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Zeta Taskforce posted:With all due respect (It’s never good when people start “With all due respect”) leasing is made for people like you. And by that I mean people with champagne tastes on a beer budget. Leasing is by far the most profitable way for the auto industry to sell cars. Most profitable for them automatically means most expensive for the consumer. But because you are not paying anything back (until you get to the end, when they might force you to) and you are just paying depreciation and some financing cost, it is cheaper and you can get into a car you otherwise might not have been able to afford. All very fair points. I should start by saying I work for an automotive group, I paid invoice on the car, not the bs "INVOICE PRICE!!!!!!!11" crap that they advertise, but actual invoice. I know this because I can see what we pay for all cars in the back end of our system. I could have bought a car as opposed to leasing but I had a very sour taste in my mouth after the last car we bought. I bought a car from Carmax and had a really lovely APR, I paid about $15k for a VW Passat, had it for ~two years, then tried to sell it back to them and they offered me $4,500. At this point I still owed like $13.5k on the car so I tried to sell it privately and had no luck. I know this entire situation is my fault and my fault alone for buying a car with a super high apr that was probably priced too high in the first place, but I still didn't want to be stuck in a car again. I ended up trading the Passat into the dealership where I bought my new car for $4,500 then paid $6k in cash and rolled the additional $3k into the car. Just to clarify, I have bought two cars from dealerships, the Passat and my lease (which is a nearly base model Subaru Legacy, not exactly champagne tastes IMO.) So being bitten in the rear end has more to do with buying used cars from individuals and having to pay for repairs, selling for cheap etc. Again, my fault, but I was tired of having used lovely cars with no warranty, especially since my wife drives it with our son. My credit hasn't been the best in the past, but its improving. I pay the same for a brand new 2011 Legacy that I paid for a 2005 Passat with endless problems, to me that is more than worth it. Sorry for the long winded response, I just wanted to clear up a few things. I think I made the right decision when faced with the circumstances, what do you think?
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May 1, 2011 17:27
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FISHMANPET posted:Ugh, my Discover card is about a year old with a $500 limit (they gave me a student card for some reason). Every month I hit that limit about halfway through the month, then pay it in full on my statement date. The rewards are great, but it's a hilariously low limit. I'm going to buy a computer and I don't even know how I'll rangle it on the card (have the cash, want to get the 1% rewards). Pay for half of it with your card and the other half with cash, then pay off the credit card half with the remaining cash. Boom!
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May 1, 2011 17:28
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Bojanglesworth posted:I could have bought a car as opposed to leasing but I had a very sour taste in my mouth after the last car we bought. I bought a car from Carmax and had a really lovely APR, I paid about $15k for a VW Passat, had it for ~two years, then tried to sell it back to them and they offered me $4,500. At this point I still owed like $13.5k on the car so I tried to sell it privately and had no luck. I know this entire situation is my fault and my fault alone for buying a car with a super high apr that was probably priced too high in the first place, but I still didn't want to be stuck in a car again. I ended up trading the Passat into the dealership where I bought my new car for $4,500 then paid $6k in cash and rolled the additional $3k into the car. So you did this? -13500 (remaining loan) +4500 (trade in value) +6000 (cash you paid) ---------- -3000 (amount you need to roll into the lease?) I've never understood leases, but after doing a bit of research it seems like a reasonable thing to do if you want a new car in 2-3 years or want lower payments for a short commitment. modig fucked around with this message at 19:57 on May 1, 2011 |
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May 1, 2011 19:43
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modig posted:So you did this? Exactly. I leased the car for three years so rolling the $3k into the loan as opposed to handing them $9k in cash made more sense to me.
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May 1, 2011 19:45
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FISHMANPET posted:Ugh, my Discover card is about a year old with a $500 limit (they gave me a student card for some reason). Every month I hit that limit about halfway through the month, then pay it in full on my statement date. The rewards are great, but it's a hilariously low limit. I'm going to buy a computer and I don't even know how I'll rangle it on the card (have the cash, want to get the 1% rewards). Welp, forgot that I actually came here to ask a question. If I call and ask for a credit increase, can anything bad happen? I imagine there will be a credit pull, but I don't really care about the short term impact on my credit score.
