Thats kinda what I figured, just looking for other input. Looking around there is really nothing I would want to live in long term without settling so I will just ride out a bit longer on the rent train so I can get a nice house with a garage.

12/16/2008 3:31:19 PM

Quote :

"I'll assume you are sinking 10k into a car that you'll pay for cash. Once you pay that 10k, it's gone, you can think of it as equity in something that is now depreciating heavily"

This is actually why I did not, even though I had 6k avaliable, put a down payment on my car.
I got a 3.9% financing on my car. I then took my down payment money and put it in a CD ladder at rates
varying from 3.25-4%. I did the math and it only came out to paying an extra $300-$400.

But now if something happens where i need money fast I have this cash in CD's not in the hands of Audi Financing during
an emergency.

When the stock market turns i will use these CDs to invest at their maturity.

Quote :

"I dont want to "rent" my lifestyle where I own nothing but can afford to make the monthly payments on everything. "

I am not leasing. So my monthly car payment is actually partially capital after subtracting interest and depreciation.
With my situation I need to get a car ASAP or I was going to be spending $2K to keep my civic rolling a couple more years.
The car was 12 years old and 170K. Rather than "settling" for some average car; I said fuck it and got something I would enjoy; knowing
i could afford it with the job i was about to start.

Quote :

"stupid thing to do, and wreck it on the drive home.. im upside down."

I pay an extra $8 a month for the GAP; and I plan to drop it at 6months when my first CD expires which I am using
as an extra monthly payment.

12/16/2008 6:05:05 PM

Hur, im not knocking your decision lord knows Ive fought off buying a 3 series a couple months back, but if you dont mind can you tell me how long and how much you financed on the car?

Oh, when I said "renting" a lifestyle I wasnt talking about leasing. A lot of people are making payments on everything from tvs to cars. The reality is they dont own these until they are paid for. So if for some reason you stop making payments.. you lose said item. Just like if you stop paying rent, you lose your apartment. "renting" your lifestyle is a term mainly for those that have montly payments on basically everything they own, not really for those who have a couple debts they pay on.

[Edited on December 16, 2008 at 6:14 PM. Reason : .]

12/16/2008 6:11:19 PM

574 for 60 months

but its a nominal ~$480 had a put down the money i had for downpayment instead of saving it.

^ I do agree. I find it ridiculous that people finance a new TV purchase, computer, or (feel in the blank) other non-essential purchase. I paid cash for my flat panel TV. I think the only situation this is "ok" is if something essential breaks like your A/C during the summer or say your Washing Machine.

12/16/2008 6:40:11 PM

what was the buy price? I take it you got a G series? Great cars congrats.

12/16/2008 8:24:01 PM

thanks; A4 2.0T quattro 6-spd w/ S-line package

29995

12/16/2008 10:51:19 PM

I have all of my student loans at 3.61 except for everything starting spring 2005. The respective interest rates from that point are: 5, 5.8, 6, 6.8. Luckily those are only about 30% of my total student loan debt. I have about 30K in loans at the 3.8% interest rate.

My question, if anyone knows, is if you can consolidate only a portion of the student loans. In my circumstance I would want to consolidate about 13.5K, but leave the other 30K or so at the 3.61 interest rate.

What are consolidation interest rates going for right now?

12/16/2008 11:50:18 PM

i dont think i could let myself spend $30k on a car. and thats not meant to be any offense to you, everyone has different stuff they enjoy. I'll probably need/want a new car in 3 or 4 years and i plan to get probably get a used Honda for $15k or so. I'll never find a deal like I got on the car I have now though.

Never titled, only driven by pontiac employees and short dealer rentals(not a pontiac fan but the deal was good and ive had virtually 0 problems with the car in 7 years knock on wood), 20,000 miles, 1 year old when I got it for $9500 i think including all costs. Its hard to find them now for much less than that with low miles for the same year haha.

[Edited on December 17, 2008 at 12:01 AM. Reason : ]

12/17/2008 12:00:24 AM

Hur, Im an idiot, you did say audi. For some reason I thought infiniti. I really like the new A4s. Im going to have to wait awhile before I look for myself a new car. The good news is by then there will be some used for me. Have you had any problems with you audi? It concerns me they are a volkswagen as far as reliablity and how quickly the volkswagens seem to age.


But to my point, you are going to pay 34440 for a car that costs 30. And probably are upside down on. Im not saying its a terrible thing to do, its what the vast majority of people shop for when they buy a car... to see if they can afford the payment. However, I just hate having the burden and would rather pay for it up front or very quickly. That way if something does happen to my income Im not worried about a bill coming or losing my car.

