Car Loans for a first timer? - Page 2
Cadillac
 

Cadillac Forums | Help Us Help You | Advertise | Cadillac Parts | Cadillac News | Cadillac Classifieds / (Old System)

Cadillac Technical Archive | Cadillac Dealers | Cadillac Reviews | Cadillac Dealer Reviews | Cadillac Vendors

CadillacForums.com is the premier Cadillac Forum on the internet. Registered Users do not see the above ads.
+ Reply to Thread
Page 2 of 5 FirstFirst 1 2 3 4 5 LastLast
Results 16 to 30 of 62
Like Tree24Likes
Community Lounge, Introductions and General Discussion Discussion, Car Loans for a first timer? in General Discussion; Lets go back to basics here. You want to finance an 11 year old car (because you don't have $3000 ...
  1. #16
    Ranger's Avatar
    Ranger is offline Cadillac Owners Member
    Automobile(s): White Diamond '03 DHS (with DTS floor shift)
    Join Date
    Jun 2004
    Location
    Woodstock Ill.
    Age
    66
    Posts
    72,329

    Re: Car Loans for a first timer?

    Lets go back to basics here. You want to finance an 11 year old car (because you don't have $3000 to pay for it) so that you can save another 11 year old car from dents and scratches. Now I understand that your car means everything to you at that age (yes, I was 21 once), but nothing lasts forever and that car someday will be just a fond memory (please don't say you are going to keep it forever). A car is meant to be driven and enjoyed. Use it, care for it & protect it, but enjoy it. If you absolutely must have another car, save your money until you can afford to pay for it.

    Also keep in mind that ex cop cars are usually pretty well beat on so you could be opening up a huge money pit.
    drewsdeville and bigm57ict like this.

  2. #17
    Kingoftypos is online now Cadillac Owners Master
    Automobile(s): 06 CTS Sport/Luxury package
    Join Date
    Apr 2009
    Location
    Ledyard, CT
    Age
    35
    Posts
    7,507

    Re: Car Loans for a first timer?

    No matter which way you go. Join a local credit union, even if they are not going to be your primary bank. Establish a relationship with them. Then when the time comes to take a loan out, say for a car, you'll have better options with them.

    KOT
    orconn likes this.

  3. #18
    HAZZARDJOHN's Avatar
    HAZZARDJOHN is offline Cadillac Owners Enthusiast
    Automobile(s): 1975 Coupe deVille d'Elegance, 05 Lesabre,91 Suburban 4x4
    Join Date
    Jun 2007
    Location
    Medieval England Iowa
    Posts
    745

    Re: Car Loans for a first timer?

    Loans are a waste of money. be smart about your money. Especially over a $3000 car. I recommend before you ever sign a note you graduate a financial management series. I recommend Dave Ramsey, because his is so simple you just can't help but follow it. I have no car payments and I have been paying myself for 2 years. I have over $5000 in the bank specifically earmarked for my lesabres replacement which is worth about 6K right now. That means if I wanted I could sell my lesabre and buy a $11K car free and clear. Now I want to wait until my lesabre needs to be replaced as it is just a DD and in excellent shape, so who knows where the pot will end up. I put $50 a week into a savings account earmarked for a new car. Seriously there is no reason for a person to every have a car payment. If I would have had this class at 21, my life would be much smoother. I just dug out of debt, and I am in the wealth building stage. It is easier than most people make it out to be. You just can't play the "keeping up with the Jones" game. Chances are the Jones are in deep. I used to think a nice car was a status symbol so i paid up the wazoo to have it, now I enjoy money in the bank more than I ever enjoyed a car with a high cost note. I will probably have a newer nice DD again someday, but I will never have a car note again.

    http://www.youtube.com/watch?v=BKyV8CTHeJ0

    ^ This video is probably 7 years old now, but the idea is the same, just interest rates and car prices have changed.
    drewsdeville and Wolfster like this.

  4. #19
    drewsdeville's Avatar
    drewsdeville is offline Cadillac Owners Master
    Automobile(s): none
    Join Date
    Oct 2004
    Location
    WI
    Posts
    5,280

    Re: Car Loans for a first timer?

