Topic: The real reason you're broke - Look in your driveway

[quadzilla]

Interesting article....most of us probably knew most of this though.

In the U.S., more than 80% of car loans are for terms longer than four years (which, a couple of decades ago, was considered a long loan). The average loan term has grown from just under four years and seven months in 1990 to over five years and four months in 2006. Longer loan terms mean that people build equity in their car more slowly, which in turn means that borrowers will be "upside down" on their vehicles -- owing more than they're worth -- for three years or more on the typical purchase.

http://finance.sympatico.msn.ca/savingsdebt/insight/article.aspx?cp-documentid=5490155

[jcon]

And with the low low rates they offer now, this is not that applicable.

Heck, if I could only get a Canadian car at US prices, I would be less poor!


 

[ktm525]

Why would I want to build equity into a depreciating asset?

Lease at low rates and hand it back or buy used and pay cash.

[WpgMonty]

Yup, what he said. Buy used, and pay cash.

I owe nothing on three vehicles, other than insurance payments.

[Trainman]

Yup, what he said. Buy used, and pay cash.

I owe nothing on three vehicles, other than insurance payments.

Yup, we owe nothing on ours, and have not since we bought our Tracer in 1988.  And even then we only kept the money in the bank as it was earing much more than what Ford was charging as rates.

[mdxtasy]

Why would I want to build equity into a depreciating asset?

Lease at low rates and hand it back or buy used and pay cash.

No doubt.  But some feel the need to roll in a new set of wheels....regardless of the financial situation/strain.

[Leviathan]

Why would I want to build equity into a depreciating asset?

Lease at low rates and hand it back or buy used and pay cash.

Or finance at 0% 

[The Mighty Duck]

I think we all know here you're still getting ripped off when you finance at "0%".  It's always, always, always 0% or $XXX cash back.  Granted, you know how much "interest" you're paying and it's almost certainly less than you would financing at 7% (even 7% at the lower "cash back" price").  But 0% is still a misrepresentation and a rip off.  If you can buy cash it's almost universally better, except in cases like Trainman's.

[initial_D]

Operating expenses on vehicles aren't exactly cheap either. I know of people finance their insurance premiums as well, and paying gas on credits cards, which has a huge balance on them. All adds up.

[Wolverine]

And with the low low rates they offer now, this is not that applicable.

Heck, if I could only get a Canadian car at US prices, I would be less poor!


 

If I could have a Brazilian car at a Canadian price I would be rich by now...

[dr_spock]

My car is paid for but those VW parts are costing an arm and leg or two. 

[gotak]

Used cars are only good value if they don't develop problems. Know people who go used and ended up spending what it would have cost to get a cheap new car.

Too bad cars aren't like computers.

[y2chuck]

I'll always lease at least one car.  Easier to get out of when I get bored of the car after a couple of years.   Although we are planning on buying the Torrent after the lease which means hello summer Solstice for me.

[Snowman]

  I’m a car guy... I have had a car payment since I was 18.…so what? 

[Craig]

My TSX is my first financed car, and my first monthly car payment - at 0.8% interest over 24 months (which is great if you can afford it).  We lease the X-Trail, but paid up front (made some sense at the time).

I hate being in debt.  I guess my parents instilled that.  In their mid-20's, they managed to build (in 1967) the home they live in today, without taking on a mortgage.

I went car shopping last year, and the Mazda dealership started extolling the virtues of the 72 month finance.  24 months was 0%, but 72 months was just 4.9%!  I told him that was the dumbest thing I'd heard of - who finances a car over 6 years?  I mean, if it takes you 6 years to pay off a car, you probably can't afford that car.

[ovr50]

And with the low low rates they offer now, this is not that applicable.

Heck, if I could only get a Canadian car at US prices, I would be less poor!


 

If I could have a Brazilian car at a Canadian price I would be rich by now...

Thanks, Wolverine, it's good to have that perspective in place of the continual whining about Canadian car prices. 

[jcon]

And with the low low rates they offer now, this is not that applicable.

Heck, if I could only get a Canadian car at US prices, I would be less poor!


 

If I could have a Brazilian car at a Canadian price I would be rich by now...

Thanks, Wolverine, it's good to have that perspective in place of the continual whining about Canadian car prices. 

Someone in Argentina is thinking, "If I could have a Argentinian car at a Brazilian price I would be rich by now..."

[johngenx]

It is possible to have fun and be a car nut and not go broke owning cars.  It also possible to spend WAY too much on cars.  I have had periods in my life of doing both.

I see all kinds of neat stuff that is still a good car (say 3-4 years old) and can be had for much less than any desirable new car, and perhaps less (or not much more) than the most basic new transportation.  Examples?  A 2004 WRX would be lots of fun and can be had for $20K-ish for a nice example.  Used Miatas are, well...I don't need to say more.  The list goes on...

[Wolverine]

And with the low low rates they offer now, this is not that applicable.

Heck, if I could only get a Canadian car at US prices, I would be less poor!


 

If I could have a Brazilian car at a Canadian price I would be rich by now...

Thanks, Wolverine, it's good to have that perspective in place of the continual whining about Canadian car prices. 

Everytime you think you are getting ripped off when buying a new car, remember of me and be happy, ehehheehehheheh.

Would be something like this:

"Darn, I have to pay 71K on this 535xi  ... Wolve would have to pay 400k...   "

I'm not exaggerating, a brand new BMW 535i here would cost R$401,000.00, at least that was the price for a new 535i 2006 back then.

Someone in Argentina is thinking, "If I could have a Argentinian car at a Brazilian price I would be rich by now..."

I guess not, cars in Argentina are cheaper than here from what I saw, even cars made in Brazil and exported to Argentina are cheaper there...

Wanna know what would be "DA DEAL"? If I could by cars in Canada for a canadian price and sell in Brazil for a brazilian price, ohhhhh boy.

[Sir Osis of Liver]

I knew it was the car!
Glad it's not the hookers and blow!