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ModelNforNerd
Active Member
Not sure how it works in the Czech Republic, and I'm guessing even the Czech Republic themselves aren't quite sure how it works just yet (welcome to freedom, by the way, glad you finally joined us), but you don't actually get loans just because you now have to take care of children.
If I was making illicit cash, I probably wouldn't take out loans, but even the most honest amongst us is highly unlikely to have a half million dollars just sitting in the back room.
Now that you guys have the internet, you should maybe use it to do some research, so that your trolling at least sounds informed.
So a recent college graduate who needs loan to get a car so they can get to their first job has done something wrong?
How about the family that wants to buy a house so they can move out of an apartment, they are supposed to save for 20 years or more in order to buy the house? That sort of defeats the purpose of moving up in your circumstances if you have to remain in them in order to avoid taking a loan.
I guess just about every business ever then is wrong since most of them have taken loans at some point.
Oh wait, governments too, they are wrong ... ok that one I'll give you.
I'll be getting a loan on my car. Could I drive my Leaf another 5 years or so and save up enough to buy a Model 3 outright? Yes, I suppose I could. But when I can get a loan for around 2% interest and then leave my savings in investments making several times more interest than that, why should I pull a bunch of money out to buy a car in cash?
I appreciate that some people don't have the financial smarts to borrow money responsibly and need to avoid any kind of loans, credit cards, etc and only use cash for everything, but some of us can handle borrowing a modest amount for a car and pay off the loan without it being a problem.
Blanket statements like no one should ever get loans or if they do then they are a moron aren't helpful.
I appreciate that some people don't have the financial smarts to borrow money responsibly and need to avoid any kind of loans, credit cards, etc and only use cash for everything, but some of us can handle borrowing a modest amount for a car and pay off the loan without it being a problem.
Blanket statements like no one should ever get loans or if they do then they are a moron aren't helpful.
Garlan Garner
Banned
I'm asking about your insults not your logic. A person who calls someone else stupid should really look into the mirror of his "loan free" heart.
I would rather be consuming a financial loan, than to loan out my ethics and character.
Garlan Garner
Banned
No kids? Hmmmm I suppose that if you are going to duplicate something it might be best that you duplicate your money.
I can't believe I'm actually reading this. It doesn't look like anybody is taking this guy seriously, but I think it's still worth pointing this piece of terrible advice out.
Ha ha I suspect you have hit the nail on the head. Actually, I'd go on step ahead and suggest @Flekoun is probably not a person who likes children. Usually I don't do character analysis but this is an exception.
If one has sufficient funds to buy the car outright then that's all good and probably the best option particularly with record low interest rates on savings. However, financing either in part or fully, can also be equally good where it is well planned. A blanket statement saying loans are bad is incorrect because most people today especially those in the forum here waiting for their Model 3, I presume will most likely be perfectly capable of picking the best form of funding for their Model 3 depending on their individual circumstances and preferences.
ModelNforNerd
Active Member
The irony is that Tesla has to take out loans to build the car.
If you're THAT dead set against loans in any form, wouldn't buying a Tesla create a moral conundrum?
Flekoun, since you're so rich, how about sending me some cash to put towards my 3? Then I can get the bigger battery for it.
2016 was far from my best financial year, but not for a lack of trying on my part. And even so, I managed to pay all my bills on time and save a bit. I do IT support / data center work.
2016 was far from my best financial year, but not for a lack of trying on my part. And even so, I managed to pay all my bills on time and save a bit. I do IT support / data center work.
ricardocabesa
STD free
SunCharged
Member
So if you have $40k cash to buy a new car you're telling me it makes more sense to pay cash rather than to finance at under 3%? Given the average rate of return in the US stock market is let's say 8% over time I would argue that I would actually be losing 5% by paying cash vs. financing. Assuming of course I have that money properly invested.
jgillispie
Member
I was just about to post this same thing. With a good enough rate, you're better off taking a loan and investing your money elsewhere.