    Quote Originally Posted by HAZZARDJOHN View Post
    Loans are a waste of money. be smart about your money. Especially over a $3000 car... I have no car payments and I have been paying myself for 2 years. I have over $5000 in the bank specificallty earmarked for my lesabres replacement which is worth about 6K right now. That means if I wanted I could sell my lesabre and buy a $11K car free and clear. Now I want to wait until my lesabre needs to be replaced as it is just a DD and in excellent shape, so who knows where the pot will end up. I put $50 a week into a savings account earmarked for a new car. Seriously there is no reason for a person to every have a car payment. If I would have had this class at 21, my life would be much smoother. I just dug out of debt, and I am in the wealth building stage. It is easier than most people make it out to be. You just can't play the "keeping up with the Jones" game. Chances are the Jones are in deep. I used to think a nice car was a status symbol so i paid up the wazoo to have it, now I enjoy money in the bank more than I ever enjoyed a car with a high cost note. I will probably have a newer nice DD again someday, but I will never have a car note again.

    http://www.youtube.com/watch?v=BKyV8CTHeJ0
    yes... someone speaks my language.

  5. #20
    Ranger's Avatar
    Ranger is offline Cadillac Owners Member
    Automobile(s): White Diamond '03 DHS (with DTS floor shift)
    Join Date
    Jun 2004
    Location
    Woodstock Ill.
    Age
    66
    Posts
    72,329

    Re: Car Loans for a first timer?

    I agree. Never had a car payment in my life (even at 21). It's not hard. Just remember these 3 words, "Pay Yourself First". Have whatever you can afford taken out of your paycheck BEFORE you even see it (credit union savings if your employer offers it). You'll never miss it and you'll be surprised what's there when you need it. When you get a pay raise, increase your savings by that much. After all, you lived without it before you got it, right?
    drewsdeville and HAZZARDJOHN like this.

  6. #21
    Jesda's Avatar
    Jesda is offline Super Moderator
    Automobile(s): An endless stream of Sevilles.
    Join Date
    Sep 2003
    Location
    St Louis MO
    Age
    32
    Posts
    22,202

    Re: Car Loans for a first timer?

    Here's an example of an installment contract for a young person with no credit:

    Retail price: $5500
    APR: 20%
    Term: 48 months
    Payment: $167.37
    Finance charge: $2533.62 (holy cow)
    Total of payments: 8033.62 (damn!)



    People tend to focus on the payment amount, rarely thinking about what interest will cost them. Think of things you could do with $2533 other than making the bank rich. They see these finance charges in BIG numbers in large boxes on standardized contracts but sign their names anyway.

  7. #22
    rodnok01's Avatar
    rodnok01 is offline Cadillac Owners Connoisseur
    Automobile(s): 98 DeVille, 97 DeVille d'Elegance
    Join Date
    Feb 2012
    Location
    NC
    Posts
    3,425
    Good example Jesda, people forget also that when you get car loan you're on th e hook for full amount with interest right then. Drive it for a year and you still owe more than you paid or its worth probably.
    93DevilleUSMC likes this.

  8. #23
    drewsdeville's Avatar
    drewsdeville is offline Cadillac Owners Master
    Automobile(s): none
    Join Date
    Oct 2004
    Location
    WI
    Posts
    5,280

    Re: Car Loans for a first timer?

    As bad as that is, look at the people leasing - making car payments, no equity, no ownership, no end in sight!

  9. #24
    rodnok01's Avatar
    rodnok01 is offline Cadillac Owners Connoisseur
    Automobile(s): 98 DeVille, 97 DeVille d'Elegance
    Join Date
    Feb 2012
    Location
    NC
    Posts
    3,425

    Re: Car Loans for a first timer?

    Quote Originally Posted by drewsdeville View Post
    As bad as that is, look at the people leasing - making car payments, no equity, no ownership, no end in sight!
    I agree.
    My SIL leases for 2 yrs mainly because she took such horrible care of her cars they weren't worth squat when she got rid of them anyways. She let some dumbass install remote start on one and fried half the cars electronics. Eventually it's gonna catch up and be ugly because they trash her cars, oh well just tack onto new lease...

    She made fun of our DeVilles until she heard how little we spent and how nice they are. She spends more each year on a lease than I paid for my car.

  10. #25
    talismandave's Avatar
    talismandave is offline Cadillac Owners Master
    Automobile(s): 1987 Brougham, 1974 Fleetwood Talisman, Volvo C70,
    Join Date
    Mar 2012
    Location
    Madison WI
    Age
    55
    Posts
    5,949

    Re: Car Loans for a first timer?

