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Test drove a couple coupes today, impressions and what to do now?
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01-01-2013, 07:01 PM | #45 |
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I'm saying if one has the money to buy a car but can get 0% and opt to keep some of the cash in his pocket (which allow him to pay it off whenever he can), he's not losing out on anything only person. Thats not stupid, missing that key point was.
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01-01-2013, 07:11 PM | #46 |
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I'm a native New Yorker (Nothern Blvd, Queens). I got the point. Made sense to me.
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01-01-2013, 07:16 PM | #47 | |
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01-01-2013, 07:21 PM | #48 | |
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01-01-2013, 07:31 PM | #49 | ||
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01-01-2013, 07:39 PM | #50 | ||
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01-01-2013, 07:50 PM | #51 | |||
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Buying a car with cash is the only smart way to buy one. Sorry if that hurts your feelings but its a fact. |
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01-01-2013, 08:21 PM | #52 |
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If you have the $40k in hand and can also qualify for 0% interest, what's the harm in making payments while keeping your money is in the bank and knowing that you could pay the car off at any time if you wanted to? It allows you to keep the money accessible in the event of an unforeseen emergency, while also retaining the option to use those assets to pay off the car at any time if you so desire. I enjoy the security of having the money in the bank. You never know when an emergency could crop up. Spending $40k outright isn't an option for most folks.
I understand the logic of not taking on debt when you could avoid it, but I feel like having the liquid assets would be more desirable than not having the cash available and instead owning an expensive item with a depreciating value that you can't use to pay for something if a crisis arises. I agree, owing money on a depreciating item isn't great either. From where I'm sitting, though, I'd rather have an interest free car payment and $40k in the bank than no payment and $40k less cash available to me. I'd rather have the large lump sum of money available for a rainy day than be free of a $500ish a month expense for the next 5 years. I can easily afford a monthly $500 payment, but not an unexpected $20,000 payment that pops up out of nowhere if my house gets flooded or something (maybe not the best example because I have insurance, but you get my drift.) |
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01-01-2013, 08:35 PM | #53 | |
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01-01-2013, 09:00 PM | #54 |
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01-01-2013, 09:14 PM | #55 | |
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Do you really think anyone smart enough to be able to accumulate $50K – $75K - $100K would be so stupid to even think about spending it all on a depreciating asset like a car when you can get 0 down & 0% interest? One way to make a big pile of cash smaller; buy a car for cash & drive it off the lot. Instant 20% loss. You might want to ask yourself if buying for cash is the best plan why do the guys who build the cars buy plant & equipment with bank loans not cash. BTW about your big hat in Texas comment......It would lead me to believe they don't even teach basic economics in the schools down there. The cash you left in the bank whatever draws some kind of interest so it grows & if you only earn 2% its worth about $54K when the car is paid off while the $50K in dollars you are paying back out of current funds have less purchasing power, are less valuable, then when the note was signed. Its a thing called future value. Last edited by BEAR-AvHistory; 01-01-2013 at 09:29 PM.. |
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01-01-2013, 09:32 PM | #56 | |
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Companies get loans on depreciating assets because those assets make them money. Your personal car will not. Emergency funds need to be in cash for emergencies. Not for making you a return on investment. You should only buy a car with cash and be debt free if you want to accumulate real wealth and have financial peace. The borrower is slave to the lender no matter how fancy you think you are with financing. You're always on the losing end. Last edited by jacobsed; 01-01-2013 at 09:55 PM.. |
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01-01-2013, 11:10 PM | #57 |
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Congrats man. This is the exact same thing I went through lol. I test drove the 328i and then I drove the 335i. The 328i felt kind of slow.. then I drove the 335i and knew it was what I was gonna get. If you're concerned about issues with a used car, why not lease it?
