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Buying a car

Discussion in 'The Okie Corral' started by W420Hunter, Feb 28, 2012.

  1. W420Hunter

    W420Hunter

    3,433
    69
    Jun 25, 2007
    Ohio
    Ok so I found a nice used car for a good price. I had it looked over by some one I trust so it's a good deal. I am looking at 2 options. One I get a loan pay 1/3 now and make payments over 18 months. The other is to cash out a bit of what I have in the market and skip the loan. I have no real credit to speak of just from paying my phone bill. So I have no idea if I could get the loan to start with. Would the proof of stock ownership be enough to help me get it? Is there any upside to paying it out right other then not having to pay the loan interest? Never got a loan before so any help would be great.
     
  2. gemeinschaft

    gemeinschaft AKA Fluffy316

    2,202
    57
    Feb 7, 2004
    Houston, TX
    I would finance some, but as little as possible.

    It seems strange, but your credit will not benefit if you simply pay cash for the car. I don't like to spend money that I don't have, but you have to finance things in order to build a credit history.

    If it were me, I would look a solution somewhere in the middle. Pay most upfront and see if you can get a lower interest payment and make those payments over time to help out your credit rating.
     

  3. yellolab

    yellolab

    905
    134
    Apr 15, 2008
    Vermont
    Being in debt sucks.

    Do you think you could make more in the market than you would pay in interest on the car?

    Do you have any cash reserves? If not then I would not lose all the liquidity you have in the market.

    Kevin
     
  4. W420Hunter

    W420Hunter

    3,433
    69
    Jun 25, 2007
    Ohio
    I have 3 in the bank and 42.5k in the market. So it sounds like taking a loan for about 1/3 or a grand of it is my best bet?
     
  5. AA#5

    AA#5

    5,099
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    Nov 26, 2008
    Since you have no real credit, getting a loan & making payments would help you establish credit. Remember, you can pay it off as quickly as you want.
     
  6. HarleyGuy

    HarleyGuy

    3,516
    233
    Mar 29, 2008
    If you're thinking about financing all or part of this car check out the interest rate (and the monthly payment at each) at your bank as well as the nearest credit union and then determine how much of a monthly payment you can afford before making your decision.

    With the amount of money that you have on hand you also have to think about emergencies (car trouble, etc) and not put everything you have down on a car and also a monthly payment.

    Perhaps 1K down and 18-24 month payments?
    You can always take the 24 month plan and pay it off early to save on interest and I doubt that there will be much difference in the amount of the payment.
     
  7. Unk

    Unk

    221
    4
    Jul 27, 2010
    West Central FL
    A loan is mortgaging your FUTURE way of life..you will be making a promise now that will have to be kept in the future.

    Do you need a car? If yes, is this the only car that will meet your need?

    Can you save and pay cash?

    Two kinds of interest - the kind you earn and the kind you pay..earning is better.

    Best.
     
  8. kiole

    kiole

    7,813
    4,359
    Feb 16, 2008
    What's the interest rate, now compare that to how much return you've got from that money in the market over the last 3 years(or whatever length of loan your taking).
     
  9. certifiedfunds

    certifiedfunds Tewwowist

    55,050
    7,314
    Apr 23, 2008
    It isn't enough money to make it such a complicated question.

    Keep in mind you're going to incur some costs pulling some money out to the market.

    I'd borrow the little bit you need. Pay it off as quickly as you describe and move on with your life.
     
  10. Brucev

    Brucev

    9,189
    5
    Jul 19, 2009
    There is no reason to get all wound up about a car loan. Paranoid comments to the contrary, credit is a useful tool. Put a reasonable down payment on the car. Make some monthly payments. Then, if you want to, just pay it off. It will help your credit score as it will demonstrate a reliable stream of payments made on time, etc. Simply paying cash does nothing to build your credit rating. The same is true of making regular on time in full payments of utilities, rent, etc. It works with college loans. And... the nice thing is if you don't need the money for school, you just set it aside and then upon graduation... make a few payments and then pay the loans off in full. It does "nice" things for your credit score. And that pays off when you buy a house, etc. JMHO. YMMV, etc.
     
  11. As others have said developing a good quality credit profile is not something that can be done overnight, but failing to do so can cost you money in the form of higher mortgage interest and higher consumer loan interest forever.
    If you are able to live your entire life without borrowing money then you have nothing to worry about, but if you are going to need a mortgage in your future you may want to consider participating in the game and developing your credit profile. Small loans for cars and some consumer credit that are paid on time will go a long way in that department.
     
  12. The Hawk

    The Hawk

    1,361
    124
    Aug 22, 2008
    LaGrange, Ky
    You need to establish an excellent credit record. Pay some down on the car and get a loan for the rest. Make all payments on time. Even pay it off early if you wish. This will help you later in life when you decide to buy a house, or another car.
    Enjoy your 'new' car.
     
  13. Debt sucks. Buy a good used car within your budget and pay cash for it. I am planning on having a 0 credit rating. I pay cash for everything except my house.
     
  14. JimIsland

    JimIsland

    1,021
    4
    Aug 1, 2011
    Charleston,SC
    Ditto....if you want to build some credit and have enough to pay cash for it, take out a loan using your money as collateral. You can usually get a very good rate since it is a low risk loan on their part.
     
  15. W420Hunter

    W420Hunter

    3,433
    69
    Jun 25, 2007
    Ohio
    Is credit really only needed for a home loan? I have a house my grandparents left me. IS there really no other reason to have good credit?
     
  16. Gregg702

    Gregg702 Gold Member

    8,215
    326
    May 1, 2010
    Las Vegas
    In case you ever want to take advantage of a 0% finacing deal offered by a retailer, or have an emergency credit card. Having a credit card is also useful if you shop online(credit offers greater protections than debit), or renting a car, or getting a hotel room. Also, if you get a credit card with good rewards and pay it off every month, the credit card companies actually pay you.
     
  17. devildog2067

    devildog2067

    16,322
    1,116
    Apr 20, 2005
    Chicago
    There are lots of good reasons to NOT have bad credit (some jobs check your credit history, for example).

    There are many reasons to have good credit (if you ever need cash in a hurry, for example, you can borrow against your signature).

    There is only one reason to have no credit, and as soon as you *need* to borrow money that reason is no longer valid.
     
  18. DaneA

    DaneA

    2,501
    0
    Mar 7, 2011
    Chattanooga

    Do you plan on living in that house for the rest of your life?
    Don't get a credit card, take out the car loan, pay it off based on the terms of the loan and move on. You have the cash on hand to pay it off anytime you need to if for some reason things don't work out.
     
  19. 427

    427

    6,997
    0
    Nov 23, 2009
    KUMSC
    Is this a private owner or at a car lot?

    Ask the bank loan officer where you have your account at for some a advice.
     
  20. W420Hunter

    W420Hunter

    3,433
    69
    Jun 25, 2007
    Ohio
    Here is the update. So my bank wont do car loans for anything older then a 06. I don't have the credit for a insecure loan. So my options are either get a newer car with larger loan. Go in and get a high rate loan at a place like check into cash. Or cash out 55 of my 648 stock and pay it out right.