    Quote Originally Posted by Ranger View Post
    Lets go back to basics here. You want to finance an 11 year old car (because you don't have $3000 to pay for it) so that you can save another 11 year old car from dents and scratches. Now I understand that your car means everything to you at that age (yes, I was 21 once), but nothing lasts forever and that car someday will be just a fond memory (please don't say you are going to keep it forever). A car is meant to be driven and enjoyed. Use it, care for it & protect it, but enjoy it. If you absolutely must have another car, save your money until you can afford to pay for it.

    Also keep in mind that ex cop cars are usually pretty well beat on so you could be opening up a huge money pit.
    While every one of the poster here have great solid points, I think Ranger hit it on the head.

    Drive and care for your car just as the previous owner did. I just made that decision on my 1987 Brougham. It is not a rare car, nor is it expensive to replace. It has been driven all of it's 27 years in all kinds of weather. I plan to continue to do so.
    Yes at some point it will start to deteriorate from year round driving, and I will make a few futile attempts to keep it beautiful, and get a few more years out of it.
    It will be sad when it gets too rusty to continue on, but even if it is ten years from now, a replacement will be available, and will be inexpensive yet. Just a sad truth. Tons of them made, only of value to the few of us who love them.
    Guido will go out the way he has spent the last 27 years, making his lucky driver happy, and spinning his wheels often.
    I suggest you do the same and save your money along the way for upkeep and gas.


    Also, the guy selling police cars for $3000 is buying them at action for less than a grand. If you absolutely have to have one against everyone's best advice, find municipal auctions in your area and cut him out. Here is a link to one in my area that I found by looking for online auto auctions.

    http://www.wisconsinsurplus.com/

    Just remember that what you spend on the car, licencing, maintenance, and insurance could be going to a car you love instead!
    93DevilleUSMC likes this.

  11. #26
    cadillac kevin's Avatar
    cadillac kevin is online now Cadillac Owners Master
    Automobile(s): chevy 350 powered 86 FWB, 00 safari h.t. 66 toro, 83 lesabre
    Join Date
    Dec 2010
    Location
    St. Louis, MO
    Posts
    5,604
    You want to get another car to keep miles off your caddy? Ok
    Don't buy an ex-police fleet car. Thats a money pit waiting to happen. Also, don't finance it. You're gonna end up paying way more than 3k for a beater car that not even worth 3k. And not being able to buy a $3k outright makes me wonder if you can afford upkeep/ insurance/ gas on 2 cars.

  12. #27
    HAZZARDJOHN's Avatar
    HAZZARDJOHN is offline Cadillac Owners Enthusiast
    Automobile(s): 1975 Coupe deVille d'Elegance, 05 Lesabre,91 Suburban 4x4
    Join Date
    Jun 2007
    Location
    Medieval England Iowa
    Posts
    745

    Re: Car Loans for a first timer?

    FTR, this was just my opinion. I had a friend who leases get all upset at me yesterday when I repeated the same thing to him. I don't really care if everyone wants endless payments or leases. Just be honest with yourself, it is money you spend on personal gratification. If you want to spend that much every year and forgo the ability to be debt free, goodonya! But, if you sell it as a good financial move, or a necessary expense you are lying to yourself. I spend money on things that I shouldn't but I make no allusions that it is anything other than to make me happy. In my life right now, I don't need my house, my Cadillac, my suburban, or any other thing I waste money on. I could make more living in a one bedroom apartment a mile from my work investing the $2000 a month I probably spend on non-necessary luxuries. But I know that and I do not run around telling people it is all an investment. My House you could argue is, but despite the fact it has lost about 20K in equity since I bought it in 2006 (up from a 80K deficit), it will never be worth more than the market will bear. Meaning, If I sell if for a 300K profit in 10 years (yeah right) odds are a similar house will cost 300K more than it does today. So since I need a place to live, it will never be a real wealth maker.
    bigm57ict likes this.

  13. #28
    Ranger's Avatar
    Ranger is offline Cadillac Owners Member
    Automobile(s): White Diamond '03 DHS (with DTS floor shift)
    Join Date
    Jun 2004
    Location
    Woodstock Ill.
    Age
    66
    Posts
    72,329

    Re: Car Loans for a first timer?

