Whoa, Nellie! Avg monthly payment > $700.

[DrewBronc21]

You don't save up. You get out of debt and become your own bank. You have the money because you are not paying on a house, car, credit cards, etc. You pay yourself, not the bank or credit cards, bank, etc. To borrow money to invest is nuts. I'm not pointing, but trying to get folks to see the errors of looking at loans as a way out.

the smart financial thing would be to not spend $47k on a car to begin with, but all these people pounding their chests that they only pay cash when you could get a 2% loan over 6 years and KEEP your cash and probably make a minimum 7% are disregarding math. These threads are on every auto forum. Paying cash is an emotional decision and has no financial merit unless interest rates are high . I will always take low or no down payment loan and keep my cash and if I decide to pay early, I can. I paid off my 2020 STi in a couple of years and paid almost no interest. It still wasn’t a smart financial decision but emotion got the best of me and I wanted to get the Bronco and not have 2 car payments but at the end of the day, 2 car payments with the cash in investments and not tied up in cars would still be the better financial move.

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[Tricky Dick]

If I hadn't put down 10k I'd be looking at over 700 too. My target was 600, and I came close at 620 for 65 months at 1.49. The below invoice deal helped too.

It helps tremendously that I only pay $750 for my mortgage, and that includes taxes and insurance. If I bought this house today it would be a $2000+ payment.

 

[FormerJeepJunkie]

You don't save up. You get out of debt and become your own bank. You have the money because you are not paying on a house, car, credit cards, etc. You pay yourself, not the bank or credit cards, bank, etc. To borrow money to invest is nuts. I'm not pointing, but trying to get folks to see the errors of looking at loans as a way out.

Call it what you want- it’s still exchanging money for an item. If you set yourself a budget of $x dollars to save for a car- that’s a payment to yourself. I can pay cash, sure. But that cash can be used for other things such as investment. If I get a loan for less than what I can make with my own money- that’s a smarter use of my money. Math doesn’t lie.

A car is a depreciating asset no matter how you look at it. My point is that the loan is not the expensive part. The vehicle is. As vehicle prices go up- the cost is the driver of the “payment” no matter what you are doing to procure funds for it. Unless you stole it- you’re paying an amount of __dollars in a formula that includes a set amount of time. That’s called a payment.

 

[Jazer]

you’re not in debt If you have the cash to pay it off at any time.

I do and that's true, but I'd rather not, lol!

 

[Roger123]

the smart financial thing would be to not spend $47k on a car to begin with, but all these people pounding their chests that they only pay cash when you could get a 2% loan over 6 years and KEEP your cash and probably make a minimum 7% are disregarding math. These threads are on every auto forum. Paying cash is an emotional decision and has no financial merit unless interest rates are high . I will always take low or no down payment loan and keep my cash and if I decide to pay early, I can. I paid off my 2020 STi in a couple of years and paid almost no interest. It still wasn’t a smart financial decision but emotion got the best of me and I wanted to get the Bronco and not have 2 car payments but at the end of the day, 2 car payments with the cash in investments and not tied up in cars would still be the better financial move.

And people that take out a loan so they can invest (which most people don't, they just buy more crap they don't need) are disregarding risk.

Would you take out a loan on a paid for house to invest in the market?

 

[FormerJeepJunkie]

the smart financial thing would be to not spend $47k on a car to begin with, but all these people pounding their chests that they only pay cash when you could get a 2% loan over 6 years and KEEP your cash and probably make a minimum 7% are disregarding math. These threads are on every auto forum. Paying cash is an emotional decision and has no financial merit unless interest rates are high . I will always take low or no down payment loan and keep my cash and if I decide to pay early, I can. I paid off my 2020 STi in a couple of years and paid almost no interest. It still wasn’t a smart financial decision but emotion got the best of me and I wanted to get the Bronco and not have 2 car payments but at the end of the day, 2 car payments with the cash in investments and not tied up in cars would still be the better financial move.

Yes- this. I think people confuse budget and payment way too much. Payment is simply the amount you exchange for an item if you figure in time. Budget is the cumulative amount of payments in a smaller period of time vs income.

