Length of Car loans

Discussion in 'Money Talk$' started by Salty, Jun 10, 2015.

  1. Salty

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    The average car loan is now 67 months.

    What is the max # of months you would finance a car for? - Would the APR make a difference? ( for example - if your loan was only 1.9%)

    Suppose the salesman told you to take a 72 month loan - but pay extra each month and you would pay it off sooner....

    Open for discussion
     
    #1 Salty, Jun 10, 2015
    Last edited: Oct 7, 2015
  2. InTheLight

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    It depends on the deal. The APR certainly makes a difference. If I were planning to keep the car for 10 years I would have no problem going 72 months. It's just a math problem. How much interest will I pay over the term of the loan?

    You can bet that interest rates would rise in the next 6 years so having a loan at 1.9% would be sweet.

    On the other hand, the way cars continue to get better, loaded with the latest technology, it would be silly to keep a car for 10 years.
     
  3. annsni

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    Why is it silly to keep a car 10 years? It is just prudent to keep a car 10 years or more unless you're made of money and like to throw it away.

    As for the question of the loan, I would have to look at the terms but if it is a very low interest rate, I would get up to a 5 year loan but more than likely pay it off early (must have no penalty for this).
     
  4. Deacon

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    Many car loans are at a very low interest rate.

    What's silly is that cars cost as much as a small house...

    ... but there are fewer bathrooms...

    ...but there's the bonus that there are no problems with water in the basement.

    I'm working on 16 years with my Honda Civic - hoping to give it to my grandson in 6 years when he comes of age.

    Rob
     
  5. annsni

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    Rob - With a Honda Civic, you should have no problem. We have 3 Hondas - a 2003 Accord, 2008 Civic and 2011 CRV. Even the Accord is still running perfectly well and hasn't needed any more repair than brakes/oil change/tires.
     
  6. wpe3bql

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    WWDRD??

    What Would Dave Ramsey Do?

    He'd probably say, "Thou shalt only pay cash for a used car---which beeth the ONLY kind of careth thou shouldest buy!! :smilewinkgrin:

    I guess that's fine for DR, but if you're both retired and handicapped, that doesn't always work.

    Comments?
     
  7. annsni

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    We have only ever purchased one used car and so far that's worked out OK. It was a 2 year old Honda Civic that was pre certified so at least we knew it was checked over well. Otherwise, we prefer to buy a new car with the features we want - and then drive it until it dies. :) It is actually quite financially prudent to do so.
     
  8. wpe3bql

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    In 2014, I purchased a vehicle whose brand isn't even being manufactured any more from a dealership primarily sells cars not even made by the "mother company" of the vehicle.

    I did this primarily because the sales person is also a member of the same church I am.

    Was this a wise decision or not?
     
  9. InTheLight

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    Perhaps silly was a bad choice of words. Explained it in my previous post. Cars are rapidly improving almost every year - - better gas mileage, more safety features, better technology, etc. They're just flat out better vehicles. I'm all for wringing the last bit of life out of a product and stretching a dollar but if you have a 10 year old (or older) vehicle you have a vehicle that's missing higher MPG, hands free phone operation, smoother transmissions, reverse sensors and/or cameras, side air bags, flex fuel, heated seats, heads up display, bluetooth and USB inputs for streaming content (podcasts, music) from your phone, GPS, traction control, tire air pressure monitors, accident avoidance systems, etc. There are cars now that can parallel park themselves! The list goes on and on.
     
    #9 InTheLight, Jun 11, 2015
    Last edited by a moderator: Jun 11, 2015
  10. InTheLight

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    Depends if you will still be able to get repair parts in the future. Many times a canceled car model lives on through "cousin" models. For example, Plymouth no longer exists but the mechanical components are the same as a Dodge so parts should be available. Same thing with Oldsmobile and Buick.
     
  11. annsni

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    Most of those items are luxury items and not necessities. Looking at the list, my 2012 is missing all of them but flex fuel (which I would never use), traction control and smooth transmissions (which my other van had). I do get slightly better mileage on this van as well. I don't care about hands free phone operation (that's what speaker phone is for), reverse sensors and cameras, heated seats, heads up display, bluetooth and USB ports for streaming content, GPS or parallel parking by itself. These are usually very high priced extras on new cars anyway. The only thing I have on this van that I didn't have on the other van and I'm happy to have them are the side impact airbags. But even our 2003 Accord has them as well.