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May 1, 2011 23:47
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You can only do it once every 6 months.
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May 2, 2011 00:00
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Followed mint over to freecreditscore.com for the free trial and it turns out Experian thinks I'm listed as an authorized party on my Mom's Discover card. She called Discover up and they confirmed that I was an authorized party a few years ago but have been removed since then so I shouldn't be showing up anywhere on there. CreditKarma says I'm using 5% of my 6400 limit. Experian says I'm using like 41% of my 5400 limit. The thing is my actual BoA credit card, which is the only one I have, has a 2500 limit. The discover has a 2900 limit which is where the 5400 number is coming from, but what the hell @ 6400? I've filled out the dispute form online with Experian so hopefully that's cleared up soon. Any idea on if my score will be helped or hurt by the drop in overall credit limit AND increase in utilization (as far as creditkarma is concerned)? Any idea on whether it would be better to open up a 2nd credit card somewhere vs requesting an increase with BoA?
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May 2, 2011 02:28
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Bojanglesworth posted:Sorry for the long winded response, I just wanted to clear up a few things. I think I made the right decision when faced with the circumstances, what do you think? $4500 for something you paid $15000? Yeah they are ripping you off. I would have paid extra on it to get the loan balance down to book value at the same time I worked on improving my credit and then refinanced it down at the credit union. I then would have paid it off in full and and driven it for a few more years while I saved money to pay cash for a late model car coming off a lease. Hey you asked. Zeta Taskforce fucked around with this message at 04:24 on May 2, 2011 |
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May 2, 2011 04:19
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Zeta Taskforce posted:$4500 for something you paid $15000 for is a ripoff. I would have paid extra on it to get the loan balance down to book value at the same time I worked on improving my credit and then refinanced it down at the credit union. I then would have paid it off in full and and driven it for a few more years while I saved money to pay cash for a late model car coming off a lease. I did ask, but when you are a single income family with a newborn baby dumping money into a quickly depreciating six year old car isn't always the best plan. We owed $13.5k on it, by the time we paid that down to bluebook it would be even older and more worthless. Like I had said earlier, I am paying the same monthly payment on my 2011 Legacy that I was paying on a 2005 VW Passat. I won't even get into the problems we had with the Volkswagen, but having my wife stranded on the side of the road while pregnant with our son was not something I wanted to deal with any longer. The problem is that I bought it at carmax, they inflate their prices, charge high interest rates and won't budge on their buy back offer. I agree 110% that $4500 is a ripoff, but that is blackbook value on the car, even in excellent condition with 60k miles. Selling private party would have gotten me another grand or so, but the time it would take to do that would have me paying another months car payment and its hardly worth it to me to wait a month to get another few hundred dollars. edit: I don't belong to a credit union. The interest rate on the Passat was 16% (not a typo) and the interest rate on the Legacy is 4.8% I think I improved my credit pretty well during that two year span. Good decision or not, at the end of these three years my credit will be even better, my income will be higher and I won't have to worry about negative equity. Bojanglesworth fucked around with this message at 04:35 on May 2, 2011 |
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May 2, 2011 04:32
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So my wife (married 11 months now) has a silly amount of student loans because she went to medical school without being loaded (her mistake). Let's round it to 400k. The highest rate is 8.5% for around 60k, then another 100k or so at 8.25. We're paying it off without problem, but we also want to save for a house. Given that we both have good credit and current loan rates are around 5% (apparently?) should our excess income go towards student loans in order of highest interest rate first, and just make sure that we save enough to have a tiny down payment? Or should we shoot to have more cash for a house, aiming for 20%? We can't deduct interest from taxes. I figure the best way is to just barely have a down payment when we are looking to buy a house in 4-5 years, and put everything else towards the crazy interest rates.
