0% for 84 months vs financing for 74 months

I’m an idiot. Someone who I consider fairly smart told me 3.9% for 74 mo is a better deal than zero percent for 84 months

Walk me through this.

kingstonlake wrote:I’m an idiot. Someone who I consider fairly smart told me 3.9% for 74 mo is a better deal than zero percent for 84 months

Walk me through this.

7 years to pay off a car/truck? I'd take the 0% financing and pay more when I could, or pay the same payment as the 74 month. Unless there are penalties for paying off early.

InTenSity wrote:

kingstonlake wrote:I’m an idiot. Someone who I consider fairly smart told me 3.9% for 74 mo is a better deal than zero percent for 84 months

Walk me through this.

7 years to pay off a car/truck? I'd take the 0% financing and pay more when I could, or pay the same payment as the 74 month. Unless there are penalties for paying off early.

That’s what I was thinking. Unless the interest paid over 7 years is less than the 12 month total of the 8th year.

Thought I read somewhere that 35% of all new loans are 72 months and higher. Crazy.

kingstonlake wrote:I’m an idiot. Someone who I consider fairly smart told me 3.9% for 74 mo is a better deal than zero percent for 84 months

Walk me through this.

It is a better deal. The question next is for whom is the deal better? The answer is the dealer.

To sum all of this up, this is a trick question and your buddy is a dealer. What did I win?

kingstonlake wrote:I’m an idiot. Someone who I consider fairly smart told me 3.9% for 74 mo is a better deal than zero percent for 84 months

Walk me through this.

Assuming you're talking about financing something & the principle is the same in both cases, that someone might be fairly smart, but not when it comes to finance.

0% is always better than >0%.

I have no idea what it means. Sorry.

kingstonlake wrote:

InTenSity wrote:
7 years to pay off a car/truck? I'd take the 0% financing and pay more when I could, or pay the same payment as the 74 month. Unless there are penalties for paying off early.

That’s what I was thinking. Unless the interest paid over 7 years is less than the 12 month total of the 8th year.

Thought I read somewhere that 35% of all new loans are 72 months and higher. Crazy.

Bought my Silvarado in 2015. April 7. One week before my dad died so I remember the date. Wanted him to see it, never did. Anyway... Did the 72 month thing. (business actually bought it) did what you said, paid extra when I could. No penalty to pay off early. I think I have 1578 more dollars to go. Last car I'll buy. Has about 100K on it, runs great. I'm near 59. Will last me at least 7-10 more good years with proper maintenance. What's a guy need at 69 years old? I scooter? I'm tired of car payments in my life. Wife isn't. She's never met a car payment she hasn't loved. so... we lease for her. Hate leasing. Worthless.

DWags wrote:

kingstonlake wrote:

That’s what I was thinking. Unless the interest paid over 7 years is less than the 12 month total of the 8th year.

Thought I read somewhere that 35% of all new loans are 72 months and higher. Crazy.

Bought my Silvarado in 2015. April 7. One week before my dad died so I remember the date. Wanted him to see it, never did. Anyway... Did the 72 month thing. (business actually bought it) did what you said, paid extra when I could. No penalty to pay off early. I think I have 1578 more dollars to go. Last car I'll buy. Has about 100K on it, runs great. I'm near 59. Will last me at least 7-10 more good years with proper maintenance. What's a guy need at 69 years old? I scooter? I'm tired of car payments in my life. Wife isn't. She's never met a car payment she hasn't loved. so... we lease for her. Hate leasing. Worthless.

Yup I’m car payment free. Love it. Dump it into retirement. My cousin is in his mid thirties and still a “kid” really. Bought the 51k GMC Sierra. Guess what his first two criteria were in his “truck”. A good looking grill and the sound system. Ok dude.....

DWags wrote:

kingstonlake wrote:

That’s what I was thinking. Unless the interest paid over 7 years is less than the 12 month total of the 8th year.

Thought I read somewhere that 35% of all new loans are 72 months and higher. Crazy.

Bought my Silvarado in 2015. April 7. One week before my dad died so I remember the date. Wanted him to see it, never did. Anyway... Did the 72 month thing. (business actually bought it) did what you said, paid extra when I could. No penalty to pay off early. I think I have 1578 more dollars to go. Last car I'll buy. Has about 100K on it, runs great. I'm near 59. Will last me at least 7-10 more good years with proper maintenance. What's a guy need at 69 years old? I scooter? I'm tired of car payments in my life. Wife isn't. She's never met a car payment she hasn't loved. so... we lease for her. Hate leasing. Worthless.

