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Originally Posted by flipnkraut
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Originally Posted by gatorfast
Quote:
Originally Posted by flipnkraut
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Originally Posted by LIF83
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Originally Posted by flipnkraut
That's not true at all. Putting money down on a car in order to afford the payments means you can't afford the car. If you can afford the car then you can afford to not put anything down and also get a <3% rate (depending on what interest rates are at the time). You can make more investing than that interest rate so it makes no sense to put money down unless you couldn't afford the car to begin with. If you are smart you can also take advantage of the banks taking advantage of gullible people and get the longest term loan and pay it as if it were a 36 month loan. You'll actually end up paying off the car a month or two earlier and pay about the same in interest. And plus side is you'll never be upside down on the loan.
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I stated OP should of put a good amount down to get it approved... |
Might as well tell him to pay the whole thing in cash. If you can't get approved without anything down you can't afford the car. |
lol what? Putting money down is a personal decision and generally has nothing to do with being able to "afford it". Net worth and current/future earnings are much more of a factor in terms of affordability. People do anything from financing 100% of the purchase to stroking a check and paying in full up front depending on what works best for them. Most people use a down payment to control monthly payments as a form of budgeting. |
Let me state it again since you missed it. If you _have to put money down in order to get approved_, you don't have enough money to afford the car. If you _choose_ to put money down, that's on you, but if you are required to put money down then you can't afford the car.
As far as paying cash, why would I tie my money up in a depreciating asset, when I can finance it at less than 3% and instead invest that money making me 8%.
And if you're concerning yourself with the monthly payment instead of what you're ultimately paying for the car, you're making a poor financial decision. |
I didn't miss anything. I just think your hardline stance and opinion on what constitutes affordability is misguided.
I love how this is always the rationale for putting down less money and financing more. Like there are so many 100% safe investments out there which yield a high return thereby making it foolish to use cash elsewhere. This is much more of an academic answer than a real world and practical answer imo.
And finally, nowhere did I mention that overall cost of ownership was not important. However, that is only realized once you dispose of the vehicle. For the ownership period though, most people budget in terms of monthly cash outflow. This is what I was referring to when I mentioned the down payment can be used to manage monthly payment.