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May 2, 2011 04:41
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Zeta Taskforce posted:$4500 for something you paid $15000? Yeah they are ripping you off. I would have paid extra on it to get the loan balance down to book value at the same time I worked on improving my credit and then refinanced it down at the credit union. I then would have paid it off in full and and driven it for a few more years while I saved money to pay cash for a late model car coming off a lease. You would have been stuck with a lovely broken car for another 3+ years, and at the end had similar equity (less than 4500 anyway). It's like poker in some sense, once the money is on the table it isn't yours anymore. Once he made a bad decision to buy the Passat with a lovely loan for too much money, he needs to be able to make good decisions without emotionally being held back by the idea of being losing his money." He apparently managed to end up with lower payments on a better car, that isn't breaking down. It sounds like he made a pretty good decision to me. I do wonder with the least about what sort of mysterious charges they will come up with after 3 years to inflate the cost/profit.
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May 2, 2011 15:21
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modig posted:You would have been stuck with a lovely broken car for another 3+ years, and at the end had similar equity (less than 4500 anyway). It's like poker in some sense, once the money is on the table it isn't yours anymore. Once he made a bad decision to buy the Passat with a lovely loan for too much money, he needs to be able to make good decisions without emotionally being held back by the idea of being losing his money." He apparently managed to end up with lower payments on a better car, that isn't breaking down. It sounds like he made a pretty good decision to me. This is an interesting conversation and I welcome this back and forth. I think it is reasonable to say that Bojangles put himself into a bad situation with the Passat and he had choices, but none of them were that great. It is also reasonable to say that a weird combination of factors made leasing start to look compelling. However I still would have come down on the side of keeping the Passat. One thing he said and you repeated I find unsettling. He has the same payment. You have to be able to afford whatever payments you have. That said, whenever you finance something, concentrating only on the payment amount gets people in trouble. A lender can make the payment practically anything by adjusting the term. It is worth noting that he had to come up with $6000 to achieve the same payment. One other inaccuracy is he said that he owned a rapidly depreciating car. His car already depreciated. Once cars hit a value of $4000 or $5000 and they are 4, 5 or 6 years old, they don’t lose value that fast anymore. He owned a slowly depreciating car. Think about it. A 2009 car will cost way less than a new one, but how much less does a 2004 cost compared with a 2005 with the same miles? Hint: Not much. The other thing is more of a personal preference, but people way overestimate the odds of being on the side of the road broken down, and way overestimate how bad it is. With today’s cars, the check engine light will come on way before it will break down, and even if you are broken down on the side of the road, everyone has cell phones these days. Get AAA and they will come get you. Heck, you should probably have AAA anyway. This isn’t 30 years ago when cars broke down with a lot more frequency and less warning and you had to walk to someone’s house and beg to use their phone. Being a single income family would make me more motivated to conserve cash and get out of debt, not less. I still would have paid down the car, refinanced it to a better rate, and held on to it. The other thing that concerns me, and I don’t know this for sure, is for his Passat to lose that much value, I wonder if he was putting a lot of miles on it, or if he lives in an area where dings and dents occur with high frequency. Both of those will cause the Subaru to lose value faster than the assumptions built into the lease, and he will either need to come up with a pile of cash when it gets done, or do a buyout and be back to square one with poor financing options to deal with a shitload of negative equity.
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May 2, 2011 16:31
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To contribute to the lease discussion, I can offer why we decided to lease my wife's car last year: the tax deduction. I'll put up front I'm not a tax attorney, and this was based off discussions with my accountant, so don't assume this is 100% correct. I have my own business, and 80-90% of my mileage each year is business related. If I owned the car, I could either take the mileage deduction for each business mile (50ish cents a mile I believe), or I could take all of my car expenses for the year and deduct the percentage of costs that relates to my percentage of business use. However, for what I understand, on our other car (which I own and will be paid off in a year), I was only allowed to deduct depreciation, rather than my total payments. With a lease, however, I can deduct each payment itself as a business expense. We did some simulation numbers, and deducting the lease payments made a significant impact on lowering my taxable income. For us it was worth the trade off in not owning the car. I also upgraded from my Maxima to a Lexus for day to day driving. My wife was not as happy with that deal as I was. She is counting down the days until I start working with a firm again and won't use the business expense so we can trade our cars back to their natural order.
