How much do you spend on Payments??

[Lebowski]

Big difference between financing a civic and financing an M5 or something. One is basic transportation, the other is a luxury ... I wouldn't use debt to buy something like that I don't care what the rate is.

[GoCougs]

Paid cash for the 2011 G37x sedan (bought 1 year old) and paid cash for the 2005 Accord too (bought new). Prior, I owned plenty of cheap crappy cars. In hindsight I should've just bought the newest Civic/Corolla I could with the cash I had at the time. Even so, the solace of paying cash for whatever I can afford >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> the solace of having payments on a newer/nicer/fancier/faster/etc. car that I couldn't.

[Xer0]

Big difference between financing a civic and financing an M5 or something. One is basic transportation, the other is a luxury ... I wouldn't use debt to buy something like that I don't care what the rate is.

An M5 is a luxury to me (actually, the Civic is a luxury heh) but to someone else it could be chump change.  If the bank were willing to offer that dude a 115k loan at 0% for his M5, more power to him.  I'm not saying you personally should go into debt, I'm just saying I can easily see how it's not a bad idea. 

[Lebowski]

An M5 is a luxury to me (actually, the Civic is a luxury heh) but to someone else it could be chump change.  If the bank were willing to offer that dude a 115k loan at 0% for his M5, more power to him.  I'm not saying you personally should go into debt, I'm just saying I can easily see how it's not a bad idea. 

First off there's pretty much no such thing as a true 0% auto loan.

Secondly 99.9% of the time the "but I can get a higher return elsewhere" argument is a red herring (on a risk adjusted, equal duration, after tax basis you probably can't, and don't even bring the argument up if you don't have the disposable cash burning a hole in your pocket, which most who use this argument do not IME)

Thirdly - even if you could make a marginally higher risk adjusted after tax return (unlikely), if $115k is chump change to a given individual, what does that make the measly extra $700 they could earn off that capital?  <1% (current ST rates) of chump change is now meaningful?

Bottom line most people finance so they can drive a nicer car than they can afford. If it truly is chump change, that's all the more reason to just pay cash.  People who justify borrowing on the basis that the amount is chump change to them are probably pretending to be more successful than they really are.

[AutobahnSHO]

Bottom line most people finance so they can drive a nicer car than they can afford.

Totally agree- with one caveat. Some dummies finance so they can drive more carS than they can afford.

We have a friend who "bought" a new car every 3 years when the full warranty ran out. They were usually upside down so they just rolled the old payments into the new payment. They were like $20k upside down 3-5cars later. This was  before we financed our first car (the Sienna) and they asked how we could afford to have TWO cars.

Well, we had paid $2500cash for the Subie and 3 years before had paid $4500 cash for a 7yr old Caravan.

So now they have a beater for him to drive to work and bought a 3yr old car (with extended warranty ) at Carmax for the "family car". They're still in debt but not so much, and he can drive to work without her being stuck at the house.

[Xer0]

First off there's pretty much no such thing as a true 0% auto loan.

Secondly 99.9% of the time the "but I can get a higher return elsewhere" argument is a red herring (on a risk adjusted, equal duration, after tax basis you probably can't, and don't even bring the argument up if you don't have the disposable cash burning a hole in your pocket, which most who use this argument do not IME)

Thirdly - even if you could make a marginally higher risk adjusted after tax return (unlikely), if $115k is chump change to a given individual, what does that make the measly extra $700 they could earn off that capital?  <1% (current ST rates) of chump change is now meaningful?

Bottom line most people finance so they can drive a nicer car than they can afford. If it truly is chump change, that's all the more reason to just pay cash.  People who justify borrowing on the basis that the amount is chump change to them are probably pretending to be more successful than they really are.

I don't care for the stupid 'I could get a higher return here' argument because at best the return is marginal which when looked at time wasted and other expenses is probably a loss.  It's a dumb argument and one I have no intention of making.

My point is that there are various degrees of stupid to smart financing decisions.  It's just another way of buying something at the end of the day and people will make that decision if they can afford it or not.  Besides, ive found out that no mater how aggressively you finance something, it will eventually catch up to you.

[Byteme]

Not counting gas and insurance, and DON'T ANSWER if it seems too personal, how much do you pay?

The last car I financed I bought in 1995 and paid it off in 1997, so no car payments since then.  The last ten cars and trucks I've bought, both new and used, have been cash deals.

[Northlands]

I've only had to make payments on one of my cars and I don't think I will do so again. It's been years and years and I enjoy only having a mortgage to pay. Any other cars have been cash.

[Speed_Racer]

$280/mo at 2.1% on the Kizashi. It's a 5-yr term but I expect to pay it off in 3. I paid cash for the moto (I don't believe in financing toys).

I used to be afraid of having a car payment, until I realized I was losing sleep worrying about unexpected (and expensive) repairs for my used car. I have a lot more peace of mind now I have a reliable car, bought within my budget and knowing it would be the last car I will buy for at least the next 10 years.

[TurboDan]

Thing is, I see young people at work buying brand-new cars. It just doesn't make sense to sink into that much payment, especially when their salaries are half what I make. Sure Soldiers have the most guaranteed job security in the world (for now), but who knows what life will bring 5yrs down the road??? 

When I was in the 18-22 age group, the dudes I knew with the hottest cars were always the ones in the military.

It gets "worse" (well, for those of us who are jealous) in the academies. A guy I knew got into Annapolis and his parents bought him an M3 because they didn't have to pay for college. Excellent (yeah, right) decision giving an 18 y/o an M3, but to his credit, he babied it and still has it like 8 years later in perfect condition.

