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Wow this thread has gone from "need SIMPLE advice about using large down payment" into "lessons on how to calculate financing equations and accounting math" into i am right and you are wrong"
And Christy still did not get her question solved.
And Christy still did not get her question solved.
You are right.. Let's answer it. Yes. Dumping $20k in a car that's way more than $20k is too much. Just get the best APR you can with as little down as possible and do something useful with the money, like use it as a pillow to fall back on or a down payment on a house. But I am that kinda person where I'd rather have the debt with a large savings account than an empty savings account and some depreciating objects.
Christy, why don't you ask your dad about a down payment?
The internet is great but, your parents have always got your back.
You were going to to trade the Camry for 5K and now they are buying it for 10k.
That's 5k of 'found money'. It wouldn't be out of line to consider their advice in this instance.
LOL you guys! Having reading of of your posts, I'm now kinda persuaded to buy a used vehicle. Even though I do have the financial means to buy a new car, I just don't think it's worth it anymore. But if I did chose to buy a new car, I'm still kinda hesitant to ask my parents for a loan since they just bought my brother a brand new Scion FR-S and my dad literrally wrote a check for $27k and paid it off that day in addition to giving me $10k for my Camry (which is only worth at most $5k by KBB). As the oldest, it just seems odd and unreasonable to ask my parents for a $40k loan. So after some researching, I will mostly get a CPO 2014 RX350 @ 15k miles for about $39k, down pay the $10k and finance the rest with my own money. Since I've been super busy with work, I haven't gotten the chance to talk with my parents, but when I do, I'll get back to you guys
You are right.. Let's answer it. Yes. Dumping $20k in a car that's way more than $20k is too much. Just get the best APR you can with as little down as possible and do something useful with the money, like use it as a pillow to fall back on or a down payment on a house. But I am that kinda person where I'd rather have the debt with a large savings account than an empty savings account and some depreciating objects.
Just be careful with the APR because it is not what it seems. That's how the finance guy at Subaru got me. He misrepresented APR for the interest rate and included loan origination fee in the APR. Sure, if I was to keep the loan for the full term, I would come out ahead, but I only needed short term financing. Otherwise, I would have used another source for finances.
If you owe the same amount of money as what is in your savings, chances are, you are loosing money. Savings earn very little each month and it is not likely to outweigh what you are paying in finance charges. The objects you have finances will depreciate no matter what. At the end of the day, this decision is purely emotional, which is absolutely OK, we are all humans.
Christy, what car to buy, new or used, is entirely up to you. On a new car, you get promotional interest rate, so that's a consideration. I have been buying mostly new cars simply because it is very difficult to find nice used cars. Yes, I am very picky. You should have seen my11.5 years old IS300 I sold. If 2-year old used cars were in the same shape as it was, I most certainly would consider it.
And again, a used car is a cat-in-a-bag. You never know what was wrong with it. Many will be fine, some will not. Neither CarFax nor CPO is an insurance against it.
Then, of course, there's an emotion of buying a new car... the smell, the way it rides, the fact that it needs no maintenance right now.
All are factors and only you can decide what is best for you. I would not ask parents for a loan because you can get a great rate at a bank and not put a financial strain on your parents. Judging by your income, you can more than afford a nice car.
Being in CA, you could also just buy a Prius and call it a day. You'll be sitting in traffic most of the time anyway.
I guess my point is, do what you feel is right for you. You can't always be fiscally-responsible.
P.S.
From my personal observation, a lot of people on this forum had paid out their cars straight-out (or short-term financed minimal amount through LFS to get promotional discounts).
It is a Lexus forum after all.
Hey guys, I'm back! After talking with my parents, we went to the Lexus dealer on Friday and I got my 2015 Lexus RX350! When I went to the dealer, I test drove the CPO and the 2015 RX350, and after discussing both cars with my dad, he suggested/preferred the new car. So the MSRP was $51k and after my mom's awesome negotiating skills, the OTD was $47,500. I decided to finance the car through LFS with the .90% APR @ 60 months. My dad generously put in an extra $5k so the total downpayment was $15k. Just to let you know, I didn't put any of my own money towards the car. With all of that, my monthly payment is roughly $600.