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May 2, 2011 17:31
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Zeta Taskforce posted:This is an interesting conversation and I welcome this back and forth. I think it is reasonable to say that Bojangles put himself into a bad situation with the Passat and he had choices, but none of them were that great. It is also reasonable to say that a weird combination of factors made leasing start to look compelling. However I still would have come down on the side of keeping the Passat. My big question is, how is paying $6k off on the car, then trading it in any make any less financial sense than paying $6k off then keeping the car? The only difference I see is that now I have a brand new car for the same payment and not a six year old car that was plagued with problems the whole time I had it. If I paid the $6k off on the car, then kept it for another couple of years I have effectively thrown that money in the garbage because I will never see any bit of that. Paying that, then keeping the car would put me in 2014 with a nine year old car (Volkswagen no less) with over 100k miles. Getting out of it before it was too late was the best decision to make. As for it breaking down, I had three ignition coils go on the car, at three separate times, leaving my wife on the side of the highway either pregnant or with my very very newborn son, waiting for a tow truck. Each one of those times I had to pay my $150 "deductible" as well as the cost of the tow truck, because that's how my extended warranty was. When it comes to the car being in poor shape, the car got washed every week, waxed once a month and detailed after each season. As you can see it was in perfect shape, it didn't have one single door ding:  It also had 60k miles when I got rid of it. Not too bad for a six year old car, right? Yes, leasing isn't for everyone, but I work around the corner from my house and put 10k miles a year on my cars. As you can see above, I also take very good care of my cars. Getting hit with "hidden costs" at the end seems highly unlikely. As I have mentioned once or twice, the car hasn't necessarily depreciated as much as it seems. I paid $13k, plus taxes, tags, all that other crap, and to top it off I had 16% APR. After two years of paying my payments I still owed more than what I "paid" for the car.
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May 2, 2011 17:48
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Bojanglesworth posted:Clearly you have a personal vendetta against leasing, not everybody who leases a car has made the worst decision of their life. Did leasing kill your grandpa or something? You just went from 'foolish' to 'rear end in a top hat' FWIW.
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May 2, 2011 17:52
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traveling midget posted:You just went from 'foolish' to 'rear end in a top hat' FWIW. Thanks for your input. I am so tired of the whole 'leasing is for poor people who are mentally retarded' thing that everyone believes in. If leasing isn't for you that doesn't mean that when someone leases they are an idiot.
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May 2, 2011 17:57
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Your foolishness didn't start with the lease.
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May 2, 2011 17:58
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Voodoofly posted:To contribute to the lease discussion, I can offer why we decided to lease my wife's car last year: the tax deduction. I'll put up front I'm not a tax attorney, and this was based off discussions with my accountant, so don't assume this is 100% correct. The tax deduction for self employed makes leasing less bad. That is different than saying it is the most financially prudent thing to do. The only time I would disagree with that statement is for professions like real estate agents where you are driving clients around in a car and having a really nice one shows that you are a baller, AND leasing is the ONLY way to get into a car that won’t embarrass you, then leasing makes sense. But even then, if you can afford to buy it, you should. But you still run into the same problems with leases along with some new business related ones. If you have to drive long distances to get work or your business picks up, you could end up driving that Lexus into the ground. Please realize that your choices would be to write a big check at the end, or buy it out and have instant negative equity. I would rather you were driving the Maxima. The reason your taxable income went down is because your business expenses went up. Unless you are in a 100% tax bracket, you will never recoup all your increased expenses on your taxes.