I always bought new cars, but that was when most people could afford them. In 2003 I bought a 2004 Grand Cherokee. Drove that thing until 2016, then I decided to try leasing. The end of my second lease is in two weeks and I can't return the vehicle because corona. I'll own up to a lot of bad decisions in life but leasing was the worst. Doing now what I should have done then, looking for a low mileage off lease vehicle. Let other people take the depreciation from now on.

Floyd Robertson wrote:

DWags wrote:

Bought my Silvarado in 2015. April 7. One week before my dad died so I remember the date. Wanted him to see it, never did. Anyway... Did the 72 month thing. (business actually bought it) did what you said, paid extra when I could. No penalty to pay off early. I think I have 1578 more dollars to go. Last car I'll buy. Has about 100K on it, runs great. I'm near 59. Will last me at least 7-10 more good years with proper maintenance. What's a guy need at 69 years old? I scooter? I'm tired of car payments in my life. Wife isn't. She's never met a car payment she hasn't loved. so... we lease for her. Hate leasing. Worthless.

I always bought new cars, but that was when most people could afford them. In 2003 I bought a 2004 Grand Cherokee. Drove that thing until 2016, then I decided to try leasing. The end of my second lease is in two weeks and I can't return the vehicle because corona. I'll own up to a lot of bad decisions in life but leasing was the worst. Doing now what I should have done then, looking for a low mileage off lease vehicle. Let other people take the depreciation from now on.

Yup, I often get the “can you drive I don’t want to put miles on my lease”. I always say “no problem, so how do you like your $300 a month driveway queen?”

kingstonlake wrote:

InTenSity wrote:
7 years to pay off a car/truck? I'd take the 0% financing and pay more when I could, or pay the same payment as the 74 month. Unless there are penalties for paying off early.

That’s what I was thinking. Unless the interest paid over 7 years is less than the 12 month total of the 8th year.

Thought I read somewhere that 35% of all new loans are 72 months and higher. Crazy.

If you're financing the same amount for each loan then it doesn't matter if the interest paid over the 7 years is less than the 12 month total of the 8th year. You're still paying more in total on the 7 years.

Or could there have been some other stipulation? Sometimes car dealers will have different rebates or discounts depending on the loan length/percentage. That's the only way that I could see that someone might be able to argue that the 7 year is better.

Floyd Robertson wrote:

DWags wrote:

kingstonlake wrote:

That’s what I was thinking. Unless the interest paid over 7 years is less than the 12 month total of the 8th year.

Thought I read somewhere that 35% of all new loans are 72 months and higher. Crazy.

Bought my Silvarado in 2015. April 7. One week before my dad died so I remember the date. Wanted him to see it, never did. Anyway... Did the 72 month thing. (business actually bought it) did what you said, paid extra when I could. No penalty to pay off early. I think I have 1578 more dollars to go. Last car I'll buy. Has about 100K on it, runs great. I'm near 59. Will last me at least 7-10 more good years with proper maintenance. What's a guy need at 69 years old? I scooter? I'm tired of car payments in my life. Wife isn't. She's never met a car payment she hasn't loved. so... we lease for her. Hate leasing. Worthless.

I always bought new cars, but that was when most people could afford them. In 2003 I bought a 2004 Grand Cherokee. Drove that thing until 2016, then I decided to try leasing. The end of my second lease is in two weeks and I can't return the vehicle because corona. I'll own up to a lot of bad decisions in life but leasing was the worst. Doing now what I should have done then, looking for a low mileage off lease vehicle. Let other people take the depreciation from now on.

Just buy the vehicle you've been leasing? You should be able to get a pretty good deal.

I bought my current vehicle new. It's 10 years old. No payments for the past 5 years. <35k miles on it, so I hope to drive it for at least 10 more years. The car before that I bought new and drove for 15 years.

tMrs. is a 1st time leaser, which I hate. I got my arms around it by telling myself it was a 3 year test drive (the last vehicle she bought turned out to be a POS). Lease is up in September & she's considering buying it.

Lease guy checking in

New car every 2-3 years. I get the new bells and whistles and don't have to worry about breaking down, new tires and it smells good. Cars are a money pit either way.

You guys still have to crank up the windows in your rigs?

Heat Miser wrote:

Floyd Robertson wrote:

I always bought new cars, but that was when most people could afford them. In 2003 I bought a 2004 Grand Cherokee. Drove that thing until 2016, then I decided to try leasing. The end of my second lease is in two weeks and I can't return the vehicle because corona. I'll own up to a lot of bad decisions in life but leasing was the worst. Doing now what I should have done then, looking for a low mileage off lease vehicle. Let other people take the depreciation from now on.

Just buy the vehicle you've been leasing? You should be able to get a pretty good deal.

