard land North of the Missouri River was more fertile but also a bit more costly. Land South of the Missouri tends to be more rocky but can be had at a reasonable price.
oilhammer
Certified Volkswagen Nut & Vendor
Belle, MO. And yes, you are absolutely correct: north of I-70 is fertile ag land, and expensive. South of I-70 is hilly and rocky, better for small cattle (we have 23 cows) and great for hunting, camping, hiking, rivers, etc. And it costs less.
IndigoBlueWagon
TDIClub Enthusiast, Principal IDParts, Vendor , w/
Can't recall, I think it's around 16K. 3 year lease, either 12 or 15K/year. Since I have other cars it probably won't get a ton of miles until after the lease is up or some of the other cars go away. It's always cheaper to pay cash, I believe, unless you get 0% interest. The Golf lease is more for accounting simplicity than anything else.
tdidieselbobny
Top Post Dawg
- Joined
- Apr 4, 2005
- Location
- Stafford,NY (WNY)
- TDI
- '03 Galactic Blue Jetta TDI, '15 Silk Blue Golf Sportwagen TDI
I've had loans in the past,and man it feels good to walk into bank and make that final payment. We've paid cash for the last 6 or 7 vehicles.I just junked the Camry Saturday(son's car),sold the beater Nissan pickup the week before,and paid cash for a 98 Subaru Legacy wagon(son's car,will be paying me back)......
greenskeeper
Top Post Dawg
only thing I've ever financed is my house and that will be paid of in 12 years (30yr note) if all goes according to plan.
oilhammer
Certified Volkswagen Nut & Vendor
Good for you! You know, it is encouraging to see so many postings in this thread about paying cash for things and getting stuff paid off early... just goes once again to show you TDI owners are a bit ahead of the curve, even if we are all a little eccentric.
If more Americans lived like we do, this would be a better place.
Jimbo70
Veteran Member
We've financed our last few cars. I don't see anything wrong with it as long as you don't bite off more than you can chew. The biggest mistake people make when they finance is they don't think big picture and borrow based on the monthly payment. The only good way to get a lower payment is to borrow less. Extending the term costs you money unless you have the discipline to pay more than the minimum or make more frequent payments.
When we bought the Jetta TDI I'm selling now back in 2003, we traded in a Honda Civic, financed the rest and paid the loan off in a year.
The same day we bought the Jetta, I leased a Golf TDI with the intent of buying it out at the end. I did, I financed the buyout and eventually paid it off early before selling the car.
I took the money left over from that sale and used it as a down payment on a 2006 Dakota Quad Cab, the biggest steaming pile of a vehicle I've ever owned, and financed the rest. After seven months, we paid off the small loan, took the truck and title to our local VW dealer and traded it for the '07 Passat wagon we have now. They gave us basically what we paid for the truck in trade and we financed the rest for 3 years. That loan will be paid off in November unless I decide to lump sum it early.
We are looking at buying a house later this year and we're building up a war chest for a downpayment. While I was looking forward to being debt-free in the new few months, I'd rather pay a little interest and have cash on hand in case of the unknown than empty the bank account for a depreciating and less than liquid asset.
oilhammer
Certified Volkswagen Nut & Vendor
That is very true. I'd never blow my entire savings buying a car with cash just because I could, unless I was 100% certain I'd not have any other expenses. Which, as an adult, and a parent, and a homeowner, that 100% won't ever happen. When I was a teenager living at home and keeping my wee willy winky out of trouble I had a better chance of nothing bad happening.
Well my keyboard is now covered in a combination of my mid-morning snack and my coffee.
GoFaster
Moderator at Large
LOL
My preferred loan length is zero. I've only ever bought one vehicle on payments, and I made extra payments until that thing was paid off. Didn't like having it hanging over my head.
I have some debt right now, but it's backed up by assets worth more than the debt and which pay me more than what the debt is costing and the (small) interest is tax deductible; I consider this to be a "good" debt.
My preferred loan length is zero. I've only ever bought one vehicle on payments, and I made extra payments until that thing was paid off. Didn't like having it hanging over my head.
I have some debt right now, but it's backed up by assets worth more than the debt and which pay me more than what the debt is costing and the (small) interest is tax deductible; I consider this to be a "good" debt.
No; even though i could pay cash i chose 2-3 year loans that have a much lower interest rate than a 5-6 year loan. I can take the same money that i would have dumped into the car and make more $$ investing it somewhere else. Most finical analysts will tell you the same.
That's not to say that others paying cash upfront are wrong it just depends on what makes you comfortable and your situation. I have a friend that leases both cars and gets new ones every 2-3 years which sounds crazy but when you look at his taxes it makes complete sense. As he owns a business he gets to right off both leases therefor its actually cheaper in the long run.
Runnerguy45
Veteran Member
I've bought too many cars with financing and it really set me back financially. This past year we have really worked hard to get rid of debt and I paid off two cars that we financed. When I was looking to buy because of all the miles I put on cars, I selected the JSW and figured I may as well go new because the price difference wasn't that great between new and fairly new. We had the good fortune to be able to pay for the JSW outright. In terms of negotiating you are really in the drivers seat when you don't need or want debt.
newbeetleman
Veteran Member
I have an 08 Taurus X for my wife and I really wanted to trade for an 08 Passat Wagon.. so much so that I was going to do it today, but after reading the posts in here, and thinking about it more, I decided to wait a while.. so I can pay more upfront. I have bought numerous of cars of the years, and financed them all, but with the economy like it is I need to be much more careful with money going out.
I was trying to weigh the pluses with the minuses.. Our current car only gets 20 mpg, short drives, 25 highway.. I could save roughly $850 a year on fuel along (at the current price, more if it goes up). My car has 100,000, while the passat has 40,000, so maint. costs would have been less for a while.
I decided not to do it just yet.
Joe_Meehan
Top Post Dawg
What is a car loan? I have not had one of those since the 70's.
It is kind of hard when you are building up the equity, but it sure is nice knowing you have no car payments. Put that money in the bank now rather taking out a loan and paying all that interest. I was never the first kid in school to buy a car or this or that, but I bet I was the first to own my own home and car and owe nothing for my education and had no debt.
My suggestion is to teach you kids and do so by example.
It is kind of hard when you are building up the equity, but it sure is nice knowing you have no car payments. Put that money in the bank now rather taking out a loan and paying all that interest. I was never the first kid in school to buy a car or this or that, but I bet I was the first to own my own home and car and owe nothing for my education and had no debt.
My suggestion is to teach you kids and do so by example.
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newbeetleman
Veteran Member
Capital One just gave me a rate of 3.62, I have excellent credit. Of course, I got that by doing this very thing.
That rate is making me think twice.
That rate is making me think twice.
newbeetleman
Veteran Member
keep the input coming..
Jimbo70
Veteran Member
It looks like I will be replacing my Jetta in the next week or two. I will probably end up financing some part of the purchase price. Would I prefer paying cash? Sure, but only if I had enough in reserve that I'm not wiping out our savings to do so. 3.62% isn't a bad rate. Ultimately you have to do what you are comfortable with. Plus, if you can pay the loan off early you can save on some of the interest.