Who cares about length of term if its a great deal? Usually the longer the better especially if rate is 0%.
Preserving cash flow in short term is more important for younger ppl who usually have potential for increased wages as they progress in their careers.

America was built on leveraged finance and its one of the things that keeps our economy going compared to other countries. Go try to take a car loan or house morgage in some other countries.

People waste $$$ different ways:
- college education
- timeshares
- country clubs
- golf
- vacations
- gambling
- sports betting
- boat/jet/vacation home
- clothes

Everyone has their vice.
Financing a BMW is not the worst thing u can do.

 

Or you could look at it as the guy who saved all his money and drove a Corolla then died in a car accident at 40 never getting to fully enjoy his money.

 

I agree that compulsive saving can sometimes be overdone, but I'm also a firm believer in staying out of debt as much as possible. It's better not to owe the bank or finance company anything to start with (especially with the poor job security that many non-governmental workers have today) than to be in hock and have trouble each month paying off those notes.

 

The shorter the term, the lower the rate.

Its $595 a mo for 84 months.

6.44% at Lexus. 6.4% at BMW.

 

Fair enough, if there is something you don't like or if the thread is going a different course, or if you offended....You don't have to participate. There are plenty of threads where its the same thing time and time again, I just try to avoid those threads.

Before, yesterday. I had no idea it was possible to obtain an 84 mo finance on a BMW, never knew it was possible. I have since learned you can get a Lexus this way, and a Toyota as well.

Apology accepted

 

Trouble is, the rate is very rarely a great deal for these very long terms. usually it's more than 6%. On the $50k cars being discussed here, that's about twelve grand in interest over an 84-month term. By contrast, a $42k loan for 60 months at 1.9% has a monthly payment that's about the same, but is (obviously) paid off two years earlier, and only accrues $2k in interest over the term. If you can score 0.9%, total interest is less than a grand. Yes the $50k car will usually be a little bit nicer (or larger and just as nice). But it also costs 41% more.

 

When you buy a car, you will be "underwater" regardless. No matter the length of financing, you will get what you get for the car and lose the portion that depreciated.

 

There's a lot of "in between" from debt-free to no savings. It's not usually an either/or decision.

 

You have a unique definition of "underwater" which doesn't comport with how the industry uses this term in auto financing.

 

Not always true for new car loans.
Its 0% for 36 / 60 / 72 etc.
why would i take Lower term for same rate?

 

Good show Jill and Jr McK. Nobody should feel offended or that they're being attacked personally. One, it's not worth it, two, it may not even be the case because all we are seeing of one another is what was typed. Now it's time for a group hug lol

 

There are times that I do not want 0%. For example, how many 0% for 15 to 18 mo. credit cards do we want? I took 2 recently for the premiums, one was $400, the other $200. One has no rewards so it went into a file (Key Bank). The other, I did use for airline tix and earned 1.5%, because I don't feel like paying for that say now, when the trip isn't until the end of May. The balance which was around $900 does bother me, as I don't like to owe. But it's 0% so I cut myself some slack. The issue is the $900 balance could easily go to $24000, and 15 mos. from now I have my thumb you know the expression. I would have to take it out of savings and maybe I wouldn't have spent the money if not for the 0%. As a general rule, yes I want to use someone else's money for free. But I don't want that 0% offer dangled in my face, to get me to spend on what I would not otherwise.

To your point, if I could get a great price on a new 992, 0% for 30 years, and, I could actually afford the car, by all means. But not if I cannot afford the car--this depends on my job, at least for me.

edit one factor I would use--the amount it depreciates the second I drive off? It should not bother me, that's my test.

 

Was not talking about 0% in this case. Was talking about BMW and 84 mo and I might as well include Lexus. The shorter the term, the lower the rate, year 1-2 is 1.9%, 3-4 is 2.9%, year 5 is 3.9%, 6.19% for 6 years, and 6.44% for 7 years.

Demographics and default rates are work with the above percentages. The longer the loan, the greater the chance of default. You need proper credit scores to qualify for 0% anyways. Even Hyundai who now has 96 mo finance has 2.9% at 96, and 1.9% at 84, any other terms are 0%

 

True, but I also don't believe in dropping a lump sum on a car. I think it's better to keep cash in the bank and pay over time, especially if you have a 0% APR. Dropping 20, 30, 40 thousand dollars in cash on a car is dumb unless you're fairly well off and that doesn't do anything to your finances. Better to hang onto it and pay it down over time in case you really need it for something important.

 

I was speaking to 60-month loans, the majority of people cannot afford a modern car with a 60-month loan which is why they stretch them out to 72 and 84 months.