[TurboDan]

If you can get good financing I see no problem with a car loan.

I agree. Last year when I was searching for a low-mileage luxury car or SUV, my intent was to purchase it in cash. But my credit union dangled a 0.75% auto loan in front of me on a special promotion (valid for two weeks, one of which was when I bought my car) and I went for it. I took out three years, and they only make a few hundred bucks off me. I put about 50% down.

Paying for a car in cash is always a nice hit, and in my opinion, not worth it when the alternative is an ultra-low interest rate. The money I would have blown all at once could be better "spent" being invested (which I did, in a nice Janus fund that is doing well) so at least I can get a return on it while maintaining the monthly payments, which are in the high $200s range.

The payment is deducted from a car-specific account that I opened, and I direct deposit the exact amount of the loan plus $100/month into it (for a repair fund). After year number one, I haven't had any repairs, so I took half the bill for my set of 4 new tires out of that account.

[dazzleman]

$280/mo at 2.1% on the Kizashi. It's a 5-yr term but I expect to pay it off in 3. I paid cash for the moto (I don't believe in financing toys).

I used to be afraid of having a car payment, until I realized I was losing sleep worrying about unexpected (and expensive) repairs for my used car. I have a lot more peace of mind now I have a reliable car, bought within my budget and knowing it would be the last car I will buy for at least the next 10 years.

I think under certain circumstances a car loan is a good idea.  For people who need a reliable car to get to work, it can be a lot better to have that constant car payment than unpredictable frequent repairs on a clunker that you can buy for cash.  But the problem is that most people abuse financing and use it to buy cars they can't really afford.

[Mustangfan2003]

I spend 0.  I'm not getting a new one unless I cam pay 10k down to keep the payment pretty low.

[Autobahn]

EUR 0. Never had a car payment.

Bought the 5er wagon with cash but used. The A-Class we had before was kind of becomming crappy (14 years old) and falling apart after it got rammed some time ago by a fire truck when parked  and the aftermaths began to show. So we wanted a nice secure family hauler, especially with the newborn.

I didn't think I would ever have car payments - I'm just too conservative with money - however I might have one soon, as I am changing jobs and my new employer will be Daimler - and the employee leasing deals are rather tempting (drive the car for a year - then get the next one...). And I can't show up at Daimler HQ with a 5er - can't I?   

[Mustangfan2003]

EUR 0. Never had a car payment.

Bought the 5er wagon with cash but used. The A-Class we had before was kind of becomming crappy (14 years old) and falling apart after it got rammed some time ago by a fire truck when parked  and the aftermaths began to show. So we wanted a nice secure family hauler, especially with the newborn.

I didn't think I would ever have car payments - I'm just too conservative with money - however I might have one soon, as I am changing jobs and my new employer will be Daimler - and the employee leasing deals are rather tempting (drive the car for a year - then get the next one...). And I can't show up at Daimler HQ with a 5er - can't I?   

You should show up in a Chrysler Crossfire. 

[BimmerM3]

When I bought the Accord 9 years ago, I borrowed $1800 from Dad (in addition to $3200 I had saved and ~$5000 he put in). I gave him $100/month until it was paid off. No payments since then.

Next car will either be paid completely in cash, or with a fairly small loan (like MrH did with the BRZ). I'm definitely leaning towards cash since it'll be a used car and rates are not as good.

[MX793]

All of my cars have been bought cash.  I will continue to do so as long as I am financially able.

[AutobahnSHO]

You should show up in a Chrysler Crossfire. 

Backseat??

Not a good family car anyway. And by Euro standards = junk.

[Rupert]

The joke was that the Crossfire is basically a Daimler-Chrysler car and based very closely on some Benz. And it failed.

[Mustangfan2003]

The joke was that the Crossfire is basically a Daimler-Chrysler car and based very closely on some Benz. And it failed.

Thanks for clearing that up I was about to point that out 

[AutobahnSHO]

The joke was that the Crossfire is basically a Daimler-Chrysler car and based very closely on some Benz. And it failed.

Joke was a'right, except for the lack of funny. 

Actually driving that car to work there actually would be hilarious- Euro car nuts get all kinds of worked up over American cars like we do rare Euro ones.

[Autobahn]

Joke was a'right, except for the lack of funny. 

Actually driving that car to work there actually would be hilarious- Euro car nuts get all kinds of worked up over American cars like we do rare Euro ones.

Yes, it would be funny, however in this case I'd prefer the r170 SLK on which the Crossfire was based. The crossfire would definitely get more attention though. A coworker at my current job has a Chrysler Vision. That thing gets way more looks than the various Porsches and Maseratis in the parking garage.

However with AFRICOM and EUCOM both about 5 km away from where I live, I see my fair share of American cars.

[AutobahnSHO]

Yes, it would be funny, however in this case I'd prefer the r170 SLK on which the Crossfire was based. The crossfire would definitely get more attention though. A coworker at my current job has a Chrysler Vision. That thing gets way more looks than the various Porsches and Maseratis in the parking garage.

However with AFRICOM and EUCOM both about 5 km away from where I live, I see my fair share of American cars.

I Loved going out on trainin missions where we had to go east or up north. Where we lived/worked (Mannheim/ Heidelberg/ Kaiserslautern/ Frankfurt am Main) there were always Americans around.  But when we drove Humvees way up past Koln or east of there, people GAWKED and POINTED...