I bought my current vehicle new. It's 10 years old. No payments for the past 5 years. <35k miles on it, so I hope to drive it for at least 10 more years. The car before that I bought new and drove for 15 years.

tMrs. is a 1st time leaser, which I hate. I got my arms around it by telling myself it was a 3 year test drive (the last vehicle she bought turned out to be a POS). Lease is up in September & she's considering buying it.

That's definitely an alternative. I only have 22k miles on it, but it's not something that to drive the next seven years.

I can't lease, as I put well over 15K miles/year on it. At best we might be able to lease one car, only use that to/from work, and never on the weekend.

Floyd Robertson wrote:

DWags wrote:

Bought my Silvarado in 2015.  April 7.  One week before my dad died so I remember the date.  Wanted him to see it, never did.  Anyway... Did the 72 month thing.  (business actually bought it) did what you said, paid extra when I could. No penalty to pay off early.  I think I have 1578 more dollars to go.  Last car I'll buy.  Has about 100K on it, runs great.   I'm near 59.  Will last me at least 7-10 more good years with proper maintenance.  What's a guy need at 69 years old?  I scooter?   I'm tired of car payments in my life.  Wife isn't. She's never met a car payment she hasn't loved.  so... we lease for her.  Hate leasing.  Worthless.  

I always bought new cars, but that was when most people could afford them. In 2003 I bought a 2004 Grand Cherokee. Drove that thing until 2016, then I decided to try leasing. The end of my second lease is in two weeks and I can't return the vehicle because corona. I'll own up to a lot of bad decisions in life but leasing was the worst. Doing now what I should have done then, looking for a low mileage off lease vehicle. Let other people take the depreciation from now on.

GM? If your lease is due in April it will auto extend a month. I assume the others are doing it as well. One of mine is due May 1st. I'm sure they are going to extend it. Or they can come get it from my driveway if there are that desperate. Gonna be some big auto deals in May/June/July.  I might even buy with the 0% financing. We'll see.

Nordic wrote:

Floyd Robertson wrote:

I always bought new cars, but that was when most people could afford them. In 2003 I bought a 2004 Grand Cherokee. Drove that thing until 2016, then I decided to try leasing. The end of my second lease is in two weeks and I can't return the vehicle because corona. I'll own up to a lot of bad decisions in life but leasing was the worst. Doing now what I should have done then, looking for a low mileage off lease vehicle. Let other people take the depreciation from now on.

GM? If your lease is due in April it will auto extend a month. I assume the others are doing it as well. One of mine is due May 1st. I'm sure they are going to extend it. Or they can come get it from my driveway if there are that desperate. Gonna be some big auto deals in May/June/July.  I might even buy with the 0% financing. We'll see.

Yeah, I had already talked to GM in early March about it extending it, though I didn't do it at the time. Just going to let it roll over for a month and go from there.

I have the expensive Sierra that Kingston mentions, but I bought it used at 2 years old with 24K miles on it.  So, as Floyd mentions, I let someone else eat the massive depreciation a vehicle takes in its first couple years.  I'm guessing it was a lease turn in due to the time, mileage and condition.  Anyway, I bought what was like a new truck in immaculate condition for a significant amount less than brand new.  I comes with a sweet F'n grill and the speakers kick ass.  All I had to do was drive down to Hicksville, OH to get it.  Yes, that is the real name of the town and it's quite fitting (not that there is anything wrong with that).

Edit: I didn't take out a 700 year loan, it's paid off and I only have 52K on it 3.5 years later. :)

Yikes

Nordic wrote:Lease guy checking in

New car every 2-3 years. I get the new bells and whistles and don't have to worry about breaking down, new tires and it smells good. Cars are a money pit either way.

You guys still have to crank up the windows in your rigs?

I bought my first grown up out of college car and had it for ten years but then got super sick of it not being reliable and having to fix it, and also I don’t know anything about cars so it was expensive, so I leased my next car. We’re only a year and a half into that so I guess I’m still at the point where either way I was going to have a car payment. So anyway I guess what I’m saying is that this post is useless and not helpful for anyone

10yr old car with <35k on it.... Damn

CORNER BLITZ wrote:10yr old car with <35k on it.... Damn

BMW guy says it should start appreciating soon.

Senior Dickfist wrote:I have the expensive Sierra that Kingston mentions, but I bought it used at 2 years old with 24K miles on it.  So, as Floyd mentions, I let someone else eat the massive depreciation a vehicle takes in its first couple years.  I'm guessing it was a lease turn in due to the time, mileage and condition.  Anyway, I bought what was like a new truck in immaculate condition for a significant amount less than brand new.  I comes with a sweet F'n grill and the speakers kick ass.  All I had to do was drive down to Hicksville, OH to get it.  Yes, that is the real name of the town and it's quite fitting (not that there is anything wrong with that).

