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Ice9
3X Ban Lotto Champion



Registered: 03/20/14
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Loc: daterapeville,USA
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Financed a car at 1.99% for 60 months
#26903065 - 08/27/20 08:02 PM (3 years, 4 months ago) |
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Should I pay off aggressively, or due to inflation, the actual cost of the car adjusted for inflation should be less than it is now (fixed payment schedule means inflation doesn't diminish my payments contribution to the cost of car, but in fact decreases it.)
-------------------- The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man. -- George Brenard Shaw
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Ahab McBathsalts
OTD Windmill Administrator




Registered: 11/25/02
Posts: 35,107
Loc: Wind Turbine, AB
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Re: Financed a car at 1.99% for 60 months [Re: Ice9]
#26906458 - 08/29/20 06:33 PM (3 years, 4 months ago) |
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inflation doesn't matter in a rapidly depreciating asset. Interest cost will be like 10% of the total price of the car, but in 60 months, a 5 year car will only be worth 40% of what you paid.
-------------------- "Nobody exists on purpose. Nobody belongs anywhere. Everybody's going to die."
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Ice9
3X Ban Lotto Champion



Registered: 03/20/14
Posts: 11,232
Loc: daterapeville,USA
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Quote:
Ahab McBathsalts said: inflation doesn't matter in a rapidly depreciating asset. Interest cost will be like 10% of the total price of the car, but in 60 months, a 5 year car will only be worth 40% of what you paid.
True, guess I forgot a key piece of info, i'm keeping this for the long haul 10+ years if things go well
-------------------- The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man. -- George Brenard Shaw
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Ahab McBathsalts
OTD Windmill Administrator




Registered: 11/25/02
Posts: 35,107
Loc: Wind Turbine, AB
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Re: Financed a car at 1.99% for 60 months [Re: Ice9]
#26907818 - 08/30/20 12:42 PM (3 years, 4 months ago) |
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It still doesn't really matter. Depending on the terms of the lease you have to think of it as the interest expense as part of the purchase price. The only other decision is whether or not you can earn a higher return with money by paying off debt rather than putting it else where.
If you have credit card debt at 25+% interest, you won't be able to achieve a higher return than paying that off.
If you have student loans at 7+%, still pretty high and it's unlikely you can get a higher return
At 2% though, it's possible to leverage up your assets and invest in a Coca-Cola or Utility and get a 4% dividend rather than pay excess on your car payment. But leverage is always risk. More risk will always lead to higher gains and higher losses if something adverse happens.
-------------------- "Nobody exists on purpose. Nobody belongs anywhere. Everybody's going to die."
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Ice9
3X Ban Lotto Champion



Registered: 03/20/14
Posts: 11,232
Loc: daterapeville,USA
Last seen: 1 hour, 22 minutes
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Yeah, I thought of leveraging the extra to principle payments because of higher return, but like you say, its a gamble.
-------------------- The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man. -- George Brenard Shaw
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CHeifM4sterDiezL
Chief Globerts


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Re: Financed a car at 1.99% for 60 months [Re: Ice9]
#26918729 - 09/05/20 06:57 AM (3 years, 4 months ago) |
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If you fuck up or whatever that car in the next 5 years u still gonna be holding the bag
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Tripsurfer
Bring Back Asante!



Registered: 08/01/12
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Re: Financed a car at 1.99% for 60 months [Re: Ice9]
#26919335 - 09/05/20 01:23 PM (3 years, 4 months ago) |
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I guess its a good deal
Personally I would never borrow money for a car
Maybe Im old fashioned but if you cant afford it now, you shouldn't have it (does not apply to buying a house)
-------------------- Ach en wee ben ik de klos, met mijn boog schoot ik een albatros... A philosopher is a person who knows less and less about more and more, until he knows nothing about everything.

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Ice9
3X Ban Lotto Champion



Registered: 03/20/14
Posts: 11,232
Loc: daterapeville,USA
Last seen: 1 hour, 22 minutes
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Re: Financed a car at 1.99% for 60 months [Re: Tripsurfer]
#26921745 - 09/06/20 06:41 PM (3 years, 4 months ago) |
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I finance cause if you don't it hurts your credit score, which for some reason beyond my comprehension we are beholden to in too many facets of life, like getting a job. I could have the car paid off in a year, and have gap insurance, so no I wont be holding the bag.
-------------------- The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man. -- George Brenard Shaw
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