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How are you going to spend your stimulus money?

Discussion in 'Sports and News' started by DanOregon, Mar 26, 2020.

  1. Smallpotatoes

    Smallpotatoes Well-Known Member

    I had an encounter with a pothole on the way to work today, so I guess that money is already spent.
  2. Starman

    Starman Well-Known Member

    I bought a Jeep in July 2005 on some humongous long loan (8 years I think), renegotiated it down in 2008 (just before the bust), paid it off in 2010.

    It's still humming like a top today (166K miles) Two little spots of rust on the driver side door.

    When I was working at Happy Jack's Natco from 1977-83, any vehicle 16+ years old had to have been kept in a sealed showroom.
  3. Starman

    Starman Well-Known Member

    I remember the day in winter 1990 I paid off my last student loan and car loan on the same day. I was utterly out of debt.
    I walked out to the end of the pier of the Lake Michigan town I was living in at the time and howled into the blizzard wind. I'm sure they heard me in Chicago.

    It's a good thing I don't live in that town now. I'd probably keep walking.
  4. micropolitan guy

    micropolitan guy Well-Known Member

    Growing up in WNY in the 1960s-1970s, any car over six or seven years old was all rusted out by road salt. They just corroded away, starting with the fenders, we called it the car cancer because it just ate away at the body. Rusty Jones was car chemo, it slowed down the decay but not for very long.

    Now living out on the West Coast there are tons of cars 20+ years old, no body damage whatsoever. I'm driving a 2002 CRV with 200K miles and hope to keep it for at least another 2-3 years. I even see some old 1969-71 SuperBeetles like I had as a kid; our '69 was a rusted relic by the mid-1970s.
  5. Starman

    Starman Well-Known Member

    My grandmother gave my mother a 1968 model Buick as a gift in September 1970. The fenders were already flapping with rust.
    By the time I started driving in 1974 it was barely running. We junked it that winter.
    That same year we inherited my (other) grandfather's 1971 Torino. It rusted a bit more slowly and we kept it rolling through 1980, but the last couple of years it just crumbled.
    Last edited: Mar 29, 2020
    Chef2 likes this.
  6. The Big Ragu

    The Big Ragu Moderator Staff Member

    Just catching up on this thread, so catching up on the "why is zero percent financing bad?" posts from a page ago.

    They short answer is that there is a cost to your zero percent interest rate. You obviously will never find a bank that would offer you a no-interest loan of any term, because they would lose money. That should make more people think about what is going on.

    When your dealer makes you that financing deal, it is because they are marking up the price of the car enough to more than offset the cost of the loan, and in practice, they earn even more profit that way. Those deals are all made possible by the manufacturer. The car manufacturers have financing divisions, or their own internal banks. They are able to offer a loan that they will lose money on, because they offset it by marking up the cars to way offset the cost they eat on the loan. The dealers like it, because they are incentivized to sell the car that way -- the manufacturer shares the financing profit with the dealer to get them to make those sales.

    Most people can't afford the car and walk in shopping for a monthly payment. That is what the dealer is taking advantage of. They muddle the loan with the car sale itself, and the buyer doesn't pay attention to what their real cost ends up being. From the dealer end, it's usually not that complicated. The manufacturer's invoice price (what the manufacturer charges the dealer for the car) has incentives attached to it, which the dealer conceivably can pass along to the buyer to make the sale. At its simplest, most buyers don't understand they have a choice between a cash-back rebate OR a finance incentive. So let's say you have pinpointed what the dealer's invoice price really is, you are then negotiating for the percentage of the dealer incentive you keep. For their part, the dealer has a minimum profit margin they are trying to make. Everything beyond that is gravy. And it's much easier for them to realize that gravy with the complicated financing deal.

    I have never financed a car, but if I was going to, I'd insist on negotiating the sale price completely separately from the loan. I am not sure how successful I could be at that given how dealerships are set up and the BS they would drag me through. I'd know, though, that if I get my sale price -- assuming I can get the car while leaving the smallest amount of meat on the bone for the dealer -- the loan on the car is going to come with a cost. I'd expect it to be whatever the going bank loan rate is for the type of loan I got. I assume I'd probably have to go to someone else (a bank) for the loan to have any chance of success buying a car that way, but I don't know.

    I don't like financing things even when it makes financial sense; but that is more about my personality. With interest rates being kept so artificially low to spur on people taking on debt, it's certainly valid if you choose to finance a car, even if you are able to pay in cash. In real terms (not nominal), you are very often going to pay less for the car (again in real dollars, not nominally) if you finance it -- courtesy of the Federal Reserve making anyone who has the gall to try to save money pay for you to go into debt. But in nominal terms, you are deluding yourself if you think you are getting a zero percent interest rate and getting as good a price as you could have gotten taking a standard cash-back rebate and whatever other dealer incentives were available in an all cash deal.
  7. bigpern23

    bigpern23 Well-Known Member

    Gap coverage can be purchased MUCH cheaper through your own insurance company.

    Also, you can shop around for an extended warranty on your car. You don’t have to buy it from the dealership at which you buy your vehicle. You’d be surprised how much the ELW prices can vary between dealerships of the same brand.
    Donny in his element and Chef2 like this.
  8. bigpern23

    bigpern23 Well-Known Member

    Yeah, car buying should be done in three distinctly different steps. First, negotiate the total price of the vehicle. Then negotiate the trade. Then say no to just about everything the finance guy offers (I usually purchase the wheel/tire protection, which can also be negotiated for a lower price) and check his math.
    Donny in his element likes this.
  9. playthrough

    playthrough Moderator Staff Member

    One of the most frequent robocalls I get is for extended car warranties. Some company is trying like hell to get me coverage for my Chevy Impala, never mind that I've never owned any Chevy.
  10. Neutral Corner

    Neutral Corner Well-Known Member

    I get those all the time. Our youngest car is a 2000.
  11. Batman

    Batman Well-Known Member

    Be very, very careful of extended vehicle warranties. Do your homework on who you're getting them from and make sure it's somebody reputable. You'd be amazed how many of them -- even ones bought from the dealer -- are not with the manufacturer or even the dealer, but some random third party outfit that'll have you praying like hell is still in business when you need it.
  12. bigpern23

    bigpern23 Well-Known Member

    Good advice that I should have included in my post.

    I’ve never actually bought one, but I considered it with my most recent vehicle purchase because it’s the first model year of a redesign. We shopped around a bit, but ultimately passed because we typically get a new car every 4 to 6 years and the ELW wasn’t likely going to come into play. The dealerships we talked to all offered manufacturer extended warranties.
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