Sonic Loan Roll Call

[Scot]

Inflation, my friend. Combine that with how much standard equipment cars come with nowadays, and I would say that cars are just as cheap or cheaper. Now, wage stagnation is another thing

Trust me, I know - the government and its regulations for new cars keep me gainfully employed!

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[Scot]

I just want to let the guys/gals who may not be in the position to pay cash know that paying cash is not always the best way to go.

If you've been responsible with your credit and would qualify for very low or even zero percent financing, and have your money in an interest bearing account, you could actually make money on your money by making payments rather than giving it all to Chevy.

Simple example is: you are awesome and qualified for 0% (yay!) financing and have an interest bearing checking account with that money you were going to pay for your car with, you will earn interest on that money by making payments rather than giving it to Chevy all at once.

One thing to think of - and it is sorta backwards thinking - is that while, yes, if you can get a 0% loan and keep the cash earning money while you make the payments is this: I have not found an investment (while keeping the money available for an emergency) that even comes close to keeping up with - let alone - outpacing inflation. So, in my mind, it is a moot point (for me).

There's another great way to think about doing it the way you mention, though - if you have that big lump sum sitting in your account, paying monthly on the 0% loan: You'll have that money as an emergency fund, should the sh!t hit the fan in your life. Definitely a good way to go as well.

But...

At this point in my life, I am fortunate enough to be in the position where if I want something "big", I make a plan and start saving ahead of time. I'm this way from plenty of bad experiences having two car payments, a mortgage, student loans and credit card debt. Living paycheck-to-paycheck, not saving - not being able to save!

Over the years, and losing most of what I owned between two failed marriages, I know credit is a necessary evil to live in today's world. Many people in this forum needed a dependable car that got good fuel economy because of their job or school or life.


So, short story long - I'm terrified of getting money on credit, and I'm lucky enough to be able to save for big purchases before I need them.

 

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[Scot]

 

[Preloader]

A coworker gave me the whole Ramsey series on a flash drive last year in January. In one year I totally flipped my finances around. And learned a new way of looking at credit, and how "credit scores" mean nothing when you don't need or use credit. People actually end up in more debt trying to raise their credit score, and it's not their fault. That is what the environment trains you to do from the day you get your first paycheck.

People don't ask "can I afford that?" anymore. They ask "can I afford the payments?"

I could get laid off tomorrow and continue to pay my bills for 6 months without income. I'd like to get that up to 12 months.

It's very empowering to be able to go to work because you want to, not because you have to. I don't have to kiss anyone's ass.

 

[$ub$onic]

I ask my self both questions before buying something big,

I look at the whole price, yah or nah, then I look at the loan length options and see what payment is best

 

[Preloader]

Just because you can afford $150/month payments for a $100,000 car doesn't mean you can afford $100,000 car.

Honestly, if I knew what I know now, I would not have gotten the Sonic on loan. I should have put the money away weekly and bought it out right. You can buy a $20k car with $18k when you pay in cash. Plus, you don't have to make payments.

Now between my car note and my insurance, I HAVE to shell out at least $475 a month. If instead I was putting away $450/month to save up for a car, I would have the option to skip a month if I had some unexpected priorities.

The only place I feel ok with taking on a loan in the future is for a house. But even then, if I plan it right I may not have to.

 

[$ub$onic]

Same applys to houses, I see so any people buy a house they really can't afford,

My sonic insurance is $95 ish, I'm pretty happy with that.

 

[Preloader]

Mine is $75/month and that covers my 89 Dodge Colt as well. It's cheap because it's bundled with our homeowner's insurance. USAA

But $95 ain't bad at all. I was paying $210 a month for both cars until I transferred over. That's a huge difference.

 

[$ub$onic]

Mine is $75/month and that covers my 89 Dodge Colt as well. It's cheap because it's bundled with our homeowner's insurance. USAA

But $95 ain't bad at all. I was paying $210 a month for both cars until I transferred over. That's a huge difference.

I forgot you had that colt!!!


I pay $178 for all three of our cars :/

 

[sx sonic]

People don't ask "can I afford that?" anymore. They ask "can I afford the payments?"

I could get laid off tomorrow and continue to pay my bills for 6 months without income. I'd like to get that up to 12 months.

It's very empowering to be able to go to work because you want to, not because you have to. I don't have to kiss anyone's ass.

This is truth.

If it wasn't for buying things outright, not having credit cards, and keeping any monthly loan payments well below what was "affordable" I would have lost alot of my possessions.

Going on strike for 4months, being laid off for 12 and not having income for 10 months was not expected (unemployment doesn't like single males that go to school!). Because of an avoidance to debt, not buying what was needed and a little help from a strong support network I've managed to stay afloat.

If purchases and luxuries such as the latest I-phone, mega internet, 60" TVs, etc were based off overtime income and payments postponed thru credit cards the outcome would have been much different. Instead purchases were based on what was easily affordable and based off of what I needed and a few wants, not what society says I need.

Credit is overrated, and staying out of debt is underrated.

 

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Short story..... In my early twenties, before drugs got a hold of me, credit was my DOC. The instant gratification of getting what I wanted and worrying about how to pay for it later got me into about $20k of messy debt.

When I finally got my crap together, man did it take a long time to pay all that $20k back. I had to track down some debtors to pay them/settle for less.

I relearned how to get my high from paying down my credit. It is awesome, and couldn't agree more about it be underrated. Nobody gets excited when you talk about paying bills, they want to hear about and see what you bought.

I currently have ZERO credit cards. I'm sure I qualify if I want one. But I don't need one. I owe 15k on the car and 215k on our house (valued at 400k). Once the cars clear, I can really tackle the home loan. I'll admit I've been making extra payments on the home loan instead of the car for a while. My logic is the compounding interest is hurting me more on the 215k than the 15k. But I think it would be smart to just finish the car so I can consolidate my credit into one single loan.

 

[$ub$onic]

Holy house cost batman....... Thank god I love in a area that is no where near that high

 

[Preloader]

Yeah. 1,230 sq/ft. Not much house for 400k. Actually we bought it for 245 when the market was way down. But 400k is very typical around here. And that's not even in the nice neighborhoods.

 

[$ub$onic]

Yeah. 1,230 sq/ft. Not much house for 400k. Actually we bought it for 245 when the market was way down. But 400k is very typical around here. And that's not even in the nice neighborhoods.

That blows my mind, it's kinda amazing how different both ends of the country are.

245k would buy you a couple hundred acres with a farm house around here.

 

[Stew]

245k would buy you a couple hundred acres with a farm house around here.

Man, that is where I would be but with the wife it ain't happening.

 

[$ub$onic]

Man, that is where I would be but with the wife it ain't happening.

It's me being out in the country. But a good job is hard to come by

 

[Preloader]

Hard to make $59/hr out in the middle of nowhere.

 

[$ub$onic]

Hard to make $59/hr out in the middle of nowhere.

That's why I drive a hour, I make really good money for the area I live in. But it would be California poor!

 

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I am currently driving an hour each way. Gas costs me 80/week. Travel dues cost me 19/week. I have $6/hour going to 401 and $5/hour going to my layoff savings. The rest goes to mortgage, utilities, phone, cable and car loan. I end up with about $150/week in spending money. But at least my retirement and savings is growing in the background.

Out of sight, out of mind.