What are you going on about then? That gap insurance is only for financed cars? Because that was already established in the conversation.

 

I think he was more targeting that to people who blindly get into financing for things they simply can't afford. Like buying a granny car at the used car shop with $50 down and $10,000 then 2 years later deciding they want a $30,000 mustang and suddenly they owe $37,000 on a $25,000 car (assuming it devalues 5k when you drive it away)

Getting out of a car you dislike that has devalued past the point of your remaining loan and trading it in for a car that you like and can afford even with the rolled over loan isn't exactly in that scenario. A down payment might be a bit better but not a lot of people want to spend 100% of their rainy day fund on a down payment. It's those people who live paycheck to paycheck that just see a monthly payment that seems like "oh yeah, i can totally do $600 a month... for 5 years?"

For me, I got a 3 year loan at $220 a month, will be putting $500 a month down just to pay it off in about a year.

 

But lots of people that can afford a car still choose to finance them. Just because I have $20k saved up, that doesn't mean I want to blow it all at once on a car. Especially if I can get a good interest rate. To imply that someone shouldn't have bought a car just because they didn't want to pay it all off at once, and thus get into talks about gap insurance is a bit ridiculous.

 

Financing cars is dumb, period.

Financing a new car is even worse.

Financing a new car with so little down that it's worth less than you owe, is #$%@^*& retarded.

 

Financing is a part of many people's lives. Either because they can't fork out the high amount at once or because they think its financially sensible for their unique situation.

You should probably not be buying a brand new car if you can only afford the absolute minimum down payment required, but a lot of people do, and they pay dearly for it.

I also wouldn't recommend putting your entire 20k savings on a car all at once if that is ALL you have. No one knows what the future holds, and as Homeowner or someone with kids, tomorrow could mean a break-in, ER visit or the like. Financing makes sense there.

To my post above theindiearmy, I wasn't meaning to pay the entire thing in cash, more like if you are going to be about 10k underwater when you first start a loan, you should consider other options and evaluate your financial situation instead. It sounds like you did the right thing for your particular financial situation, but unfortunately many people do not.

 

Yep. getting my car financed leading to my credit scores raising nearly 100 points, allowing me to get better rates on my future house purchase sure was dumb and retarded of me.

 

You're a moron.

I'm costing myself dearly by financing a new car at 0% interest. How will I ever recoup the $0 I've paid in interest? Oh, and I'm building an ever stronger credit history in the process?

I'm a moran.

 

This makes no sense at all.

 

You guys are right, my bad. Finance away!

 

I'll have no choice but to finance. I'll probably finance it for the maximum period.

 

I will finance it if the number makes sense. Else I will just pay it off.

 

Half down, and higher monthly payments to pay it off in 17 months.

 

Understand insurance.
They do their best to lure you to their insuror by low rates offers but when they get the details on your age, location, and driving record the rates may change, and likely will.
The younger you are the more likely you will crash and have a claim far in excess of your premium total.
Where you are matters because settling claims varies a lot across the country.
Insurors can, and do, check your driving record, so hiding tickets, claims, and location will only cause you to get higher premiums.
Younger drivers aren't taught that stupidity hurts, ignorance hurts, and above all impulses hurt. I have yet to see a drivers ed course that has anything like unexpectee avoidandance, backing up, or vehicle driving characteristics. Hitting plastic pylons just isn't better to them than videos but as teen licensed students in driving schools show, they simply aren't prepared to fully drive in today's traffic..
Just one example: did you have to negotiate a slalom with a required practice to avoid a sudden obstacle? How about backing out with limited space? How about dealing with impulsive urges? Those are the things that cause drivers under 25 such high rates.
Don't get me wrong the elderly may be properly programmed (just as teen drivers aren't) but their reflexes are terrible. Their re-training is much different than yours but not less needed.

 

LOL, I don't fit the younger profile at 57 and spent 10 years driving a formula car on road tracks with SCCA, I have learned avoidance just fine! LOL

 

But you're on your way out of the programmed and skilled.
After 65 you will note your reflexes slowing and only experience is keeping you on track.
Try this:
hold a pencil in your fingers horizontally and have someone without warning or indication say "drop". See how long it takes for the pencil to drop.As the years go by the time slowly increases and then longer and longer. Because you drove competitively your awareness will be much better than average but anticipation is good but quickness counts more. If it didn't you could still driven open wheeler. Competitively. And you are way betrter than most near elderly. I do the pencil drop test a lot and some students take 3 or 4 seconds to realize they should drop the pencil.
I don't know if self driving cars will help either.

 

Interesting, I will have to try that. I haven't driven competitively for almost 9 years so I am sure I am MUCH slower LOL!

 

So if I finance a car at 5% interest and am a good investor earning a 20% return on my investments, I am #$%@^*& retarded if I take a 5% car loan with 5k down and invest the 15k that I did not pay down. I could be smart like you and sacrifice the 15k investment that would compound on the returns and just pay 20k with 0% return.

Before you express such a strong opinion it would be beneficial to give yourself a reality check. As for me, I'm way better off financially by being #$%@^*& retarded

 

Good response Amy.

 

We all have our reasons for what we do and shouldn't push them on others, no one knows everyone else's situation. If financing makes sense then you should do it, if it doesn't make sense then you shouldn't do it. I personally like Amy have better invested my money else where. In a different time perhaps I would have paid cash, this isn't that time.

 

If you're smart enough to score 20% on an investment, you should be smart enough to not dump 20K on one of the worst investments ever (a new car).