 

[VoltageDrop]

Clint is kind of a dick.

He wouldn't be if you'd stay off his lawn.

 

[kodiakisland]

It's really pretty simple. If you can afford the payment, do it. If you can't, don't.

I've never been afraid of debt because I know I can pay it off. I'd rather live life to the fullest while young and able to do things than bust my ass to save cash just to say I don't have debt.

I traveled the world over several times when I was young on credit and paid it off when I felt like it. My retirement is fully funded. I'm still not scared of debt. When I'm old and decrepit I'll pay everything off, or I won't.

For those who never did anything except work overtime to pay cash for everything, bravo.

 

[M4Madness]

Am I the only one in the world who doesn't invest? Lol! I've got $40K in a savings account earning nothing. Well, maybe $10 a year. Granted, I have an IRA and a 401(k) that were both earning well until recently. I do have quite a few tangible assets, such as a 1969 Mustang, etc. and my mortgage balance is under $4K.

 

[kodiakisland]

Am I the only one in the world who doesn't invest? Lol! I've got $40K in a savings account earning nothing. Well, maybe $10 a year. Granted, I have an IRA and a 401(k) that were both earning well until recently. I do have quite a few tangible assets, such as a 1969 Mustang, etc. and my mortgage is under $4K.

If you don’t mind losing purchasing power, then holding cash is fine. There are some good reasons to have cash on hand. Many people however can’t afford cash and need to at least attempt to keep up with inflation.

 

[VoltageDrop]

Am I the only one in the world who doesn't invest? Lol! I've got $40K in a savings account earning nothing. Well, maybe $10 a year. Granted, I have an IRA and a 401(k) that were both earning well until recently. I do have quite a few tangible assets, such as a 1969 Mustang, etc. and my mortgage is under $4K.

If you have an IRA and a 401k then it sounds like you are investing. If you mean buying 0 DTE call options on Gamestop then I'd argue that's more gambling than investing, though such nonsense did buy all the accessories for my Bronco thus far

Cash might be a good move right now. I would've been better off not putting any money in the stock market over the last year or so and held it as cash but he who can time the market is a trillionaire.

 

[JAM]

The average monthly car payment crossed $700 a month earlier this year, the highest on record, according to Cox Automotive/Moody's Analytics.

"I joke with people that every new car purchase is a luxury car purchase, I don't care what you're buying," says Ivan Drury, senior manager of insights at the car buying expert Edmunds. The average cost of a new car is hovering at the highest level on record, topping $47,000 a pop.

Drury says get used to these prices: "We're not going to see a sudden drop-off in price anytime soon, because there doesn't seem to be any resolution for the chip crisis."

Will this put a damper on the market?

Average value of $47k for a car is insane to me. When I graduated college, I bought a brand new 2014 Ford Focus for $12.5k. It was bare bones with a manual transmission, but it felt like a luxury car compared to the ‘93 Ford Ranger I had been driving since I turned 16.

At this point in my career I feel comfortable spending more on a new Bronco whenever Ford gets their sh!t together and makes it. But what happened to the low dollar sedans that an average American could afford without breaking the bank?

 

[Buckaroo]

This whole thing is BORING. My basesquatch is cool AF. Can we talk about winch mounting options or something instead?

 

[Carolina Jim]

But what happened to the low dollar sedans that an average American could afford without breaking the bank?

The same article I quoted in the opening said the chip shortage has prompted automakers to funnel chips into their high-end vehicles to get the biggest return they can.

Of course, Ford has pretty much exited that segment....determining I guess, it has become commoditized (price-driven) and perhaps not compatible with their overhead structure.

 

[jaruss01]

It’s mostly inflation. Some value of things have outpaced CPI such as cars and others have outpaced it tremendously such as housing. There’s way more sticker shock in seeing what neighbors are selling their houses for than the growth of average car payments. The average mortgage payment is up massively and that’s spread over a 30 year term….which makes the average car payment breaching 700/mo on a much shorter loan term seem like a drop in the bucket.

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