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01-01-2013, 11:11 PM | #58 | |
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I understand that you disagree, but besides being able to say "I do not owe any money on this thing that I bought. It belongs entirely to me" I fail to see the benefit. If I suddenly needed $20k, I wouldn't have any way of putting my hands on it. With my current arrangement, I am able to do so. I have a strong credit score, am financially secure, and my monthly expenses allow me to contribute heartily to my retirement account and my savings biweekly while also living comfortably. I don't see how I am unable to afford this car. Leave my cattle out of this |
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01-01-2013, 11:16 PM | #59 | |
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As long as he has income coming in, it's a safe bet that he can afford his car. And even if he doesn't, he still has more than enough to cover the payment. |
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01-01-2013, 11:56 PM | #60 | |
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A BMW is a luxury item & IMHO anything over a 4 door Civic is not really necessary but is nice to have if you can afford it. So it needs to be viewed in that way not just as a pure depreciating asset. You are paying money to play that you will never get back so you best pick the most fun toy if you can. Why do you assume they are in trouble and can’t afford one if they take out a car loan especially a zero interest one, that is just a silly statement since you don’t have a clue about the other people on this form. You like second hand cars I won't go near one. You also assume that a $50K fund earning interest is an emergency fund. How about its just some money in the bank earning interest that I felt no need to put into a car & has nothing to do with emergencies. Thing is I can walk into a BMW dealer pick out a $60K, car sign for it, drive away & no cash changes hand no interest is charged on the note. I am pretty sure that would not be the case if I was over extended or a credit risk. Out of 6 cars & one bike on my driveway one is zero percent, 335is, one 0.9%, X3xdrive35i & the last which will be paid off this summer is 1.9%, Expedition XL Limited. No money was put down on any of them & all the others are paid for. When it comes to buying new BMW’s there is nothing unique or special about my situation. A lot of kids at my grandsons high school are driving more expensive cars then mine. You might believe buying second hand cars for cash is the best plan but trying to ram it down other peoples throats who's situations you don’t know is not very smart.
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01-02-2013, 12:14 AM | #61 | |
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In addition to e90 did you think about e46 m3? It is an excellent machine and unique. That is a true M3. Also, e90 328i manual is plenty fast and reliable. It is also much lighter than 335i. Also, manual is a great anti-theft device. You can also check out lease-trader with an option to buy. As you are going through your evaluation, consider also what car would you prefer to drive in HPDE. Even if it is not an option now it may become in the future. GL and welcome to the club! :-) |
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01-02-2013, 01:43 AM | #62 | |||
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That being said, balloon payment is a big red flag. For the Op: Scratch a lot more on what that means for you, as usually, these types of loans are VERY expensive in the long run. |
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01-02-2013, 10:57 AM | #63 | |
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Most financial advisors advocate spending no more than 20% of your annual gross income on a car, so for a $50K car you would need to make about $250K. Makes sense when you think about it, a $50K car just shouldn't be affordable to the average guy. IMO, too many people are driving cars they can't really afford. I don't see the point in driving a $50K car but living in a rental or having no net worth. If I were a fresh grad, I'd buy a Honda, drive it until the wheels fall off, and save like crazy for the down payment on a condo. Last edited by mynycbimmer; 01-02-2013 at 11:07 AM.. |
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01-02-2013, 04:27 PM | #64 | |
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I purchased a used one owner, dealer serviced 2006 330xi with 100K miles on it for $15K cash out the door last January. I've driven it 25K miles and not a single issue. Other than the odometer reading you can't tell its a used car. What a sweet ride! Any repairs it might need in the future will be paid for out of pocket with cash and I'm sure those will be minimal. Look at all that money I saved buying used and my income isn't tied up making payments. |
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01-02-2013, 04:29 PM | #65 | |
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01-02-2013, 04:35 PM | #66 |
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Woah ! Way too much arguing here, either way is perfectly okay. I will give my .02 cents.
Financing option: If I have 40k in cash and the dealer is giving me 0% financing I can reinvest atleast 30k in a money market. A conservative 3% growth would amount to $2,700 in 3 years that is simple math without compounding. Or I could put it in a IRA fund for further tax benefits. Cash option: Only advantage here is I am not forced to pay full coverage on my insurance and save money by paying just liability if I wanted to save money. I don't have the numbers here, but I am curious what the dollar amount is for liability vs. full coverage. Advantages to both options here . |
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