Crappy Car Loans

Good discussion so far. Thanks for the info, everyone.

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Originally Posted by Stone

Your "equity" in a car is the value of the car on the used market - the value of your loan.

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So basically, for myself and the kind of new car I would buy (lower-end; Civic, Camry, etc.) it wouldn't make any sense to really expect much equity out of one. If I were to finance a decent-sized SUV or a Cadillac or something, would it be worthwhile then?

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I'm upside down, Mike. The car dealerships that say they will pay off your loan will simply charge you more for your new car.

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Makes sense. That's what I was thinking was going on.

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Originally Posted by Rumpy

You gotta drive one to know why people pay BMW prices. If the car was "meh", BMW wouldn't get away with the prices they ask for (and the odds of getting a new BMW at/under list is next to nothing. The company has an iron fist on their pricing). Speed, looks and handling go hand to hand with BMWs, (as does the price).

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I think BMW's are just solid vehicles. I wouldn't drive one because of money or anything; I would drive one because they handle well, the gas mileage is much better than my expectation would be and the design really makes for a comfortable ride.

And don't they have that thing now where they build a few years' maintenance into the cost or something? Or is that just a higher price?

Not sure. But lately I've seen dealerships give free oil changes for as long as you own it. No idea if they just add that to the price though.

I may have to file bankruptsy just to get the bank to stop pestering me. I've been without work for awhile now with the knee 'n all, even with the car turned in and sold, I've got a heafty 6 grand that I still have to pay off.

To hell with the dealerships and their commission.

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Originally Posted by Rumpy

Not sure. But lately I've seen dealerships give free oil changes for as long as you own it. No idea if they just add that to the price though.

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Double-check the insurance you have. If you're on a maintenance program, you may have to pay a percentage or nothing per repair.

Mine was set for covering everything after $100.

My car loan is pretty crappy- it's upside down by $2,000. I do feel like a "dumbass" (Stone, you hit it right on the head) for buying.

Next time, I will lease my vehicle. To Hell with outright purchasing.

Besides, if you lease- you generally give up the car at the term's end, so you can get out from under it before it eventually ages and things start needing replaced. The only kicker is that you have limited mileage.

http://www.autobuyguide.com/car-buying-guide-9.html

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Originally Posted by stormy

If that's what people are into I don't think it's stupid. I'm sure there are a lot of people that think your (or most people on TNL's) game collection is a waste of money, but you get plenty of enjoyment out of it.

I want an RX8 :xx:

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My game collection has a much better chance at appreciating than a new car.

Though people who stockpile new games hoping to make a profit are idiots.

The only things you should ever go into debt for are real estate and an education.

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Originally Posted by Mike

So basically, for myself and the kind of new car I would buy (lower-end; Civic, Camry, etc.) it wouldn't make any sense to really expect much equity out of one. If I were to finance a decent-sized SUV or a Cadillac or something, would it be worthwhile then?

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No, man, virtually all cars depreciate wildly, unless you've got some rare classic. An expensive car depreciates even more.

'Equity' (value of an asset - debt related to that asset) is good if an asset generates interest, or appreciates - if the value of that asset grows while you hold it. As that asset grows, your money (your equity) makes more money, without you doing anything. That's why equity is good.

If the asset is depreciating, like a car, then having equity, money invested, in that asset, actually costs you money - that equity is sitting around, losing its value, being worse than useless, when you could have it in a market spider or something, actually generating some value for you.

Debt is like the negative of equity.

Debt is money you get that costs you extra money (interest). Debt is good if having access to that money allows you to make money - money at a higher rate than the rate of interest you're paying. That's why college debt can be good - you pay for the opportunity, but the opportunity generates more money for you than it cost to obtain that opportunity.

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^ ROFL ^

I wish Stone still posted.

I'm upside down on my current car loan. Once I save up some money later this year I'm going to pay off the negative equity and trade that fucker in for a new leased car.

The only way to "make" money on a car is to drive it for 10 years where the money you "make" is the money you save by not having a car payment for a few years minus maintenance (which may be a shit-ton depending on the car).

At least with a leased car I'm not the one taking the depreciation hit with no end in sight and I'll be paying $300-$500 a month for a car that's 3 years old or less instead of driving a 6 year old car into the ground for the same price just so I can continue driving it for a few more years to save money on the car payment.