Car loans

[Lebowski]

A person strapped for cash can choose to stop going to bars (or some other habit) for 3 years in exchange for a modest loan on a car that's not a piece of crap and will get them reliably to their job and perhaps even give them some satisfaction in life.

That's their decision and it can be made rationally without a stone carved set of financial rules.

Right, and this is entirely consistent with my statements in this thread and elsewhere on this forum over the last 10+ years


Of course, the above example relating to a person "strapped for cash" has nothing whatsoever to do with your previous example where a perpetual payment was "negligible", I replied to that statement and I have no idea why you replied to that with the above

[r0tor]

Right, and this is entirely consistent with my statements in this thread and elsewhere on this forum over the last 10+ years

It involves them taking a loan rather then comoletely useless self sacrifice for 3 years.

[MexicoCityM3]

The person relying on the loan has less flexibility if a financial hardship falls on them.

Yes. Thus, that person will have extra motivation to not fall into financial hardship in the first place.

Cortez famously burned his boats to eliminate the option of going back to Spain when conquering Mexico. Did that motivate the Spanish? You bet.

[Lebowski]

It involves them taking a loan rather then comoletely useless self sacrifice for 3 years.

Sure. What does this have to do with the person for whom a perpetual car payment is "negligible", and how does this contradict what I've said previously ITT or elsewhere?  Or are you simply rambling just to ramble at this point?

[12,000 RPM]

You're digging deep here. I'm sure you've got a point in there somewhere, I'm not sure what it is other than taking my statements to the literal extreme and misrepresenting my opinions and personal habits as some sort of unbending rules.

I personally would never finance a toy and I don't think doing so is a very good idea. If you want to, have at it


As if "fair enough" is a ringing endorsement of consumer debt, Jesus Christ Sporty you're desperate to score a point.

I never said you made a "ringing endorsement" of anything. One post you say financing a luxury car is OK if that's what you're into, the next you're saying it's irresponsible and unacceptable under any circumstance. I'm just trying to reconcile the flip flopping.

The person relying on the loan has less flexibility if a financial hardship falls on them.

How do you figure? Say persons B and F buy $30K cars. B = bought, F = financed. All else is equal. Both lose their jobs on the same day. B is out the full $30K in their account, F is only out what they've paid on the loan up to that point. If replacing the car with something cheaper is an option then all F will be out on is the interest they've paid up to that point. If not F is still up the balance of the loan cash wise. If F is in the position where the note on the car is make or break financially, again all else is equal- neither of them should have bought the car in the first place. So where is B's heightened flexibility?

[Lebowski]

I never said you made a "ringing endorsement" of anything. One post you say financing a luxury car is OK if that's what you're into, the next you're saying it's irresponsible and unacceptable. I'm just trying to reconcile the flip flopping.

Post the quote where I said it's "irresponsible and unacceptable", please.

2 months ago I said "fair enough". I've always said I wouldn't do it and I generally don't think it's a very good idea. If you think you've caught me contradicting myself, and you clearly do, you're stretching. Plus most of what you've attributed to me is a strawman ... but hey without that you wouldn't be Strawman Sporty, would you?

Like I said, I wouldn't finance a toy and generally don't think doing so is a good idea. If you want to do it, have at it, ie if you want to do it and you've thought it through, "fair enough". There's nothing contradictory about that statement.

[MexicoCityM3]

So where is B's heightened flexibility?

Im this scenario it is actually F who has more flexibility. B, now without a job probably won't qualify for a loan. B probably HAS to sell the car to generate cash (and realize an immediate loss). F has money in the bank (that didn't go towards paying cash for the car) and now has much more flexibility to face the jobless period.

[12,000 RPM]

Post the quote where I said it's "irresponsible and unacceptable", please.

2 months ago I said "fair enough". I've always said I wouldn't do it and I generally don't think it's a very good idea. If you think you've caught me contradicting myself, and you clearly do, you're stretching. Plus most of what you've attributed to me is a strawman ... but hey without that you wouldn't be Strawman Sporty, would you?

Like I said, I wouldn't finance a toy and generally don't think doing so is a good idea. If you want to do it, have at it, ie if you want to do it and you've thought it through, "fair enough". There's nothing contradictory about that statement.

Whatever man. At one point in time you deemed it acceptable to finance a "toy" (which these are not- these are people's daily drivers) if that's what you're into, now you don't. If pointing out a contradiction is a strawman then you and I have different definitions of it.

Im this scenario it is actually F who has more flexibility. B, now without a job probably won't qualify for a loan. B probably HAS to sell the car to generate cash (and realize an immediate loss). F has money in the bank (that didn't go towards paying cash for the car) and now has much more flexibility to face the jobless period.

Well hopefully MX793 can weigh in with an explanation to demonstrate the contrary.