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May 2, 2011 18:01
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Bojanglesworth posted:If leasing a Subaru is better than buying an overpriced Volkswagen at 16%, it is because the latter was such a profoundly bad deal that almost nothing would be that bad. Reasonable people can disagree. No, you are not going to convince me. I’m unlikely to convince you. I’m a loan officer and I see too many people with leases that ended in ways they didn’t expect, and others who use it as a way to live beyond their means. At this point its left to everyone reading this to make up their own minds what is best for them, just as you did.
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May 2, 2011 18:25
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Zeta Taskforce posted:If leasing a Subaru is better than buying an overpriced Volkswagen at 16%, it is because the latter was such a profoundly bad deal that almost nothing would be that bad. I wholeheartedly agree with this statement. Had I not been so upside down on the Passat I would have purchased, I just couldn't justify either keeping the VW or paying probably double the payment if I purchased a new car.
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May 2, 2011 18:38
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Zeta Taskforce posted:But you still run into the same problems with leases along with some new business related ones. If you have to drive long distances to get work or your business picks up, you could end up driving that Lexus into the ground. Please realize that your choices would be to write a big check at the end, or buy it out and have instant negative equity. I would rather you were driving the Maxima. The reason your taxable income went down is because your business expenses went up. Unless you are in a 100% tax bracket, you will never recoup all your increased expenses on your taxes. It is actually the opposite for me (if I was putting huge miles on the car it would be a horrible loss for me). I tend to drive about 3k to 5k a year, and like I said 90% of that is business. In the long run I'm still losing money, but shifting the deductions up front makes a significant impact on my current finances, and since this happened right when I was starting my business (I realize it must have been over two years ago now) I was more than happy to shift current expenses to future expenses while I attempted to get things off the ground. Basically I was willing to take a loss down the road if it insured I could stay afloat for the first year of practically unpaid work building a client base. I figured if I was still in business long enough to see that loss then I had won. I'm an attorney, so there is some image value with the car, although that is only a side benefit for me (I don't normally care about pulling up to meetings in my Maxima). This is also all hypothetical, because a year later I started working on a side project in Vegas anyway so I've been driving the Maxima into the ground for that commute (using the Lexus for my own work back in Los Angeles in an attempt to maintain seperate identities for my own firm and work I do as an independent contractor). However, when we made the lease decision that wasn't in the pictures. I am glad to receive the advice and comments, though. In hindsight I'm not sure I would have gone the lease route, but I wanted to at least give another approach to "why would someone lease a car."
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May 2, 2011 18:38
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Bozart posted:So my wife (married 11 months now) has a silly amount of student loans because she went to medical school without being loaded (her mistake). Let's round it to 400k. The highest rate is 8.5% for around 60k, then another 100k or so at 8.25. We're paying it off without problem, but we also want to save for a house. Given that we both have good credit and current loan rates are around 5% (apparently?) should our excess income go towards student loans in order of highest interest rate first, and just make sure that we save enough to have a tiny down payment? Or should we shoot to have more cash for a house, aiming for 20%? We can't deduct interest from taxes. This got buried in lease discussion, but I wanted to make sure this got covered: Doctors have access to loan instruments that most people can't get. This means low interest rates, no PMI regardless of equity in the property, etc. Because of this, assuming her credit is good, you will likely find house rates that make it a better idea to pay the loan down faster and have less of a down payment then to try to save the 20% down payment. That said, no reason to keep all your eggs in one basket. Your rates are low enough that growing a cash reserve for a couple years won't matter much either way, so go ahead and save up some cash for a downpayment. If it turns out that the rules for docs change, then you'll be in good shape anyway, but if I'm right and houses are still cheap, take the money you saved and throw it at the student loans then. Voodoofly posted:To contribute to the lease discussion, I can offer why we decided to lease my wife's car last year: the tax deduction. THIS is why it makes sense to lease a car: if your taxes work out such that you can deduct the full cost of the car lease (vs. the simple depreciation), it's almost always worth it to lease rather than buy. Businesses do this all the time for this exact reason - it's a straight top-line adjustment and saves beaucoup bucks. Admittedly, most people (ie Bojanglesworth) aren't in this situation and therefore leasing is a bad idea, but if you can swing a car lease into a running business expense, you're in pretty drat good shape.