Edit: I didn't take out a 700 year loan, it's paid off and I only have 52K on it 3.5 years later. :)

I’m gonna assume the speakers and the grill weren’t your first try criteria in a pick up, lol.

I don't understand how that's possible. Good public trans where you live in Miami Heat?

I don't even understand how someone can stay under 12k/yr in a lease. I work from home and I couldn't do it. Maybe a trip or 2 up north per year and that's it. I may or may not have used some tricks to stay under in the past.

Deal was financing gets you $6500 off sticker.

WhiteBoyHatcher wrote:I don't understand how that's possible. Good public trans where you live in Miami Heat?

I don't even understand how someone can stay under 12k/yr in a lease. I work from home and I couldn't do it. Maybe a trip or 2 up north per year and that's it. I may or may not have used some tricks to stay under in the past.

I average about 7k a year. My office is 1.5 miles from home. My kids are on their own but live < 5 miles away so I don't rack up a ton of miles visiting them. I combine multiple shopping destinations into one trip. Most of my miles are on weekends.

When the kids had multiple after school activities, forgetabouit.

WhiteBoyHatcher wrote:I don't understand how that's possible. Good public trans where you live in Miami Heat?

I don't even understand how someone can stay under 12k/yr in a lease. I work from home and I couldn't do it. Maybe a trip or 2 up north per year and that's it. I may or may not have used some tricks to stay under in the past.

I work from home mostly now. Go to the office on Fridays for a couple hours and stop at Pubix on the way home, but the office part is over for now. Used to travel a lot for work so the car sat at the airport a lot. Everything I need is 10 minutes away or less.

The car I had before had low mileage as well. I just don't drive a lot and live close to the things I do drive to. I've been lucky enough in my career not to have to drive long distances for work.

kingstonlake wrote:Deal was financing gets you $6500 off sticker.

That complicates the math. Need to know sticker price to figure it out.

Heat Miser wrote:

kingstonlake wrote:Deal was financing gets you $6500 off sticker.

That complicates the math. Need to know sticker price to figure it out.

It’s basically a wash I think. I’m not in the market for trucks so I’m not sure of demand. Are dealers getting sticker for new trucks? I think stick was 57k

kingstonlake wrote:

Heat Miser wrote:

kingstonlake wrote:Deal was financing gets you $6500 off sticker.

That complicates the math. Need to know sticker price to figure it out.

It’s basically a wash I think. I’m not in the market for trucks so I’m not sure of demand. Are dealers getting sticker for new trucks? I think stick was 57k

Yes, it's a wash. Which makes sense.

kingstonlake wrote:

Senior Dickfist wrote:I have the expensive Sierra that Kingston mentions, but I bought it used at 2 years old with 24K miles on it.  So, as Floyd mentions, I let someone else eat the massive depreciation a vehicle takes in its first couple years.  I'm guessing it was a lease turn in due to the time, mileage and condition.  Anyway, I bought what was like a new truck in immaculate condition for a significant amount less than brand new.  I comes with a sweet F'n grill and the speakers kick ass.  All I had to do was drive down to Hicksville, OH to get it.  Yes, that is the real name of the town and it's quite fitting (not that there is anything wrong with that).

Edit: I didn't take out a 700 year loan, it's paid off and I only have 52K on it 3.5 years later. :)

I’m gonna assume the speakers and the grill weren’t your first try criteria in a pick up, lol.

You know what they say when you assume...never mind, you are correct. In actuality, there is a grill I like better from the same year, but my speakers do kick ass. They're Bose and the system even has a subwoofer. I can thump while I haul material from Home Depot.

WhiteBoyHatcher wrote:I don't understand how that's possible. Good public trans where you live in Miami Heat?

I don't even understand how someone can stay under 12k/yr in a lease. I work from home and I couldn't do it. Maybe a trip or 2 up north per year and that's it. I may or may not have used some tricks to stay under in the past.

A work colleague is nearing the end of her 3 year lease. She has about 5,000 miles on it...total. She lives literally a half mile from her office and lives by herself with 3 dogs, so she never really goes anywhere. I joke with her that I should do a lease the same time she does, and then swap cars halfway through the term.

This a trick question or something?

I started looking for what I wanted 6 months before I planned on buying. About 2 months after just browsing, I noticed there was a 2013 Limited Avalon with 11,500 miles on it for $21k. 2 years later it has 36k miles on it and I have it about half way paid off. I'd like to buy new, but just not sure with everything else, how to budget in a $700 a month car payment. My wife and I both seem to put about 15-20k miles a year on our vehicles.