I'll never finance another vehicle.

[BigC]

The lease is up on my truck soon and I'm going to return it. Then I will buy a "used car" that will hopefuly last a while, all the whill putting that lease payment in the bank. Then after 36-48 months (depending on what I decide I want) I'll pay cash for a new car.

I don't drive alot and average about 7500 miles a year. So Three years later with the same process the trade in should pay for half of another new one. Rince and repeat...

Right now I'm having fun with research and am liking the Volkswagon Jetta TDi clean diesel. And the VW Eos hard top convertable. We'll see what happens. Hey! I'll be middle aged crazy by then.

[d2creative]

Putting the money away each month now, or paying monthly payments in 4 years, it's the same difference. Especially if you get a low or 0% interest rate. The only difference is you'll make .05% interest on your savings.
And then when you walk in and plunk down $30k all out once, two minutes later when you drive off the lot you've already lost at least $5k.

The only real benefit is while you own the paid for used car and after you buy the new car with cash, you are not REQUIRED to make the monthly payment if money is tight that month. That can really take a load off.

[ronocnikral]

we just bought a new car and the sales person said only 4-5% of people pay cash for cars. each financing method has it's pros and cons (just like everything in life). but, I have found not looking at a car purchase as an investment, expecting to drive it for years (not going out and buying the newest car every year) and paying cash has worked well.

we don't do car payments and will never do car payments, even if I have to bike to work (about 5 miles). and we always buy used. whatever money we have in savings and feel we can afford is the type of car we buy (2 cars ago, I bought a 1993 olds, it's for sale btw). we had quite a bit saved, so this time around we got a lexus (used of course and still on warranty) for less than we could get a new toyota corolla. plus, when you have cash, i feel that I have more power to negotiate (never not had cash though...). stay on top, that's this 26 yo's advice.

ps, you'll find that if you are going for reliability, european makes tend to be the worse (and often the most expensive to repair). edmunds.com has an excellent site for the true cost of ownership.

[BigC]

Originally Posted by d2creative

Putting the money away each month now, or paying monthly payments in 4 years, it's the same difference. Especially if you get a low or 0% interest rate. The only difference is you'll make .05% interest on your savings.
And then when you walk in and plunk down $30k all out once, two minutes later when you drive off the lot you've already lost at least $5k.

The only real benefit is while you own the paid for used car and after you buy the new car with cash, you are not REQUIRED to make the monthly payment if money is tight that month. That can really take a load off.

Yup, I'll earn intrest on the money instead of Ford. Then after the first One the monthly put aside can be lowered giving more latude in the savings. The vehicles I'm looking at have a "high" trade in value. So every few years I'll always be driving a new car.

BigC added 3 Minutes and 19 Seconds later...Double Post Merged Below

Originally Posted by ronocnikral

we just bought a new car and the sales person said only 4-5% of people pay cash for cars. each financing method has it's pros and cons (just like everything in life). but, I have found not looking at a car purchase as an investment, expecting to drive it for years (not going out and buying the newest car every year) and paying cash has worked well.

we don't do car payments and will never do car payments, even if I have to bike to work (about 5 miles). and we always buy used. whatever money we have in savings and feel we can afford is the type of car we buy (2 cars ago, I bought a 1993 olds, it's for sale btw). we had quite a bit saved, so this time around we got a lexus (used of course and still on warranty) for less than we could get a new toyota corolla. plus, when you have cash, i feel that I have more power to negotiate (never not had cash though...). stay on top, that's this 26 yo's advice.

ps, you'll find that if you are going for reliability, european makes tend to be the worse (and often the most expensive to repair). edmunds.com has an excellent site for the true cost of ownership.

If I do what I'm planning to do. By the time the VW's warenty is up Three years 36000 miles. I'll be in a position to trade it in for a new one. Cash.

[Jake]

Sounds like someone's been listening to Dave Ramsey.
I currently have 2 vehicles and zero car payments. I plan to keep it that way if possible.