    Quote Originally Posted by Jesda View Post
    Here's an example of an installment contract for a young person with no credit:

    Retail price: $5500
    APR: 20%
    Term: 48 months
    Payment: $167.37
    Finance charge: $2533.62 (holy cow)
    Total of payments: 8033.62 (damn!)



    People tend to focus on the payment amount, rarely thinking about what interest will cost them. Think of things you could do with $2533 other than making the bank rich. They see these finance charges in BIG numbers in large boxes on standardized contracts but sign their names anyway.
    Which is exactly why the first thing a salesmen asks is "How much can you afford".
    drewsdeville likes this.

  14. #29
    ben.gators is offline Cadillac Owners Connoisseur
    Automobile(s): 2013 ATS 2.0L Turbo Performance, 99 Seville STS--Gone!
    Join Date
    Aug 2009
    Location
    In the middle of water!
    Posts
    4,195

    Re: Car Loans for a first timer?

    Quote Originally Posted by drewsdeville View Post
    As bad as that is, look at the people leasing - making car payments, no equity, no ownership, no end in sight!
    equity!? For example, in this example case, you will end up paying 3k + 20% interest+financing fees and the equity is...... an old car that has been and will be in need of repairs. In many cases, there is very little, no, or negative equity in cars.

    Old cars have very little or no equity, and they can be money pit. They need your money, or if you want to DIY, they need your time and energy.
    New financed car, especially luxury cars such as Cadillacs, have negative equity.

    Leasing is not necessarily worse that buying old or financing new cars. When you lease, you pay for convenience. You spend zero dollars and no time for repair or maintenance. Zero dollars for rental car when your car is in for repair. You drive brand new car that is more dependable than an old car. And it has a clean, predictable, exit strategy.

    At the the end of the day, you will lose your money no matter you buy a new car, an old car, or lease a new car. You will pay, one way or another! The decision depends on the person and what is important for him. I have tried owning cheap and old cars, and fixing them myself, or have them fixed by mechanic, and I have leased a car too. There are positive and negative sides to both. The only method for not paying is taking a bus! But that is not convenient. So we pay for the convenience of owning a personal car.
    93DevilleUSMC and orconn like this.

  15. #30
    drewsdeville's Avatar
    drewsdeville is offline Cadillac Owners Master
    Automobile(s): none
    Join Date
    Oct 2004
    Location
    WI
    Posts
    5,280

    Re: Car Loans for a first timer?

    I'm not sure you are understanding the discussion.

    No one is comparing the purchase of an old car vs lease of new car, as you've used as a supporting example.

    No one is saying you will make money on any scenario. All will come at a price. We aren't discussing investments.

    Negative equity > zero equity - every single time, especially when they are available for nearly the same cost! Residual value is a good thing. I could make lease payments for 5 years and have nothing to show for it at the end, or I could purchase, cash, and still own a $10k asset (or another 5 years of good service with no payments) after those 5 years.

    I'll take the $10k.

    As far as the maintenance concern - welcome to 2014, where a typical new car has a warranty that outlasts the typical lease duration anyway, and will run at least 10 years before incurring any significant maintenance costs - double the years of a really long lease duration (5 years), over 3 times as long as a 3 year lease. This concern was a little more relevant in previous decades. But today, can you honestly tell me that you expect a 3-5 year old car will continually rack up more in maintenance costs than the cost of a new lease agreement???

    A lease has one advantage - it will get you in car(s) that you can't actually afford to purchase at the time. That's it. As previously mentioned, if you are doing it because you enjoy it (everyone likes a nice car), there's nothing to argue. But you'll never be able to justify it for financial reasons.

Quick Reply Quick Reply

Register Now

Please enter the name by which you would like to log-in and be known on this site.
If you do not want to register, fill this field only and the name will be used as user name for your post.

Please enter a password for your user account. Note that passwords are case-sensitive.

Please enter a valid email address for yourself.

Log-in

Human Verification

In order to verify that you are a human and not a spam bot, please enter the answer into the following box below based on the instructions contained in the graphic.



Bookmarks

Cadillac Posting Rules

  • You may post new threads
  • You may post replies
  • You may not post attachments
  • You may not edit your posts
Read about Lincoln | Buick | Kia Forte Forum
Need products for your Cadillac? Check out your options at the links below:

custom floor mats | Cadillac Chrome and Black Chrome Wheels | window tinting