[Lebowski]

Re F and B you are assuming all else equal. In reality if F is like the majority of car financers he's financing so he can get more car than he can otherwise afford, lives at his means, and likely has other consumer debt. If B is like the majority of cash buyers he lives below his means, avoids consumer debt, and has substantial cash cushion. B has more flexibility because he spends less than he earns, has low fixed costs, and has cash in the bank.

No one here or elsewhere has advocated paying cash if doing so utilizes your last dollar   If that were the case, B would have bought a $10k car.

[12,000 RPM]

So in other words we are assuming the worst of F and the best of B to arrive at the conclusion you want to. What a productive exercise.

[Lebowski]

Whatever man. At one point in time you deemed it acceptable to finance a "toy" (which these are not- these are people's daily drivers) if that's what you're into, now you don't. If pointing out a contradiction is a strawman then you and I have

I'm saying I didn't contradict myself, and the only way you can argue I did is by using your usual strawman tactics, including erroneously claiming I said it was "irresponsible and unacceptable". I didn't say that, and you can't post the quote because I didn't say it.

I did say "fair enough", in an unrelated thread and iirc in somewhat different context.  Even if the context was identical, "fair enough" is hardly an endorsement of using consumer debt to buy toys and is in no way contradictory to my position that I wouldn't do so personally and generally don't think it's a good idea.

[Lebowski]

So in other words we are assuming the worst of F and the best of B to arrive at the conclusion you want to. What a productive exercise.

You can assume whatever you want, I am assuming F acts like someone who utilizes consumer debt and B acts like someone who does not.

[giant_mtb]

ALSO, the biggest problem with debt is that it is soooooo EASY to get.

People get a loan for something they "need" and then before they know it, they owe tens (sometimes hundreds) of thousands of dollars on stuff they can't sell off to pay off the debt. It's a big trap that gets lots of Americans.

That's a personal problem for people that think they need to pay for financial advice from Gordon Ramsay.

[AutobahnSHO]

That's a personal problem for people that think they need to pay for financial advice from Gordon Ramsay.

Or the thousands upon thousands of Americans who don't know who Ramsey is.

[r0tor]

Sure. What does this have to do with the person for whom a perpetual car payment is "negligible", and how does this contradict what I've said previously ITT or elsewhere?  Or are you simply rambling just to ramble at this point?

Fucktard - all decisions should be made out of s person's individual case... Different people have different reasons for doing things.

In both cases your menatilty is crap.

[Lebowski]

Fucktard - all decisions should be made out of s person's individual case... Different people have different reasons for doing things.

In both cases your menatilty is crap.

Do you think you are refuting anything I have said?

[r0tor]

Do you think you are refuting anything I have said?

Don't need to refute arrogance and ignorance, just point it out

[Lebowski]

Don't need to refute arrogance and ignorance, just point it out

Right, just keep rambling on. Whoever posts the most words wins right.

[MX793]

How do you figure? Say persons B and F buy $30K cars. B = bought, F = financed. All else is equal. Both lose their jobs on the same day. B is out the full $30K in their account, F is only out what they've paid on the loan up to that point. If replacing the car with something cheaper is an option then all F will be out on is the interest they've paid up to that point. If not F is still up the balance of the loan cash wise. If F is in the position where the note on the car is make or break financially, again all else is equal- neither of them should have bought the car in the first place. So where is B's heightened flexibility?

In case it wasn't clear by the word "rely", I'm talking about the person who HAS to take a loan and not someone who could have paid cash but chose to take a loan.

Specifically, I'm talking about the person who goes their entire adult life taking out as much auto loan as the bank will give them and using their trade as the down payment on the next, with little to no additional cash, vs the person who perhaps has to take a loan on the first or first couple of cars but gradually weans themselves off of the NEED to take a loan out and can now afford to pay cash.  If you don't think the person who put themselves in the position to be able to pay cash doesn't have considerably more flexibility than the one who is reliant on a loan to have a car because they didn't put themselves into that position, I don't know what to tell you.

As to the person who could have afforded to pay cash but took the loan and kept that cash in the bank as some additional rainy-day emergency cash because they prefer more liquidity, yeah, it's probably about a wash in terms of what to do if/when bad luck hits.  There are other benefits to paying cash if you can, but they aren't earth shattering.  For example, if you're trying to get a loan for something else (like a mortgage), the fewer debts you have, the better your credit rating; which can secure you a better interest rate.

[MrH]

Why do you guys get so worked up over Lebowski saying car loans are typically a stupid decision? I think he's factually right. Taking out a loan and buying the 4Runner was a dumb decision. Not like life destroying or anything, but I'm not sure I would do it over again. But it's what I wanted at the time, I own up to it, and move on. Not the end of the world.

