Interest Rate - What's yours?

[BajaFred]

I understand the concept nothing wrong with people doing it, I get it. Personally I prefer not to. If I can't pay cash then I shouldn't buy it. Only exception is a house. Just my philosophy.

Used to be the same way on principle, but I now I put the entire amount I would have paid in a separate account and auto pay from there - you don't even think about it after a few cycles, and I'm not SOL if something happens to the truck

 

[Frank N]

Banks lend you money when you don't need it and won't lend to you when you do need it. (lost job, etc)

Paying 1.5% to have $70k contingency money in the bank is cheap insurance.

That and at these rates I would pay more in capital gains this year pulling out that kind of money from the market than I would in interest to the bank over the life of the loan.

 

[boss301]

Again these show-off guys with "cheap insurance", "I only pay cash".....

Sent from my SM-G955U using Tapatalk

 

[zmw]

How is that showing off - anyone buying these trucks is spending between 50 and 70k or more with markup on a truck that isn't even a good work truck. I'm in the same boat - 75 months at 1.49%, I could afford to pay cash, but at that interest rate it's crazy to not use the bank's money. If you are buying a raptor and can just barely afford it that's more of a concern. Oh and I financed 100% minus some equity... I roll the equity into my new vehicles, but I never put cash down - except I'm OCD on payment amounts so sometimes I'll put a few hundred bucks down to get it to a round 10s value - paying 537 drives me nuts, so i'll buy it down to get to 530 - or whatever it is for the raptor, I think it's like 980.

Anything over 5% is murder on auto rates right now, on 72 months credit unions are between 1.4 and 1.9 or up to 3.9 on 84 months.

It has less to do with credit score than your relationship with your institution of lending. I run between a 750 and 780, but have bought 40 cars with them and regularly pay them off in 12-18 months - my wife, stay at home mom, has an 820 rating which I find hysterical, all I can think of is the credit agencies realize she's got a sugar daddy or is inherently wealthy because she reports 0 income.

All I know is I would never loan 75k to someone only to make 1.49%, and the penalty for moving that much money is far more than the 1.49% APR.

 

[Craigy]

Check your local credit union, should easily be sub 3% all day long.

If you're needing 72, 84, 144mo though, the rate is probably the least of your worries.

 

[RaptorEnthusiast]

I understand the concept nothing wrong with people doing it, I get it. Personally I prefer not to. If I can't pay cash then I shouldn't buy it. Only exception is a house. Just my philosophy.

I agree. Have you by chance taken Dave Ramsey's Financial Peace courses?

---------- Post added at 12:22 AM ---------- Previous post was at 12:17 AM ----------

Check your local credit union, should easily be sub 3% all day long.

If you're needing 72, 84, 144mo though, the rate is probably the least of your worries.

Exactly. These trucks aren't cheap. Being able to "afford" a payment is the incorrect way of assessing whether one can truly afford it in the first place.

 

[cardude99]

I agree. Have you by chance taken Dave Ramsey's Financial Peace courses?

No i have not but i am familiar with it to a point. I like to listen to him from time to time. I tend to take to heart a lot of his advice and it pans out, most of it is common sense but some of it puts things in perspective. Always good to hear other view points.

 

[RaptorEnthusiast]

No i have not but i am familiar with it to a point. I like to listen to him from time to time. I tend to take to heart a lot of his advice and it pans out, most of it is common sense but some of it puts things in perspective. Always good to hear other view points.

Good for you. If you know about Dave Ramsey and listen to his show from time to time, then you are definitely understanding the gist of his courses. It was especially eye opening for my wife and I when we took the course because we realized how backwards it was to perceive affordability through the lens of monthly financing. We've made a decision to never finance again and are working towards paying off our home as soon as possible now. That would truly be achieving financial freedom.

 

[Frank N]

Dave's advice is good for people who can't handle their finances and rely on debt to make ends meet.

I have heard him tell people to pay off the house without consideration of 401k deposits and its tax advantages, lost employer contributions and interest rate deductions on the mortgage, that's slapstick financial advice.

 

[CaptainInterwebs]

Ended up financing 67k after trade in and tax etc. Truck was right at 71k. 2.49% at 78 mo. biweekly payments + plan on making an extra payment or 2 a year.

After mpg savings it's honestly 80 a month more than my jeep was *shrug*

---------- Post added at 02:39 AM ---------- Previous post was at 02:29 AM ----------

How is that showing off - anyone buying these trucks is spending between 50 and 70k or more with markup on a truck that isn't even a good work truck. I'm in the same boat - 75 months at 1.49%, I could afford to pay cash, but at that interest rate it's crazy to not use the bank's money. If you are buying a raptor and can just barely afford it that's more of a concern. Oh and I financed 100% minus some equity... I roll the equity into my new vehicles, but I never put cash down - except I'm OCD on payment amounts so sometimes I'll put a few hundred bucks down to get it to a round 10s value - paying 537 drives me nuts, so i'll buy it down to get to 530 - or whatever it is for the raptor, I think it's like 980.

Anything over 5% is murder on auto rates right now, on 72 months credit unions are between 1.4 and 1.9 or up to 3.9 on 84 months.

It has less to do with credit score than your relationship with your institution of lending. I run between a 750 and 780, but have bought 40 cars with them and regularly pay them off in 12-18 months - my wife, stay at home mom, has an 820 rating which I find hysterical, all I can think of is the credit agencies realize she's got a sugar daddy or is inherently wealthy because she reports 0 income.

All I know is I would never loan 75k to someone only to make 1.49%, and the penalty for moving that much money is far more than the 1.49% APR.

I'm the same in regards to financing vs paying cash. I car hop every few years usually (hoping that changes now) so I'm reallllllly used to a car payment. It's just one of my bills. I'd rather be liquid 50-70k+ $$ than pay cash and it lose 30% value in a hurry (maybe not so quick for these).