12/17/2008 9:52:31 AM

Look, I don't think you are understanding the opportunity cost of money. Or, you are and are just hung up on having to pay more for something because of finance charges. Also, you aren't upside down until you are actually trying to sell the asset. Whether you pay it all now or over the life of a loan, at the end of the loan period, you still own the asset. Hell, cars depreciate so quickly that within 1 month you can't get back what you just bought it for (on your average car), so by your logic, no one should finance a car, ever.

Play with the numbers yourself
http://www.bankrate.com/brm/calc/cdc/CertDeposit.asp

For awhile this past summer and very often last year, you could get 0% financing on new cars. If you wanted a new car that cost 30k, you could either pay it up front, or you could stick that 30k in a 5 yr CD at 5% interest (certainly achievable this past summer) and come out 8 grand to the better at the end of the loan. Why wouldn't you go this route? If you do the rolling ladder like HUR mentioned, you get to lock in your gains on shorter time periods (though at lower interest rates) so if you do get into a bind you can get at your 30k if you need it and not lose all your returns. If you get into a bind with 30k sunk into your car, you're either stuck taking out a loan anyway (most certainly at rates higher than 0%) or you have to sell the car at a heavy loss because it depreciated.

[Edited on December 17, 2008 at 10:03 AM. Reason : .]

12/17/2008 9:57:34 AM

Quote :

"My question, if anyone knows, is if you can consolidate only a portion of the student loans. In my circumstance I would want to consolidate about 13.5K, but leave the other 30K or so at the 3.61 interest rate. What are consolidation interest rates going for right now?"

somebody on page 1 suggested http://loanconsolidation.ed.gov/

I would assume you could consolidate some of the loans. The interest rate is basically a weighted average of all your loans being consolidated.

[Edited on December 17, 2008 at 10:00 AM. Reason : ]

12/17/2008 9:59:37 AM

to the OP



Save some money, make payments on student loans, buy a car

12/17/2008 10:01:32 AM

You could buy an apartment/condo/townhome and still pay off the loan fairly quickly. If you buy before june, you will likely qualify for what is basically an interest free loan from the fed gov for up to $7500.

if you wanted you could pay off most of the student loans with that....essentially replacing a principle+interest payment with just principle payments...and you're likely to not even feel that payment, since the tax deductable money from the interest payments on your home will more than even out the $500 payback each year.

if you could find a townhome you like for around $110,000 and don't mind living with a roomate, you could easily live comfortably while still getting the loan paid off @ $35,000/year. problem's gonna be getting the initial home loan.

[Edited on December 17, 2008 at 10:34 AM. Reason : .]

12/17/2008 10:33:38 AM

Quote :

"Also, you aren't upside down until you are actually trying to sell the asset."

Wrong, you are upside down when you owe more than its worth. Now it becomes a pain in the ass when you try to sell it, but you are still upside down regardless of your intent to sell.

Quote :

"Hell, cars depreciate so quickly that within 1 month you can't get back what you just bought it for (on your average car), so by your logic, no one should finance a car, ever. "

Wrong again. There is a crazy thing called a down payment, couple that with a short finance period and you can prevent yourself from being upside down on your car. By my logic you should NEVER purchase a car with no money down and a long repayment time. Its too easy to get yourself in trouble.

Say after a year you owe 20k on your car but its only worth 15k. You lose your job and cant afford the car payments. In order for you to sell that car you need to come up with the 5K difference, bc the BANK owns your car until you pay the note off and it wont release the title without having it fully paid off.

Here is a real life example. My good friend in charlotte got into a wreck in charlotte. It was his fault and the ins. company declared her car totaled. They paid her 6k. So then the lady called my friend and said that she needed 3k from him. He asked what for and she said that she owed 9k on her car and the ins only paid 6k. LOL. He told her that making a bad purchase was not his problem and hung up.

12/17/2008 2:10:25 PM

I'm getting confused with the hims and hers story

[Edited on December 17, 2008 at 2:13 PM. Reason : anecdotal? damn]

12/17/2008 2:12:30 PM

Sorry, I meant to say it doesn't matter if you are underwater until you try to liquidate the asset.

Quote :

"Say after a year you owe 20k on your car but its only worth 15k. You lose your job and cant afford the car payments. In order for you to sell that car you need to come up with the 5K difference, bc the BANK owns your car until you pay the note off and it wont release the title without having it fully paid off."

