Would you buy a new car on a 60 month loan?

by Elsewhere 134 Replies latest jw friends

• 

  Elsewhere

  I have NEVER done a 60 month loan and I have sworn I never would... but with how much cars are costing these days I'm wondering if I will have to do a 60 month loan on my next car.

  That is FIVE frigg'in YEARS!

  I paid cash for my last car ($4,500 - 1999 Ford Contour SE, Used) so I had no payments to make

  I did a 48 month loan on my car before that ($10,900 -- 1996 Nissan Sentra, Used )

  I did a 36 month loan on my first car ($5,000 --- 1991 Ford Tempo)

  All my life I have nevr even considered buying a new car... I just never could bring myself to do it because of their depreciation. Lately because of gas prices I have gone from looking at used sporty convertibles (About $18,000) to looking at a new Toyota Prius ($24,000 with options). I looked at the used prices of these Prius cars and was amazed at how well they held their value, so that makes me more inclined to buy new.

  Buying the Prius for $24,000 - $5,000 down payment with 4.65% interest (Credit Union) for 60 months will make my payments $355.51 a month... I normally will scoff at the idea of paying over $300 a month for 48 months, but I think I may not have a choice in the matter anymore.

  Would you do a 60 month car loan?
• 

  lazyslob

  A friend of mine did buy the Prius. After 3 years he had to replace all the batteries it did cost him about 14000 $. I would ask Toyota about that before buying it. Specially if you have to keep it 5 years. Lazy
• 

  Scully

  We did it for Mr Scully's work vehicle. At the time, GM had a 0% interest rate over 60 months. No regrets.
• 

  Sara Annie

  The conventional wisdom when purchasing a car is that since an auto loan provides you no tax beneift, you should finance it for the least number of periods that will still allow you to comfortably make the payment.

  But it also depends on what kind of buyer you are: Do you like to drive a new car every few years? If so, look into short term financing or lease programs.

  But if you prefer to purchase, pay for, and drive a car as long as possible before purchasing a new one, then a 60 month loan on a new automobile is just about standard given the price of a new car these days, and it is also the longest financing period I would personally undertake. Any longer and you severely limit your ability to refinance or trade in the vehicle if needed, since your outstanding loan value will likely be appreciably higher than the present value of the vehicle itself.

  But again, that's just me. I know a lot of people who are financing their cards for 72 and even *gasp* 84 months just to be able to afford as much car as they want. I say choose the shortest period that you can afford, and if that happens to be 60 months and you're comfortable with having/maintaining a vehicle for the long haul, go for it.

  Sara--of the "accountants are the most boring people on earth class"
• 

  tetrapod.sapien

  you could move close to where you work, and buy a sweet bike. i do all my stuff, including work transport, on my bike. i break my mazda protege out on the odd weekend that i want to get out of town. the gas prices don't mean much to me at that point. of course it's not the price of gas that i am concerned about, it's the rape of the planet. but, hey, that's just me. i don't pretend it would work for everyone.

  regarding the loan, stay away from it. it's not worth it, regardless of the price of gas.
• 

  Happy Guy :)

  Elsewhere have you considered leasing? I have always purchased but given the current leasing environment for some vehicles I will likely lease my next vehicle.
  

  This is something that I never considered before but over the last few years a few developments regarding: the level of manufacturer subsidization of leases; and, the cost of maintaining "off warranty" cars have made the case for leasing very compelling.

  Since you are obviously very serious about this topic I suggest you look into leasing as an alternative. You will need to evaluate open ended vs. closed leases and see which would be more advantagious to you. You should also realize that any limits placed on miles are negotiable. As well, I suggest you try to find a vehicle which combines a high guaranteed residual value and highly subsidized lease rates for the most bang for your buck.
• 

  thom

  I like to keep cars until they're just about dead. I used to buy new cars but it was just a constant outflow of money every month. I find it much cheaper to get my car repaired as necessary, even if it might cost $1,000 to get the work done. That's just a few car payments and since I have no payments in the end I save alot of money.
  Last time I figured it out, if I average my repairs over time, I spend about $45/month in repairs. That's much cheaper than a car payment.
  But that's just me, not everyone is happy to drive around a 10 year old car they bought for $900. But consider I get 35-40mpg, have no payments, and trust the car to take me across the U.S. at any given time, what's the real difference?
• 

  JH

  That is FIVE frigg'in YEARS!

  Yes, and 5 long winters, springs, summers, falls.

  Twice I borrowed money for a car, and payed it in 2 years. I remember borrowing 7000$ for 2 years back in 1990 and the interest rate was about 18% back then. I had to pay back 9000$ back, so 2000$ in interest after 2 years... All the other cars I payed cash, and they were all mine as I came out of the garage.

  If I had a house to pay, and a wife and children, I guess I would have no other choice but to pay on time or rent a car.
• 

  Elsewhere

  I just got back from the Toyota dealer hoping to test drive one and get more information.

  I cannot believe how he treated me. He was talking to me with an attitude and telling me that there is a six month wait, no car to test drive and no brochures to show me... he gave me a photocopy of some information.

  Hell, if I'm going to go in there and drop that kind of cash for a new car, that man better drop to his knees and lick my ass hole... and make nice neat little circles with his tongue!

  To make it worst he would NOT give me any interest estimates... he kept going on about how he's not the bank and can't speak for them. BULLSHIT!

  He also would not tell me how much the car would cost even though we were looking at the computer screen with the price right there. He kept mumbling something about a "price adjustment" because of the high demand. He never would tell me what a "price adjustment" was so I just out and asked him if it meant that I would have to pay extra for the car and he finally confirmed that is what he meant. I asked him how much more and he said it would be between $500 and $2,500 depending on what options I had. I told him that he already knew what options I wanted but he still would not give me a solid price. BULLSHIT!

  I bet that if I told him I wanted to buy a car he could have a contract printed up in 10 minutes with all of the number ready to go.

  I told him I would not pay any "price adjustment" if he wanted to sell me a car. He just stared at me with a stupid smerk.

  I then asked him about their "Employee Pricing" and 0% interest rates that were advertised on the big-ass banner draped across the front of the building. He said that those did not apply to the Prius and that I would have to pay a full interest rate at full price. BULLSHIT!

  Also, while looking at his computer screen I saw four Prius cars with options very similar to what I wanted, all of them had a delivery estimate of 1 or 2 days and I ask him about them... he said he had no idea why the computer said that and that the car would still take up to six months to deliver. I asked him why the numbers said 1 or 2 days and not six months and he just shrugged and said he had no idea why. BULLSHIT! I write financial web pages far more advanced than that all the time and if my web page created numbers that far off I'd have to fix it damn fast or be out of a job.

  Damn I hate car salesmen and today I was reminded why. They are all full of shit!!!!
• 

  lonelysheep

  I lease my current vehicle and probably will do the same next April when this one is up. I like the fact that I'll have a new car again with decent payments....along with a warranty to cover during the lease term.

  Growing up, I watched my father, who is very, very frugal, only pay cash for used cars that seemed to me, to always need some kind of major repair. I saw no purpose in dishing out thousands of dollars at one time rather than pay for something reliable. I told myself I would never do that.
  
  To me, unless it's Honda (or of like quality), it's not going to last long anyway.