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May 3, 2011 04:00
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T0MSERV0 posted:THIS is why it makes sense to lease a car: if your taxes work out such that you can deduct the full cost of the car lease (vs. the simple depreciation), it's almost always worth it to lease rather than buy. Businesses do this all the time for this exact reason - it's a straight top-line adjustment and saves beaucoup bucks. Am I missing something from the lease discussion? First off, it's a PASSAT, that's your first problem. I'm not a car guy but anyone who has done any pre-carbuying homework will tell you not to buy Jeeps and Volkswagons. They depreciate like mad because they are poorly constructed and break down constantly. They stay in business because of the great marketing, but they are not great cars to own (or lease). Second, if you put money into your car, you would have had something, namely a car. When your lease is up, it's up. You have nothing to trade in/sell/keep driving. At least when you buy a car, if you can't afford to buy a new car at the end of 48 or 60 months when your loan is up and it's paid off, you can still drive your car. The biggest problem that has not been discussed in the lease v. buying discussion is the biggest part of it. YOU HAVE NO EQUITY. You may get more car for the same money over the first 36 months, but once you pay off, you can wait to get a new car or sell your old one. Compare the total cost of leasing with the cost of owning the same car. Example, Hyundai Elantra 2011 GLS. $17,080 for A/T @ 4% financing and $1500 down, that's $460/mo for 36mo for $18,060. And then at that time though, you own a 3 year old car. According to KBB, they project it will be worth $8,081 in 3 years if you put 15,000mi a year. This means that you would pay $9,979 for the 3 years or $.2218/mi. To compare, a 36 month lease (online won't let me set the mileage) would be $284/mo That's 175 less a month! YAY! Not so fast my friend. 36 Months, and the $1500 downpayment come to $11,724 or $.2605/mi. It costs 17% more to lease THE SAME CAR, and you have no flexibility and way more risk. If you put $175/mo in a savings account for 36 months, you'd only have ~$6500 after 3 years. You're still in the hole. If you wanted a new car in 2014, trade-in/sell the car you own for the $8,081, add your same downpayment of $1,500 and now your next car costs $7500. Your next car's monthly payment would be less than a lease, and you would own it. We are in the Personal Finance Thread, not the hey I'm a baller look at me sweet ride thread. Leasing (with possibly the exception of a business) is a stupid financial decision. KennyG fucked around with this message at 18:49 on May 3, 2011 |
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May 3, 2011 18:41
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KennyG posted:Leasing (with possibly the exception of a business) is a stupid financial decision. I'm not defending leasing, but the usualy reason why it's a bad idea is because people are retarded at math and it's not as simple to find out your costs, not because it's a worse deal. It's actually even if everything else is even, there is just a huge market in making sure it's not.
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May 3, 2011 18:54
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I had a quick credit card question. I paid my current balance off on May 1, but later that day (after 5 PM EST) I found that some pending charges had been added to my current balance. If I made the payment it would count for May 2, so I called and they said that since my statement closes on the 4th, I didnt need to worry about paying interest because the charges would be due June 1. Am I understanding this right? Sorry, Im still in college and learning my way around finance. Also, this is my only credit card and it's max is $300. I have always paid it off on time. Do I really need to worry about using more than 30% of it? Thanks for the thread guys.
