How much is your car payment?

[Ben]

Zero

 

[Big Bad Allis]

You're slightly missing the point Jacob.

Just like house payments, one cannot judge anything simply by seeing a monthly payment amount. It's entirely possible that a person paying $450/mo is paying more for the same truck than another person who's paying $900/mo for it.

Too many variables such as downpayment/trade in, apr, length of term, deal on the truck itself, come into play.

At the end of the day a $900/mo payment is only 'a lot' if it's beyond the means of a person ... for some folks, a $300/mo payment could easily evoke the same gasping if that is a lot relative to their income/wealth. ($900/mo to a person with a $250K a year income is obviously relatively less that $300/mo to a $30K a year income). I promise you that there are a lot more folks in the latter category than the former ... but their gaspworthiness is less evident.

Exactly! My $904 payment is a no brainier. I could pay cash too. At 0% it doesn't make sense to use my money for almost a 60K vehicle. My accountant backed it up with showing benefit at the end of the year for a vehicle I needed anyways. Of course I didn't need a Denali but I wanted that package because it's nice to have. I think the value I get for the $904 payment is fine. It was almost $1800 for the additional warranty and $800 for the Blizzaks added to the total which I also received the 0%.

 

[RydnDrty]

$770/ month for 72 months...gotta refi in a coupleof months...trying to build my credit back up...

 

[soulsea]

Also, for the sake of bean counting ...

A $0/mo payment because someone paid up front for their ride doesn't mean that a person pays $0/mo for their truck.

Let's say hypothetically that I paid $40K cash for the HyHoe a year and three months ago, and I sold her for $34k. Although I had no payments to make, $6000/15mo = $400, which was my de facto monthly purchase cost towards the truck, but the only difference is that I paid all those payments up front.

Interest was still being earned through the investment of that $6000 by whomever received it, and paid by me in the form of me not earning interest on that money.

This is to again emphasize how even a $0/mo payment on its own, really is no indicator as to real cost, but is confined to cash flow considerations.

Time for coffee ...

 

[felixgun]

Lol. Alright serge geez!!!!

 

[Denali0229]

I understand what Serge is saying. The monthly payment is not an indicator of what the car costs. Down payment, interest rate, loan term, etc. is the real indicator. Someone with a $300 payment versus a $900 payment can get the same car in theory with the right down payment, interest rate and loan term. I think it all depends on your threshold to take on debt and monthly payments. My threshold was $500. But when I started looking, I thought it was $300-350 Somehow it ballooned to $500 by the time I got to the closing table I personally don't want to take on a lot of debt.

 

[soulsea]

Lol. Alright serge geez!!!!

 

[Peaches]

Here's a good example of living beyond your means. Recently an acquaintance decided to purchase a new Sierra. Sticker was $45,000 or something to that effect. They traded in their existing truck (which wasn't old or paid off), reducing the price to $38,000 after existing rebates. Monthly payment is $560 a month for 78, but possibly more months and 6%.

Annual income? $23,000.


We're all hedging our bets on when they'll file bankruptcy.

 

[Denali0229]

Just an FYI, for those of you getting 0% interest, that is definitely the right thing to do. For example, say you have $50,000 cash to spend on a vehicle. You can finance the truck at 0% for 60 months and pay $833/month and take say $45,000 (put the rest in reserves) and invest in a CD or bond that pays say 2-3%. Say you got 2.5%, at the end of five years you will have $50,913, or $5,913 more than you started with (assuming no financing or bank fees). That will buy you a nice supercharger! If you pay cash for the truck, you will slowly recouple that investment by not paying a monthly payment. But a dollar is worth more today than it is tomorrow so it's better to have the cash and invest today. Sorry, I majored in Finance and crunch numbers all day at work. But it's just something to think about if you are fortunate enough to get an offer for 0% interest. I wish I did!

 

[07Burb]

Well, this convo has suddenly turned popcorn worthy overnight