You guys take it so personal. Honestly, I think it's because some of you know deep down he's right and you can't accept that maybe you haven't always made the best financial moves. Hell, Lebowski made a lot worse one buying that M3 than most of us have made.

It's just a matter of balancing your future wants against your current wants. It takes discipline to make the correct long term decisions. You guys all keep acting like everyone who takes out car loans are broke and need a car to get to work when you know damn well most loans aren't due to that.

[Gotta-Qik-C7]

Why do you guys get so worked up over Lebowski saying car loans are typically a stupid decision? I think he's factually right. Taking out a loan and buying the 4Runner was a dumb decision. Not like life destroying or anything, but I'm not sure I would do it over again. But it's what I wanted at the time, I own up to it, and move on. Not the end of the world.

You guys take it so personal. Honestly, I think it's because some of you know deep down he's right and you can't accept that maybe you haven't always made the best financial moves. Hell, Lebowski made a lot worse one buying that M3 than most of us have made.

It's just a matter of balancing your future wants against your current wants. It takes discipline to make the correct long term decisions. You guys all keep acting like everyone who takes out car loans are broke and need a car to get to work when you know damn well most loans aren't due to that.

I'm guilty even with my self set cap of 30K.........

[Lebowski]

Why do you guys get so worked up over Lebowski saying car loans are typically a stupid decision?

Because THE ARROGANCE!!!



No, I really don't know why people take such offense and resort to blatant strawman arguments about such a simple, straightforward, and logically sound position.  I imagine because deep down they know I'm correct, while in many cases have long been telling themselves otherwise.  The lies people tell themselves are often the biggest and most dangerous lies of all - "I'm borrowing money for this luxury car purchase so I can invest more" or worse "I need to saddle myself with consumer debt in order to stay motivated!"  Uh, no you're not, and really, no you don't.

[autokomppania]

This thread is funny to follow, and actually proves a point you guys made in the girls/boys etc. thread.

You american are very far from each others opinions, very polarized. You guys also enjoy understanding each others wrong.

Anyway, my 2 cents. I bought a used, 8 year-old 184 000km driven XC90 c. 20 months ago for 20 000 euros (let's not compare prices, it was a steal). I financed 100% for 5 years and used our house a collateral. I make double the median income, in the top 10% in this nation, wife makes 30% more than I do.

We've built a house and a cottage in last couple of years, we pay over 20 000€/year on loan principal, including the car loan.

I need a car for my work, last year I drove c. 30 000 km for work, I get paid 0,41€/km to cover expenses. I've calculated, that this car pays itself (principal, interest, insurance, diesel, tires etc.) in 4 years and after that, the car will still be worth c. 7 000 euros.

So far I've driven 100 000 km and only extra costs have been 350 euroa for bearings at the back.

I could have bought a used car for 5000 euroa and paid cash, but I wanted a car that is nice to drive, is safe and can carry the family and dogs when needed.

[r0tor]

Because THE ARROGANCE!!!



No, I really don't know why people take such offense and resort to blatant strawman arguments about such a simple, straightforward, and logically sound position.  I imagine because deep down they know I'm correct, while in many cases have long been telling themselves otherwise.  The lies people tell themselves are often the biggest and most dangerous lies of all - "I'm borrowing money for this luxury car purchase so I can invest more" or worse "I need to saddle myself with consumer debt in order to stay motivated!"  Uh, no you're not, and really, no you don't.

We all get the only reason you visit this forum is to get your rocks off on telling people what to do with their money - like the true trust fund baby you are... You don't need to prove it anymore.

[AutobahnSHO]

We all get the only reason you visit this forum is to get your rocks off on telling people what to do with their money - like the true trust fund baby you are... You don't need to prove it anymore.

such haterade.

[Lebowski]

We all get the only reason you visit this forum is to get your rocks off on telling people what to do with their money - like the true trust fund baby you are... You don't need to prove it anymore.

What specifically about my position ITT do you disagree with and why?

[Soup DeVille]

We all get the only reason you visit this forum is to get your rocks off on telling people what to do with their money - like the true trust fund baby you are... You don't need to prove it anymore.

Dude, you are really putting in the effort to be extra dicky.

[r0tor]

Why do you guys get so worked up over Lebowski saying car loans are typically a stupid decision? I think he's factually right. Taking out a loan and buying the 4Runner was a dumb decision. Not like life destroying or anything, but I'm not sure I would do it over again. But it's what I wanted at the time, I own up to it, and move on. Not the end of the world.

...You are seriously appologizing for a decision that produced the result you desired without any downside...

[Lebowski]

...You are seriously appologizing for a decision that produced the result you desired without any downside...

Apologizing?

[2o6]

Carspin never fails to disappoint


Anyways, I'm off to go furnish my house via RentACenter