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May 3, 2011 23:49
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EDIT: If you want to avoid paying any interest, I would still pay off the statement balance as reported after the 4th. I'm not a CC insider but I don't think you need to worry about credit utilization unless you are specifically looking for an apartment / getting a loan / etc at the time. You should also get in the habit of calling the number on the card every 6 months and getting your limit bumped up (assuming it's not a secured card, in which case see if you can get it converted to unsecured). Ulf fucked around with this message at 00:25 on May 4, 2011 |
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May 4, 2011 00:20
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T0MSERV0 posted:This got buried in lease discussion, but I wanted to make sure this got covered: Doctors have access to loan instruments that most people can't get. This means low interest rates, no PMI regardless of equity in the property, etc. Because of this, assuming her credit is good, you will likely find house rates that make it a better idea to pay the loan down faster and have less of a down payment then to try to save the 20% down payment. Thanks for this! I had no idea that there were specialized loans, but now it makes sense since they basically can't be involuntarily unemployed. The higher interest loans that she has are definitely first on the chopping block though - I can't possibly get an 8.5% risk free return on money anywhere but there. We have a solid nest egg and 2 sources of income, so I'm thinking we'll just chop away at the higher rate stuff. This is going to be a huge load off of her shoulders - she has felt that she was a drain on us because she has a lot of student debt and residents don't make much money. Her life is stressful enough. A seriously heartfelt thanks.
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May 4, 2011 05:07
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What are thoughts on on getting store cards for those 0% interest for X months, even if you have the cash for the purchase? I'm thinking of getting a $400 laptop at best buy, and they're offering 0% for six months, which would be cool, as I'm always going to get some furniture this week, and spreading that out would give me a bit more breathing room. Plus, more credit cards for me to stay current on and not gently caress up  Would having more cards that are all current improve my score any over having fewer, considering that in the past I haven't always kept current. Though for that matter how long before that stuff gets reported? In the past I've been late by a few days, which is probably enough to make the credit card companies happy, but not bad enough to report.
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May 4, 2011 20:04
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FISHMANPET posted:What are thoughts on on getting store cards for those 0% interest for X months, even if you have the cash for the purchase? You realize that the slightest fuckup on the 0% offers results in all back interest being charged retroactively right? They are basically designed to trap people like you who are prone to loving up every now and then.
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May 4, 2011 20:47
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When I worked computer sales I used to love selling store cards because people who would normally buy the $500 notebook would always buy the $1200 notebook if they got approved for the card. Don't do that. Edit: My point is, at our stores at least, customers spend on average 20% more on a purchase with a store card than without. Having access to easy credit usually enables people to purchase items they otherwise would not if paying in cash. FCKGW fucked around with this message at 21:39 on May 4, 2011 |
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May 4, 2011 21:31
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FISHMANPET posted:What are thoughts on on getting store cards for those 0% interest for X months, even if you have the cash for the purchase? People always ask back “Well I have the money in the bank, isn’t it smart to leave it there earning interest and then I get to use the stores money interest free?” With interest rates hovering somewhere around 1% at best, your $400 in the bank will earn somewhere around $2.00 over 6 months. A whopping 33 cents a month. And people think they are a genius like they outsmarted the store or something. And BorderPatrol is right so many times over about the tendency to overspend. And stop trying to tinker around with your credit. Its not like you can dilute your bad credit by opening up tons of stuff. Only time and good behavior will fix it. Finally, if you have to stretch out a $400 purchase, you can’t afford it! And I’m not even going to ask what furniture you can’t go on craigslist to buy!!!!!!
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May 4, 2011 21:46
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FISHMANPET posted:What are thoughts on on getting store cards for those 0% interest for X months, even if you have the cash for the purchase? On top of what was already said, if buying a laptop and furniture caused me to not have breathing room, I would not purchase those items.
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May 4, 2011 23:15
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Zeta Taskforce posted:And I’m not even going to ask what furniture you can’t go on craigslist to buy!!!!!! 
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May 5, 2011 02:37
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I'm not in any kind of dire straits, and buying this stuff isn't going to leave me with $6 in the bank. If I paid for it all with cash I'd still have plenty left over. Also, the days of not paying are years behind me, that aspect doesn't worry me. I'm also not going to base my decision on what it does to my credit, unless it's horribly damaging (which it isn't). It's nice to see the hive mind come out in force, though I can understand the reasoning.
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May 5, 2011 03:15
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It might help if you provided some more actual numbers (like what you intend to spend on furniture and what you have in hand) so that people can give you informed advice? When you use phrases like 'breathing room', it invokes a whole image of someone trying to juggle their finances to avoid emptying/overdrafting their accounts. So that's what people are going to respond to.