    Many of these things do not make a car better and really, we can do without them. I'd not be spending an additional $25,000 5 years earlier to be able to get them. I've lived without them and have driven in snow, ice, sleet, rain, hurricanes and the like and survived with only one accident that was not my fault and no amount of technology could have avoided. There set is either fun toys or something that a good driver can do on their own. Definitely not a reason to buy a new car over saving money in my book.
     
  12. SaggyWoman

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    I would do a Honda for a longer loan but not much else. Honda's last.
     
  13. InTheLight

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    Honda was the car for reliability starting in the mid 80's. Toyota caught up to them in the mid 90's and Ford and Nissan have caught up to them recently.

    The problem I have with Honda and Toyota is that their cars are no more than appliances, reliable but boring. That suits a lot of people just fine but I grew up driving muscle cars so they don't work for me.
     
  14. corndogggy

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    Have you seen 10 year old cars recently? They're pretty dumb looking and get horrible gas mileage compared to what is out there now. Plus, most start breaking down all the time before this point. Sometimes you can come out ahead by getting something new due to less maintenance, less gas, more safety, etc. Trucks and jeeps are a different story. A 10 year old truck is just a good truck.
     
  15. annsni

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    Well, we had a very good running 1999 Nissan Maxima until last winter when hubby was given another car by his mom. Now it's being driven by a teen and it's doing great. It had no major breakdowns in all of the years we had it.

    Then there is our 2003 Honda Accord. It runs great, gets decent mileage and hasn't had a significant issue yet either. That's my daughter's car and it's even been in a few fender benders but still does great.

    My 2002 Dodge Grand Caravan was running beautifully and had zero issues until a 90 year old man totaled it by t-boning me.

    Finally, there's my dad's Toyota Camry. 1991 and 350,000 miles on it. He DID just have to replace the door handle since it broke and he's got a decent dent in the front fender from hitting a post but that thing still runs perfectly (I drove it a couple of weeks ago when my dad couldn't drive it home from the hospital).

    10 year old cars are nothing. Really, take care of your car and it should take care of you. We will not get new cars until these ones are pretty much dead which I don't forsee in the near future. I DID tell my daughter with the 2003 Accord to start putting money away now for the time in the future when she will need a new car but honestly, I see another 10 years out of that thing.

    Oh and the Civic gets the best mileage and then the Maxima was the next in efficiency. The newest car is the one that is the least efficient right now.
     
  16. InTheLight

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    A 10 year old truck is a vehicle that gets about 30% fewer MPG than a new truck.
     
  17. Zenas

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    I hate debt so I would pay it off as soon as I possibly could and then drive it until it was no longer safe or reliable. Of course the smart thing to do would be to lay back enough money during that long period with no car payments that you could pay cash the next time. I drove my last car 12 years and my wife drove her last car 15 years.
     
    #17 Zenas, Sep 25, 2015
    Last edited by a moderator: Sep 25, 2015
  18. annsni

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    Gotta say it's nice not having a car payment!

    For those who say that you have to get a new car every so many years, how much is your car payment? In the last year, our 2003 Honda Accord cost us $400 for new tires plus the standard oil changes and inspection. Car insurance was pretty low too considering it's a 12 year old car with no collision on it. It makes it easy to set aside the equivalent of a car payment into the bank so the next car doesn't need a car payment. I wonder what the per year cost would be for each of us.
     
  19. corndogggy

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    Not at all. There are a few exceptions such as the recent Dodges that have the Hemi engines where half of it can shut down as well as advances in aluminum on trucks that aren't available yet, but in general, 10 years doesn't get you much on a truck.

    Case in point, I have a 2004 F-150 with a 4.6 V8 and 4wd that gets 13 mpg city and 17 highway.

    Add 10 years to that and the closest engine is the 5.0, you're looking at 14 city and 19 highway, even with the newer 6 speed transmission.

    Basically add 2 gears to the transmission as well as variable timing on the engine, and on a truck, you only get 1 mpg difference driving in the city, and 2 on the highway. Like 8% difference in the city and 12% on the highway.

    When gas is $2 something a gallon and the average price of a new F-150 is $45,000 plus parts last longer... that's a little hard to justify.


    Now with a car though, parts are much more expensive than a truck, they usually don't last as long, the price of a standard car is much lower, and advances in gas mileage is much higher. Often times it makes more sense to get a new car than to keep messing with an old one.
     
    #19 corndogggy, Sep 28, 2015
    Last edited by a moderator: Sep 28, 2015
  20. Reformed

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    I've been in sales for years, but I would never sell cars for a living. The dishonesty I've encountered from car salespeople has been palpable. There are honest car salespeople but they are hard to find. So, when a car salesperson opens their mouth, I have a good hunch that they're lying.
     

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