Author Topic: CrazyCarPeople: Looking to get a 24 month term personal loan for 10-11k @ 3%  (Read 5081 times)

GoStumpy

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http://forums.vwvortex.com/showthread.php?6012076-Personal-loan-to-get-car-rather-than-finance..-Bad-decision-P

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16k Vehicle, private dealer offers financing (Yeah right.)

Looking to get a 24 month term personal loan for 10-11k @ 3%

I net 4.2k+ monthly. What would you do?

Car is paid in 2 years and will have minimal depreciation for resale if I'm bored by then.


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It's a 77,000 original miles 1987 GNX. 1 owner. I have no student debts or outstanding bills. I'm 24 just finished school and believe I can match the payment's with savings easily and will meet my mortgage down-payment goal more than easily while I continue renting for 2 years.


Ohhhhh so funny!

Forcus

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http://forums.vwvortex.com/showthread.php?6012076-Personal-loan-to-get-car-rather-than-finance..-Bad-decision-P

Quote
16k Vehicle, private dealer offers financing (Yeah right.)

Looking to get a 24 month term personal loan for 10-11k @ 3%

I net 4.2k+ monthly. What would you do?

Car is paid in 2 years and will have minimal depreciation for resale if I'm bored by then.


Quote
It's a 77,000 original miles 1987 GNX. 1 owner. I have no student debts or outstanding bills. I'm 24 just finished school and believe I can match the payment's with savings easily and will meet my mortgage down-payment goal more than easily while I continue renting for 2 years.


Ohhhhh so funny!

Man I don't think I outgrew that thinking until recently. Heck I still *really* want to buy (e.g. finance) a new Kubota BX25 compact backhoe loader but my gut knows it is a dumb thing to do. At least the Vortex is giving him somewhat sound advice...

Rangifer

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Not a bad choice of car though. Those things have been steadily increasing in value.

kendallf

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I love the Buicks and have had GNs for many years.  The problem with buying (especially a low mile) GNX for an investment is that you really don't want to drive it and knock the value down, and if you do occasionally drive it, having the car sit so much means maintenance issues that quickly eat any "investment" appreciation.

I'd rather buy and fix up relative beaters, get some hobby enjoyment out of that while keeping the cash cost low, and then (usually) making most of my money back when I sell.  I have a GN in the garage right now that I paid $2k for.  It was painted pimptastic candy apple red and has speaker holes all through the interior panels, but otherwise has a relatively sound body. 

I'm under no illusions that my hobby is a particularly Mustachian one even so, but at least you can limit the bleeding.  :-)

Forcus

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Not a bad choice of car though. Those things have been steadily increasing in value.

It it's a true GNX might be worth a lot more. I was thinking about it, could be a a decent investment for the right person. If he a) lives in an apartment (so, assuming no garage facilities), and b) has to borrow the money to invest, unless it was a slam dunk on return, I wouldn't touch it. Though I could think of worse things to borrow for. Like a new car.

Spork

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Man I don't think I outgrew that thinking until recently. Heck I still *really* want to buy (e.g. finance) a new Kubota BX25 compact backhoe loader but my gut knows it is a dumb thing to do. At least the Vortex is giving him somewhat sound advice...

LOL. 

My most expensive vehicle has a top speed of 13mph.  (Kubota L3400)  ...but I at least didn't finance it.

Rural

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Man I don't think I outgrew that thinking until recently. Heck I still *really* want to buy (e.g. finance) a new Kubota BX25 compact backhoe loader but my gut knows it is a dumb thing to do. At least the Vortex is giving him somewhat sound advice...

LOL. 

My most expensive vehicle has a top speed of 13mph.  (Kubota L3400)  ...but I at least didn't finance it.

Oh, god, that's also true of us, though I don't know that our old JD 410 would do 13mph. When it was new, maybe, but I wouldn't want to try it. Also not financed, though we were willing and took a bank letter of credit to the farm auction with us when we bought it...

Imagine this, but add about 20 years:


http://jcpequipment.com/410D.html

Spork

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Man I don't think I outgrew that thinking until recently. Heck I still *really* want to buy (e.g. finance) a new Kubota BX25 compact backhoe loader but my gut knows it is a dumb thing to do. At least the Vortex is giving him somewhat sound advice...

LOL. 

My most expensive vehicle has a top speed of 13mph.  (Kubota L3400)  ...but I at least didn't finance it.

Oh, god, that's also true of us, though I don't know that our old JD 410 would do 13mph. When it was new, maybe, but I wouldn't want to try it. Also not financed, though we were willing and took a bank letter of credit to the farm auction with us when we bought it...

Imagine this, but add about 20 years:


http://jcpequipment.com/410D.html

I regularly (like every 3-4 weeks during growing season) drive mine 5 miles to mow my MIL's place.  13 is about right.  Cyclists giggle and wave when they pass me.

Forcus

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I'm totally jealous of both your machines (although anything more than a subcompact loader is too big for my needs).

Rural

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Heh. I know one you can have for around five grand in another year or so. Assuming I can convince my husband to part with it, of course.

Forcus

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Heh. I know one you can have for around five grand in another year or so. Assuming I can convince my husband to part with it, of course.

Unfortunately I was born and raised with a significant bias against green machines :)

MrsPete

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Bad idea.
Very bad idea. 

- You have two cars already; thus, this is far from a need.
- This car is not a practical choice:  It's over 25 years old and won't be cheap to keep.  Again, it serves no need.
- You say you may find yourself "bored" with this car in two years.   
- You'd have to borrow to buy this car.  Even if the interest is low, it's still money going out of your pocket.
- You're recently out of school and "believe" you can make the payment easily.  That's hardly a ringing endorsement.
- You're young, and the money you save in these first years out of school has the longest to grow.  The secret ingredient for  making compound interest work in your favor is TIME.  You have that on your side, but if you splurge on toys right now, you'll throw away that precious asset. These are your years for brown-bagging your lunch, going longer between hair cuts, and watching your pennies grow.  You'll find as you save that your first $100,000 is hard to save -- it seems to take forever -- but once you have that figure in your portfolio, it begins to take off.  The point: The sooner you reach that point, the better off you are. 
- You're renting -- did I understand that right?  You also mentioned mortgage pay-down.  But your money should go FIRST to appreciating assets, and then to depreciating, just-for-fun assets only when you're financially secure. 
- You said it yourself:  You're rationalizing this purchase.  Anytime you have to do that, you already know it's the wrong choice.

Something I tell my students all the time:  Never trade what you want most for what you want most right now.