[groovyone]

Originally Posted by BigC

The lease is up on my truck soon and I'm going to return it. Then I will buy a "used car" that will hopefuly last a while, all the whill putting that lease payment in the bank. Then after 36-48 months (depending on what I decide I want) I'll pay cash for a new car.

I don't drive alot and average about 7500 miles a year. So Three years later with the same process the trade in should pay for half of another new one. Rince and repeat...

Right now I'm having fun with research and am liking the Volkswagon Jetta TDi clean diesel. And the VW Eos hard top convertable. We'll see what happens. Hey! I'll be middle aged crazy by then.

I love my 09 TDI. I still finance even though I plan on paying off mine waaay early. It looks good on your credit report, where if you pay cash it will not show up.

Having a payment on the Jetta is annoying the heck out of me, but it will paid relatively soon. After that I will have 6 vehicles (2 bikes, 4 cars) between me and the wife, and only her Explorer will be financed, but it is at 0%.

[jerrykr]

Another advantage to outright ownership, is that you have a choice in how much insurance you decide to purchase.

If you have the car as collateral on a loan, you are required to carry full coverage, even if the car is not worth all that much.

[groovyone]

Originally Posted by jerrykr

Another advantage to outright ownership, is that you have a choice in how much insurance you decide to purchase.

If you have the car as collateral on a loan, you are required to carry full coverage, even if the car is not worth all that much.

That makes a huge difference on motorcycles too. When I first got mine, full coverage was ridiculous at something like $2-3K/year. My required coverage + uninsured was closer to $300/yr.

[BigC]

Originally Posted by jerrykr

Another advantage to outright ownership, is that you have a choice in how much insurance you decide to purchase.

If you have the car as collateral on a loan, you are required to carry full coverage, even if the car is not worth all that much.

I have checked with my insurance co. My insurance will drop from $80.00 a month for full coverage to around $30.00. for liabilty. More money for the kitty.

BigC added 1 Minutes and 14 Seconds later...Double Post Merged Below

Originally Posted by groovyone

I love my 09 TDI. I still finance even though I plan on paying off mine waaay early. It looks good on your credit report, where if you pay cash it will not show up.

Having a payment on the Jetta is annoying the heck out of me, but it will paid relatively soon. After that I will have 6 vehicles (2 bikes, 4 cars) between me and the wife, and only her Explorer will be financed, but it is at 0%.

How do you like the diesel? I already found a station a block from home that sells it.

[kenw]

leasing isn't really financing in the classical sense, it's renting.

The trick with buying new or used, cash or via loan, is to keep the car as long as possible. There's no reason you can't keep a well made car 10+ years. If you trade it in and it still has much book value, you're doing it all wrong. The cost of maintenance is rarely, rarely, rarely equal to the cost of payments so patch-up-and-go is often a smart method as long as you can depend on it for the job it needs to do. Drive it until it is basically scrap.

[mmuhlenkamp]

Originally Posted by kenw

The cost of maintenance is rarely, rarely, rarely equal to the cost of payments so patch-up-and-go is often a smart method as long as you can depend on it for the job it needs to do. Drive it until it is basically scrap.

+1

I drive my boyfriend's old Honda Accord (I live very close to work and generally don't drive out of the DFW area) and I don't think I ever want to buy a new car. This thing has over 300,000 miles on it and I had do about a $1000 worth of repair when I first got it, but only about $500 a year (besides general upkeep like oil) since then. I would hate to be making a car payment every month and have to pay full coverage insurance. I'm driving this thing till it's too expensive to repair and then finding another used car.

I'd much rather spend my money on camera equipment than on a car payment.

[janikphoto]

Originally Posted by d2creative

Putting the money away each month now, or paying monthly payments in 4 years, it's the same difference. Especially if you get a low or 0% interest rate. The only difference is you'll make .05% interest on your savings.
And then when you walk in and plunk down $30k all out once, two minutes later when you drive off the lot you've already lost at least $5k...

