Yodobashi

iTrader: (5)

Pay cash.

Fergy33WF

^yeah because everyone has $38k laying around... Personally, I keep all of mine in my wallet. The massive pile of $1's makes it very uncomfortable to sit down.

ZPrime

But but but we're Americans who have been trained to live beyond our means on credit / etc! $deity forbid we ever save up for something and actually afford it and pay up front.

Yes, paying cash is the right thing to do, if you think owning a car makes sense at all. It's a depreciating asset that really will never do "good" for you so paying interest on it is really stupid. IMO leasing actually makes more sense - while you never own the car, you also don't have to deal with it in 5 years when it has become a POS and is out of warranty.

evostang

Without digging through and looking, I'm pretty sure it's 100/200/100 with $500 deductible.

kinloch99

i see a lot of ramon noodles in your future

evostang

There is another way you can negotiate pricing, and the dealer will never expect you to do it this way.

First you need to figure out the price you are willing to pay, interest rate you are willing to pay, and loan term you are willing to live with. Then calculate the monthly payment based on those numbers. Then when you go in to negotiate price, and they ask you what payment you want, tell them both the monthly payment and loan term you want in months. They will then have to go over actuary tables with thier finance people for a long period of time in order to calculate how much they would actually be selling the car for, and what interst rate they would be getting.

You can't just give them a monthly payment only using this method, you also need to give them the term in months.

evostang

Ramen noodles for me?

foxracingx25

iTrader: (1)

i lawed

92-stealth-twin

so wait, I have $20K to put down on a new evo, so... i have money in a 10 year bond that i won't brake it is $70K will it help me getting a loan to use it against the bond or not? or should i say just screw it and trade in the 9, plus put down the rest of the cash?

fmly evo

iTrader: (4)

i am not 100% sure how you do it, but yes i believe you can borrow against the bond i just don't know how you go about doing it. you can borrow against a money market account @ a low interest rate and pay yourself interest or just do it at the lowest rate.

with that being said i do Financing for a living not investing so i am pretty sure you can do just not actually sure how to. with 401k you call the company you go thru and ask for a loan form... pretty easy.

STevo

cmbjive

iTrader: (7)

I agree with the poster who said don't put $10K on a car. John Wayne Gotti said it best (everything he said didn't involve whacking somebody), "Buy assets that appreciate. Don't by assets that depreciate." Obviously, if you're buying an Evo, you probably plan to mod it, so I wouldn't recommend leasing. However, putting down $5K and getting a low interest loan would be better than putting down the entire $10K. Put the other $5K in a high-yield bond or purchase a CD. Since you're young, you'll have several cars and it would be smarter for you to put some of your money in a savings account (better yet, it would be even smarter to pay down some of your current debt).

One other thing. It is absolutely, ABSOLUTELY, imperative that you get financing BEFORE you go to the dealership. When you are approved for financing from another source, there is absolutely no way that the dealer can load you up with hidden charges and interest fees. You predetermined amount is the absolute limit that the dealer can charge you. This is far more important than having info on the car you want (I am not implying that this isn't important).

92-stealth-twin

well the debt i have is a $500 on my american express, which i am paying that off next week. and no i don't plan to mod it, i didn't mod the 9 so... thanks for the info fmly evo. but should i trade the 9 in and just pay off the rest or finance it so i don't loose a ton on the 9.

cmbjive

iTrader: (7)

92-stealth-twin, I'm not sure you can borrow against a bond, but I would ask a financial advisor about it. I've searched investopedia.com and yahoo! finance, but I cannot find any info that you can borrow against a bond. And if you can't, it makes sense, if you own a bond, you are already the debtholder and if you try to secure a loan against it, you are effectively selling that debt to the person who gave you the loan. However, if you're using the bond as a way to show you have substantial assets, this will only help you in securing financing.

As for putting $20K down on a car, I would advise against it. As mentioned before in this thread, you don't want to put too much money into a car due to depreciation. As for trading in the car, I would try to sell the car before trading it in. If you're not worried about trade in value, then go for it.

92-stealth-twin

Thanks for the advice, cmbjive

evostang

I don't see how anyone can call a car an asset. It's more of a tool than an asset. It gets used and when it's useful life is over, it gets discarded or replaced. I suppose tools are normally valued as assets and depreciated on an accelerated life, but individuals normally aren't businesses and don't depreciate assets in this way.

The theory/practice of putting down the minimum down payment and investing the difference only works if someone actually invests the difference, and then actually does better rate of return than the interest rate they are paying on the car. The is the risk of investing and ending up with less just like there is the possiblity of investing and getting more.

If I had a bond to put down as collaterol, I don't think would. What if you have a bad year and default? What happens to the bond then? I believe it's best to pay cash, but that requires cash up front, and enough cash in reserve really not care about the fact that you're shelling out $30k+ in one lump sum.