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May 5, 2011 14:35
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"breathing room" to me is 6 months expenses for "oh poo poo I got laid off," $5k for "oh poo poo I need a major house repair/insurance deductible", $1.5k for "oh poo poo I need a major car repair," $500 "oh poo poo my cat needs an emergency vet visit," etc. It's taken a long time to get there, but money emergencies are the last thing I worry about. I know not everybody has this luxury, but even a few grand in the bank helps in dealing with emergencies as they pop up. Going through the Dave Ramsey course with my wife before we got married was probably the best thing we could have done for our marriage. I'd highly recommend it to anyone wanting to get their poo poo in order. Just gloss over and ignore the jesus-stuff if that's not your thing.
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May 5, 2011 15:39
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Zeta Taskforce posted:A lender can make the payment practically anything by adjusting the term. It is worth noting that he had to come up with $6000 to achieve the same payment. Interesting lease conversation, but now I want to learn about the feasibility of my car buying diabolical plan. You mentioned that you are a loan officer, so I think you'll have some idea if this could work. As you said, the loan officer can set the payment to whatever they want more or less by adjusting a loan. So lets say I go in to buy a $20,000 new car, and I say that I can afford $500 per month payment, but that my Dad won't let me buy then car unless the base price is below $15,000 (I'm making up the numbers). Will they sell me the car at well below value if I let them get me however they want with a lovely loan with high interest? Then, I just pay off the loan immediately with cash from my bank account. My guess is this usually wouldn't work, but I'd like to hear your thoughts.
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May 5, 2011 16:04
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FISHMANPET posted:I'm not in any kind of dire straits, and buying this stuff isn't going to leave me with $6 in the bank. If I paid for it all with cash I'd still have plenty left over. Don’t do something because BFC told you to do it. Or because Dave Ramsey, Suze Orman, or some book told you to do it. Make your own decision. Chin Strap told you how you do one thing wrong and suddenly it becomes 25% charged retroactively. BorderPatrol told you he saw first hand how people overspend when they have access to these deals. I told you that even if everything works out, you will make somewhere south of $2.00 in interest. I doubt you will be able to say something that will change our minds, but it’s not like my opinion counts. You are educating yourself here; that’s good, but like the leasing discussion, the decision is entirely yours.
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May 5, 2011 16:08
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modig posted:Interesting lease conversation, but now I want to learn about the feasibility of my car buying diabolical plan. You mentioned that you are a loan officer, so I think you'll have some idea if this could work. As you said, the loan officer can set the payment to whatever they want more or less by adjusting a loan. So lets say I go in to buy a $20,000 new car, and I say that I can afford $500 per month payment, but that my Dad won't let me buy then car unless the base price is below $15,000 (I'm making up the numbers). Will they sell me the car at well below value if I let them get me however they want with a lovely loan with high interest? Then, I just pay off the loan immediately with cash from my bank account. My guess is this usually wouldn't work, but I'd like to hear your thoughts. Let me rephrase what you are asking and flesh it out with numbers. You are saying that you want to buy a car worth $20,000, and suppose you finance it at 5% for 4 years (at $461/mo) and that works within your budget. Your dad is saying that $15,000 is enough car for you and he doesn’t want to see you in anything more expensive than that. Are you wondering if the dealer will sell you the $20,000 car for $15,000, but be willing to finance you at 20.5% (and give you a payment of $461)? If I read that right, then no, I doubt it.
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May 5, 2011 16:15
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FISHMANPET posted:I'm not in any kind of dire straits, and buying this stuff isn't going to leave me with $6 in the bank. If I paid for it all with cash I'd still have plenty left over. Well, sometimes the hive mind is right. Being good with money is a behavior modification, not shuffling around cards and drawing out 0% financing as long as you can. Why are you wasting all this time and effort trying to "game this system" on something that doesn't even matter? The credit companies aren't dumb. They offer a 0% interest because you will spend more money.
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May 5, 2011 16:34
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