People need to start buying things with cash and not credit. Yes in my 20’s I did the stupid credit cycle but by 30 you should be over that and pay cash for everything except house. Cars should be paid in cash. I purposely got a 2011 Toyota for 20,650 to pay cash. I knew they last and wanted it for a long time. 12. Years later going strong. I don’t need flashy. People paying 50,000 for a car on credit are insane.
Correct. One of the best pieces of advice I got early was: “Never borrow to buy a depreciating asset” (car, for example). Especially an asset that depreciates faster than your loan will pay it off. My car dealer friend used to “roll over” people’s leftover trade-in loan balances into their new car. Guess where that leads. A larger leftover balance later.
> People paying 50,000 for a car on credit are insane. <
Truck prices are even crazier. For example, the 2023 Ford F-150 Limited is listed at $83,010. Who the heck is buying those things?
Never pay cash when you can pay with free money from other people. I have excellent credit and can almost always (harder now) find free money somewhere.
If you can afford the monthly payments and the interest rate is reasonable, don't pay cash for the $30,000 car. Instead, invest the money wisely in several low-risk investments and borrow $30,000 for the car. Once you've paid the loan off over 3-4 years, you have both the car and your $30,000 (plus whatever your investments yielded) on hand.
The key is to get an interest rate that is not much more than what your investments will yield. I did this once when my five-year car loan was 4.5% and I was getting 3% on some pretty safe investments. You're coming out ahead of the game when you factor inflation into the mix.
The same people losing their 600+ dollar a month car to repossession refuse to drive anything older than 3 years and want me to tote the note on the replacement (with a fresh repo!) and no money down.. (ya, I am not a bank, and all the ones I work with will decline you too)
when I suggest what I call a “get by car” (it’ll get you by until you can afford better) for 3K or less they scaff at me. “oh I can’t be seen in that” or “it has some rust. I can’t” or “OMG! it has over 100K on it!! its JUNK!” (ya, ok, buick 3.8 cars tend to outlive their owners. but ya, you know best!)
ya, well, I guess the city bus is better looking to you then. Have a nice day!