What interest rate do you have on your most recent auto loan?

[QUIZZLE]

Just curious.

I might be having to venture down that road soon.

[ALBballer]

Just curious.

I might be having to venture down that road soon.

Why not buy a used car with cash?

Remember a car is an asset that depreciates quickly. If you need to go into debt to buy one then it probably isn't a great financial idea.

[BrooklynZoo]

Just curious.

I might be having to venture down that road soon.

4%

[Doctor Rivers]

Why not buy a used car with cash?

Remember a car is an asset that depreciates quickly. If you need to go into debt to buy one then it probably isn't a great financial idea.

There are a lot of variables, but generally financing the car will build your credit rating and if the interest rate is low enough, you might be better investing all the money you would be using to purchase outright.

[Doctor Rivers]

Just curious.

I might be having to venture down that road soon.

check out penfed or local credit unions for good rates

[glidedrxlr22]

1.85%

[nathanjizzle]

Why not buy a used car with cash?

Remember a car is an asset that depreciates quickly. If you need to go into debt to buy one then it probably isn't a great financial idea.

if youre a first time car buyer, its essential for your credit that you can prove that you can pay off a car loan.

if you do, than youre pretty much not getting denied on a home loan thats a reasonable price.

[ALBballer]

if youre a first time car buyer, its essential for your credit that you can prove that you can pay off a car loan.

if you do, than youre pretty much not getting denied on a home loan thats a reasonable price.

You know there are banks that give out loans based on income, down payment and other factors than credit?

I bought a house last year and never had a car loan or any sort of loan in my life. I put down a decent down payment (30% or so), my monthly payment was probably 1/3 of my income and I had a credit score of 700 or so. Granted I do have a credit card that i pay regularly and on time. My loan was from one of those big banks btw.

You are all falling for the trap of the mighty "credit" score.

[ALBballer]

There are a lot of variables, but generally financing the car will build your credit rating and if the interest rate is low enough, you might be better investing all the money you would be using to purchase outright.

Investing that money? The only issue is you are forgetting about risk.

Under your logic why not take out equity loans on your home and car? Bank will loan you the money at 3-4% and you can make 10%? Cha ching!$!$

[rezznor]

. 9

[Bandito]

I have a 4.6 interest rate.

[boozehound]

Why not buy a used car with cash?

Remember a car is an asset that depreciates quickly. If you need to go into debt to buy one then it probably isn't a great financial idea.
because, with a new car, you can get it without having 15k+ cash on hand. Interest rates continue to be very very low, so there is little reason to avoid a new car. Now, some cars do depreciate quickly, but the models I was looking into were ~70-80% of the new model cost at 4-5 years old.

My last two car loans were interest rates of 0% (Nissan) and 1.9% (Subaru).

[bdreason]

1.9%

[ALBballer]

because, with a new car, you can get it without having 15k+ cash on hand. Interest rates continue to be very very low, so there is little reason to avoid a new car. Now, some cars do depreciate quickly, but the models I was looking into were ~70-80% of the new model cost at 4-5 years old.

My last two car loans were interest rates of 0% (Nissan) and 1.9% (Subaru).

aside from the fact 70-80% seems like an exaggerated number because even the best cars do not even hold 70% after 3 years, all cars will depreciate over time. If you need to go into debt to buy a car then your wealth will be tied to a depreciating asset (hence you might become poorer over time assuming Ceteris parebis) not to mention the interest you will pay on it. Now if you have the cash to pay the thing then you can take the hit of depreciation. Otherwise you will be stuck with a depreciating asset you will be stuck paying for and most people will replace the car in a few years.

Another factor you are leaving out is the low interest rates are artificially increasing the demand of the cars and in turn increase the price.

But do as you wish OP it's your money. Just remember many millionaires (around 1/3 and those with a million dollar in assets) buy used cars and buy them for cash.

[DukeDelonte13]

There are a lot of variables, but generally financing the car will build your credit rating and if the interest rate is low enough, you might be better investing all the money you would be using to purchase outright.


Having upwards of 20k in debt does more damage to your credit than making car payments on time helps it.

The old "it helps build your credit" line is kind of true but kind of misleading. It's a sales tactic / self justification for making the big leap to undertake the debt.

What bankers look at for mortgages is how much you make, how much you have, how much debt you have, and how much you are looking to borrow.

[nathanjizzle]

But do as you wish OP it's your money. Just remember many millionaires (around 1/3 and those with a million dollar in assets) buy used cars and buy them for cash.


thats because they are already millionaires and dont need to build credit. Im sure they did when they were starting off. Most people do because they need to buy a house and possibly start their own business.

OP seems young and starting off, its best to build your credit up, you want to keep your options open in the future, maybe you want to buy a house or start a business.

[nathanjizzle]

Having upwards of 20k in debt does more damage to your credit than making car payments on time helps it.

The old "it helps build your credit" line is kind of true but kind of misleading. It's a sales tactic / self justification for making the big leap to undertake the debt.

What bankers look at for mortgages is how much you make, how much you have, how much debt you have, and how much you are looking to borrow.

no it doesnt. only in the interim of obtaining the loan will your credit drop, while you make payments, it increases and when you pay it off it ends up reflecting your credit better than it was before the loan.

People with A+++ credit scores have 10+ credit and loan accounts on their report. because through their time of having credit they proved they can pay off credit cards, multiple cars, miscellaneous loans, and houses.

[ALBballer]

[/B]

thats because they are already millionaires and dont need to build credit. Im sure they did when they were starting off. Most people do because they need to buy a house and possibly start their own business.

OP seems young and starting off, its best to build your credit up, you want to keep your options open in the future, maybe you want to buy a house or start a business.

Again with this credit. You can build credit with credit card and paying it on time.

Many of these millionaires build and maintain wealth by not investing a large portion of their wealth to depreciating asset.

[DukeDelonte13]

no it doesnt. only in the interim of obtaining the loan will your credit drop, while you make payments, it increases and when you pay it off it ends up reflecting your credit better than it was before the loan.

People with A+++ credit scores have 10+ credit and loan accounts on their report. because through their time of having credit they proved they can pay off credit cards, multiple cars, miscellaneous loans, and houses.

It's dumbfounding that you think having 10 credit and loan accounts is good financial practice. And it absolutely is not good for your credit if you have a car loan out. Your credit score is only aspect of the entire picture, and it matters far less than what you actually have versus what you owe to creditors.