The popularity of trucks and crossover utility vehicles is contributing to bigger car loans and longer loan terms. Borrowers buying new full-sized pick-up trucks last year pay $622 a month on average.
Will sticker shock — coupled with three rounds of possible interest rate hikes in 2017 — drive more consumers out of the new car market?
As the auto industry comes off back-to-back record sales years, some auto experts are questioning how high sales for new cars and trucks can grow given existing challenges and expected new higher-rate hurdles in 2017.
I'm shooting for 250 or below. My Challenger is $268 but that's a $34,175 car.
Hopefully it's going away soon, if Axis (formerly known as Ally) EVER gets two people you talk to on the phone to give out the same information.
Acura advertised $220 or $240 on the ILX. That's pretty decent for a 30 grand sticker car.
I had to write Acura off, it was in the second tier anyway but the GD sales guy or some ditz "customer care coordinator" bubbly cheery girlie called EVERY DAY for two weeks.
I sent him an email and that stopped the phone calls.
To wit:
Dear Joe,
I've gotten all your calls. In fact, I was thinking of going by the dealership a Thursday or two back, when I got yet another pestering phone call.
One was from some "customer care specialist" or whatever.
Most dealers seem to employ these young women now. Another layer of someone to pester the customer and who tend to have zero knowledge about anything.
I recall our conversation about how so many people can't stand car dealers. The daily calls from you are one reason why.
IF I WANT TO COME BY AND HAVE A LOOK, I KNOW WHERE YOU ARE. I DO NOT NEED TO BE PESTERED EVERY DAY.
I don't know if that is dealership policy to pester people, or your own particular technique. Whichever, it only serves to drive people like me away. So while Acura was in the lower tier of possibilities a couple of weeks ago, it's off my list completely now because I do not want to be pestered by a car salesman.
Allied issues regarding the dealership: Having one 200-grand car taking up the entire floor, when there's room for four or maybe five cars that people might actually want to sit in, out of the weather, is ridiculous. It makes me wonder how reality-based management really is.
No brochures? Sounds like something another consultant recommended. The 30 grand the dealership saves annually takes them off a lot of lists of people who take brochures home and look through them, comparing vehicles.
So. Please refrain from any more calls. I am not interested in an Acura.
I refuse to have a car payment higher than my house payment.
My house payment is $754. My highest car payment was $622.
I have regularly liked my cars / trucks more than my house, so................. It is a little different since we have been doing our renovations and the kitchen in my $250K house is nicer than most $500K to $750K kitchens.
Not having a car payment is really nice. Replacing a $170 EGR valve on my 2001 Silverado hurts a lot less than my cousin's $780/month Ram diesel payment.
For the time being I'm sticking with the one that is payed for and giving me very little trouble. All the while saving for the next one because I hate making payments and would like to keep it as minimal as possible....
I drive 25k a year with a two hour commute and make a little over $8/hour.
As long as my Cruze holds out for the next 27 years, I will be ok.
Pls msg me if you have any tricks to make the battery, oil and tires last that long.
I believe $505 was my largest payment and it was a 48 month loan for an F-150 4x4. It's scary to think of the number of $700, $800, $900/ month notes out there. I guess it all depends on your income and what you're willing to tolerate.
I don't have loans on either of my purchased cars, but if I did.....
Based on purchase price, current rates, 5-year loan and only a small amount down: my F150 would be ~$790 and the MKX would be ~$590 (and the MKX was used), that is crazy!
- Not as noticeable when you save the money first, then buy the car I guess?
I did get a small loan on my truck; for the additional FMC $750 rebate, paid it off in 3 or 4 months, in-total I think I paid about $80 in interest.
Cruze (lease) is a whopping $120/month. (Although I did entertain the thought of buying it, a 5 year loan would have been about $300)
From someone who often pays cash for cars, unless the financing rate is extremely low, I will say there's nothing wrong with a lease if you run the numbers and they approximate the depreciation scale of the vehicle over the term.
Both our truck loans are are in the 2.5% - 2.9% range. Wife's truck is $400 a month and mine is $500 a month. I like to put enough down that my loans are "small" and I'm not upside down. I could pay more, but I'd prefer to invest my cash in other things - Roth, 529 for my kids, 401k, etc. I earned 4%-8% last year in the market. Lower than most years, but still better than the interest on my loans. The only other loan I have is my mortgage (~4% and it's deductible). Everything else I pay cash on.
I drove my 1996 Silverado until December 2013 (and my wife's 2003 Yukon until 2016) so that we could save up enough cash to put a large 20% DP on our house. Not having a car note is a very nice thing if you use the money wisely. $900 extra a month is $10,800 a year in the bank.
The cap for me is $500/month, and I won't finance more than 1 vehicle at a time. Currently the wife has the new vehicle at about $425/month. When that is paid off, I get something new.
The world would come to a halt if everyone lived like I do. I retired debt free and with enough put away to buy the toys I wanted and pay my bills when I was 55 (I'm now 69). My philosophy iss that you can charge necessities and not luxuries. A place to live and a vehicle to drive are necessities and you can charge them. However, a GOOD vehicle is a luxury and you don't charge luxuries. In my college days, I financed a $220 car and a $600 car. I've always lived under a worse case philosophy in that I always had a house payment that was less than the rent would be in case I lost my job so my house couldn't go into foreclosure (and I always had over 50% equity).
Pick one of the ten fastest depreciating vehicles and buy/lease a two or three year old version.
That way, the dude that bought the vehicle new has taken the biggest bullet for you....
Many 2015 models are now around 29% less but with reasonably low mileage.
If you pay cash, the dealer and manufacture make a profit.
If you borrow, the lender, the dealer, and the manufacturer make a profit.
If you lease, the lessor, the lender, the dealer, and the manufacturer make a profit.
The problem is most people are terrible with money but good at making monthly payments so long term plans usually go out the window for short term gains.
Start at 10% of your gross monthly income and adjust it against your Entertainment and Leisure budget according to your propensity. If you're vehicle is a large part of your entertainment and leisure then move more toward the payment, if it has nothing to do with your entertainment and leisure, then decrease your payment accordingly to finance something more desirable.
QUESTION: Bob on Twitter is saving cash for a car. How much car should he plan to buy as a percentage of his income? Dave explains that a car shouldn't be worth more than half of Bob's annual income.
ANSWER: The total value of all of your vehicles—things with a motor in them—should not be more than half of your annual income. If you make $50,000 a year, you shouldn't be driving a $40,000 car. That's stupid. Why? Because they all go down in value. You're putting money in something that goes down in value, and you need to be able to financially absorb that loss without it crippling you.
Cars lose 70% of their value in the first four years. When you turn $30,000 into $11,000, you need to be able to absorb that hit. That's about $100 a week, by the way.
Let's pretend there's a bizarre circumstance where you don't have a lot of income, but you have $10 million in real estate. Then we might use a different formula. If you're worth $10 million, then you can probably afford a nicer car than your income would indicate. As a general rule, your income is a good indicator of your financial juice, so you have to think about how much you're going to put toward something that's going down in value. Rich people don't put a large percentage of their lives in things that are going down in value. That's how they became rich.
We're going to buy on a ratio of our financial situation. We're not going to buy a new car—ever—until you're worth at least $1 million. You're not going to have the total of all your vehicles—ever, except in very rare circumstances—be over half of your annual income. That tells you if you can afford to do something like this. Car payments and big car purchases will make you broke and keep you broke until you're not broke anymore.
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