Easy, if you had the money sitting in short or intermediate term CDs you cash it in soon losing the interest on the current term but not all the terms before this one and get rid of the car. During the period you were paying finance charges on the car you were making more in interest via your CDs (especially if you got 0% financing on a new car) and you now actually have more money in your pocket than you would have had if you paid the thing in full up front.

Quote :

"Here is a real life example. My good friend in charlotte got into a wreck in charlotte. It was his fault and the ins. company declared her car totaled. They paid her 6k. So then the lady called my friend and said that she needed 3k from him. He asked what for and she said that she owed 9k on her car and the ins only paid 6k. LOL. He told her that making a bad purchase was not his problem and hung up."

Did you friend have the money up front to pay the car in full from the beginning?

Your cognitive dissonance is alarming.

12/17/2008 2:17:24 PM

Sorry, Im really not a good story teller.

My friend, who is a man, hit another car. The other driver owed more on the car than it was worth. So when the insurance company paid her the value of her car she still owed money. So she called my friend wanting the difference. He told her it wasnt his problem.

Nattr, like ive said before, on paper it does make sense to play the numbers game, but you have to factor in risk. Most americans spend more than they make, hence the negative savings rate, so most people will simply spend the money they had for the down payment on something else. But just like this girl who actually did nothing wrong, other than make a bad financial decision, ended up with a bit of a crisis because she too didnt factor in risk.

If you have the money to pay for something, why not do it? Do you finance your grocery bills every month? Get a 0% credit card and invest the money in a CD?

Cognitive dissonance is alarming? Why because I dont want debt? GTFO

12/17/2008 2:26:10 PM

Gap insurance ftw, always running a risk otherwise.

12/17/2008 2:30:05 PM

^ i got Gap

Quote :

"Im going to have to wait awhile before I look for myself a new car. The good news is by then there will be some used for me. Have you had any problems with you audi? "

yeah if you could wait two or three years the new generation A4's are sweet. If i could have waited to get one of these I would have.

I haven't had any problems with my car so far although it has only been 4 months. VW does own AUDI and borrow from their design but from what i've read they possess their own independent engineering team. Unlike lexus which is merely made by toyota and slapped with a Lexus badge. Even if it does my car is still covered in the new car warranty till 50K miles or 2011 and the certified warranty program is really good. They will even ship my car back to raleigh while getting my a loaner car if something catastrophic happens and my car is stuck in Wilmington.

12/17/2008 4:30:58 PM

Thanks for your input HUR. I really like VW designs but have you noticed that after about 2 yrs the things look 10 yrs old. I dont really see the problem with audis but I dont know anyone who has a more recent model.

So what has novicane decided to try?

12/18/2008 9:51:14 AM

Also, a few simple pointers for saving money. I saw on tv that if you take your lunch to work everyday then on average you will save over 1,000 dollars a year. Also, it cuts a lot off of the grocery bill when you buy store brand products. There is no need to buy PAM, Dole, Del Monte, etc when store brand is cheaper.

12/21/2008 1:36:51 AM

Quote :

"Look, I don't think you are understanding the opportunity cost of money."

Yep. If people understood compound interest and opportunity costs, it would completely change out entire society.

Quote :

"Also, you aren't upside down until you are actually trying to sell the asset."

[NO]

If nothing else, what if it gets stolen? What if you're involved in a collision? Insurance is going to pay you what it's worth, not what you owe. What if something happens (laid off from work, kid on the way, move to a different area of the country, get sued for child support...i've changed vehicles for all of these reasons except for the first one) and you need to sell your car?

You're upside down the second that you owe more than it's worth.

***I see that you clarified that it doesn't matter if you're upside-down until you need to sell. That's true, but there are always the contigencies that I mentioned that make it generally not a good practice. You can get gap insurance, but until you get a killer financing deal, you should just put a down payment on it so the gap insurance wouldn't be needed (and if you can't afford to do that, you shouldn't be buying the car).

Quote :

"Hell, cars depreciate so quickly that within 1 month you can't get back what you just bought it for (on your average car), so by your logic, no one should finance a car, ever. "

Yes and no. I've profited on the last 3 cars I've had.

In any case, if you have any significant down payment, you won't be upside-down on a car.

I'm not debt-phobic the way eyedrb is, but most people are far too comfortable with taking on excessive and stupid debt.

12/21/2008 1:10:48 PM