Yeah, but not everyone qualifies for 0% financing. Many times it requires you to do 24 month or under financing. Many people wind up spending 5 to 7%, and some people with bad credit wind up getting double digit percentage rates! So, for many people, paying cash WILL save them a lot. I had a friend with really bad credit who financed a car at 22%, which is insane!!!!!

And as far as losing $5k when you drive a new car off the lot... well, that's the trade-off for driving the newest, best car out there. INstead, buy one a couple years old and you'll avoid such a huge drop. You don't get the satisfaction of having a brand new car, but you do get the satisfaction of paying less for the car and insurance.

Originally Posted by ronocnikral

...plus, when you have cash, i feel that I have more power to negotiate (never not had cash though...).

This is incorrect if you are buying from a dealership, but probably correct if you are buying from an individual. If I were selling my car outright, I'd probably take another few hundred bucks off, if the guy/girl put cash in my hand.

However, dealerships plan to get a piece of the financing profit. If you pay straight-up cash, they no longer have that option. Many dealers will give you a lower price on the car, then try to confuse you during financing (by ONLY discussing monthly payments in detail instead of the final total after financing is added). They make back the money discounted on the car and then some through the financing. They also offer other things like extended warrantees and rust-proofing packages that have high profit margins.

If you really want the best deal on a new car, you do this: Go in, pick out a car, try to get the car's sticker price down as low as possible, and take their financing. While in financing, you can negotiate more off the sticker, so don't think that part of negotiations is over. Make sure there is no penalty for paying off the financing early, then when your first bill comes, just pay off the whole thing with your cash.

[Brains]

When it comes to cars, it is NOT about the investment -- unless you're talking about perhaps buying a '69 Camaro for $500 in 1989, doing a basic maintenance restoration for $5000, and selling it in $2005 for $60,000. BUT that's not realistic now is it? :)

No, buying cars is really about WANT vs. NEED. We want certain things from our cars, and everyone's list is different. We rarely need the vehicles we buy, regardless of the excuses we come up with to justify them to ourselves. I'm not different, I just accept that I love cars! We currently only have 5 cars between my wife and I, but we're looking to move 3 of those - ironically the three which are and have been paid off. Only 1/5 really gets driven on a daily basis, so we obviously don't need five cars. Keeping those "extra" three doesn't cost much, but we both feel its time to move on to other interests. I wager it is a lot like lens addiction. Do we really need that bag full of L glass? No, probably not. But we all find justification to buy it anyway. Don't think I haven't thought "once I sell this car, I can buy this lens, and that lens, ..."

[groovyone]

Originally Posted by BigC

How do you like the diesel? I already found a station a block from home that sells it.

It has been great. I am very pro-diesel vs hybrid, and this has not let me down. I bought mine when diesel was $1 more per gallon, and shortly after it dropped to LESS than regular. Pretty nice at 30+ MPG local, and I do not drive it gently. The car is actually fun to drive, and with the traction control off it can easily chirp the tires. Handling is a blast. I have taken 90 degree right turns at 30+ MPH just for fun. I really do enjoy driving it, and the torque is very nice.

On a run to IAH averaging 70-75 I can get 40+ MPG pretty easily and make good time. If you are more speed limit friendly you can get better.

One other advantage that may not matter any time soon in TX, it can run with certain biodiesels under warrenty.

I even chose to flog the wagon. I have the monster huge sunroof, and to me a 'sport' wagon is way cooler than an SUV.

[toverman]

I know someone who bought a Miata convertible, paid it off and then kept making the payments to himself. After a few years, he bought a BMW convertible. Whatever works for you, go for it. The insurance argument is a good one, that you can save by driving a paid-off used car rather than financing and carrying full coverage over the term. However you want to work it for yourself, go for it. Car payments stink.

So far I've been fortunate to buy pretty good cars (not fancy, but decent) that last. I drove my previous car for 8.5 years and only sold it because it lacked many of the safety features I wanted for our growing family. We saw the new owner driving it around for three years before she went off to college. Hoping my current ride will last even longer.

And echoing Keith's comments, wagons (even non-sport ones) totally rock!