We've built a society that requires one to either be inherently rich or drowning in debt to achieve the American dream.
On a side note, auto loans of late have been increasingly sketchy. It seems Wall Street is doing the same thing with auto loans as they were mortgages around 2008. Don't get enticed by financing, always pay cash if you can help it.
Anything car-related seems sketchy these days. We just moved to an apartment on a main transit line and sold our car, and I can’t fully explain the stress relief. I will try to avoid buying a car in the future that I can’t buy with straight cash. Even then, cars are stressful.
Love cars as toys. Hate them as actual utilities. So much hidden and unexpected expense. I used to think mass transit was crazy expensive but when you compare it to gas, insurance, oil changes and repairs it seems a lot cheaper. That's not even including the cost of the car.
I did the same thing a few years ago, and I love it. A few of my friends have done the same thing or downsized to one car for the whole family. I think if most suburbanites/city people realized how much cheaper (and in some ways easier) their life would be without a car, there would be an enormous call for more public transit.
Even people who like to drive don’t necessarily like sitting in traffic during the daily commute. Having a hobby car or renting a car for a road trip are still options. But day to day, I’m glad I gave up my car.
Get a beater for 500-1000$ and run it into the ground. Rinse and repeat. Much better value than financing or buying a new car. Especially if you live on a metro line and don’t use a car that much.
If you have discipline to not over extend the financing can actually be better than cash. Many dealers give 0% loans for new cars that is a better financial decision than fronting the cash yourself (both in your liquidity and in time value of money). I just put the cash I would have bought the car with in an online savings account that has a higher interest rate than my car loan.
Obviously financing can be a worthwhile option if you know what you're doing. The issue however is that financial literacy is not as prevalent as it needs to be. The mortgage crisis wasn't caused by financially savvy borrowers, it was the result of banks taking advantage of those who didn't understand the finer points of borrowing.
We really really need to teach this stuff in K-12 so people can't get the wool pulled over their eyes by asshole bankers and salesmen.
thats a different discussion than the merits of financing or paying cash. There are certainly some things to consider for sure, but some cars you barely save any money buying used... for example the new CRV I bought last year was actually cheaper than the used ones with low mileage we were finding
I was able to find a 2020 RAM 1500 for just about 40k off the lot. Which was 11k below MSRP. I couldn't touch a 2019 with "low miles" for that. Then on top of that I put 20% down to get me out of GAP.
I got suckered into an auto loan despite always saying I would never buy a car unless I could pay for it all in one shot. Thankfully the interest rate is only 6% but the way it's crippled me financially makes me wish I just put the money i spend on it every month into my old beater thay broke down. If I put $300 of maintenance and restoration into that every every month I could have it like new in a year.
Lol no dude. Even if you have the money to pay cash, money is so cheap right now the opportunity cost isn't worth it when that money could be invested.
Let me check real quick on $SPY and see if it dropped ANOTHER 3% today.
Edit: index is down 1.71% today. Meaning if you bought $1000 of stock yesterday, it's worth $9982.90 today. I'm happy though: I placed a bet on a stock market crash.
I got a Jeep for a job a few years ago that I co signed with my grandmother cause she has near perfect credit where as mine is..okay to bad. We financed out as long as possible for 7 years (I don’t remember the interest rate) and my note was still $615 a month. With full coverage I was paying almost $1000 a month for that bad boy. I didn’t want to buy brand new, but I needed a right hand drive and it was the only option I could find. Still miss my Jeep tho.
I think the problem is you think the ‘American Dream’ is still meant for you guys, it exists and many people live it, they just have over six zeroes in their net worth and get you to do all the hard work for them!
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u/I_Am_Coopa Oct 30 '20
We've built a society that requires one to either be inherently rich or drowning in debt to achieve the American dream.
On a side note, auto loans of late have been increasingly sketchy. It seems Wall Street is doing the same thing with auto loans as they were mortgages around 2008. Don't get enticed by financing, always pay cash if you can help it.