Garlan Garner
Banned
Is kind of funny that car loans are for people with an income that doesn't support the lifestyle they wish to have but they have an appetite for finer things they cannot afford, or on the opposite end, someone who is extremely financially disciplined, who will take the money saved from not purchasing and put it into investments.
Of course this would change with the type of car but if I had to guess which one of these groups the majority of car leases not just Teslas belonged to I would have to say the first.
Of course this would change with the type of car but if I had to guess which one of these groups the majority of car leases not just Teslas belonged to I would have to say the first.
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JeffK
Well-Known Member
It's not really that funny... it's more normal and needed.
A car is typically one of the most expensive purchases in a person's life like a house.
The average person cannot afford to buy a house with cash, but this doesn't change the fact that they need a place to live. They have a choice of dumping money into rent or putting it towards a home loan. If you plan to stay in one place then it's a better investment to put it into a home (depending on a number of other factors... but you get the idea).
Now a car is also a very expensive purchase. The average person cannot afford a new car with cash. Heck when I was 16 and trying to get a job, the first thing people asked was if I had a car... how could I get a car without a job? If they won't hire me, then how can I get a job without a car? (luckily my parents got me an old used car at the time)
A typical person will have a choice. Either keep funneling money into super old used cars that they can buy cash and the maintenance on those cars or take out a loan to purchase a car for more money than the cash they have on hand.
This doesn't mean that they need to buy a new car with the loan, they can certainly get a used car... The car loan itself allows you go get a newer, safer, more reliable, more fuel efficient car, without the need for the upfront cash. Many times when people need a car they don't have 3-5 years to save cash for it, whereas a loan will give them the car now, and they can pay over the next few years. Perhaps after that they can save money in anticipation of a new car, but sometimes you need the car right now.
Consider another scenario. Several years ago I was laid off from a job which didn't pay very much. I was driving an old used car insured with liability only. After being laid off my savings dwindled to very low numbers. All of a sudden a winter storm hit and I totalled my car and was stranded 100 miles from my apartment at the time. I didn't have the cash for a newer used car and I had no way home. My only recourse was a car loan at a local "stealership". Luckily I got an awesome job after that and was able to pay off the loan several years early. Point being: that car loan was a life saver.
I wouldn't say a needing a car loan for a seven year old Prius was me having an appetite for the finer things and it's nowhere near the lifestyle that I wish to live. Life simply threw a curveball and I had to make do.
For many years, about 1992-2005, I drove the old 1970's Chrysler cars, like Dusters and Valiants and Aspens, etc. Most of these cars cost HUNDREDS of dollars! Not because I couldn't afford better, even though I couldn't afford better, but because I liked the older cars. I did all my own work except paint and body. Many hours spent in junkyards, looking for better parts, cursing all the plain boring dull families who ordered their stupid slow boring new cars in the 70's with a 6 cylinder engine, the smaller 904 transmission, and weaksauce* 7-1/4" rear end, and no limited slip differential or performance gearing. I thought they were awesome, but to the uninformed masses, I am sure I looked like some dork driving an old beater around. They didn't know how well the drivetrains were set up! I got so much experience in turning nuts and bolts that had rusted into place years ago, that I am still a bit surprised when I see new cars with RUST FREE bolts that turn far more easily!
Then I moved into the FWD 1980's Chrysler cars, mainly 4 cylinder turbos,and drove those another 8 years or so. They could be fast, given proper set up, but it got to the point where I didn't want to spend all day getting dirty and sore hands and fingertips from turning bolts any more.
So after all this was the first time I ever really needed a car loan. I got a 5 Neon, drove that a couple years, then moved up to my '11 Challenger R/T for an even bigger loan.
My Model 3 loan will be nearly $20K more than the R/T's 25K loan.
I'd love to pay cash for the car, maybe some rich retired person here will come off with the paper for it if they think I should only pay cash for it? All right, then. Loan it is, or no 3.
I forget the point I was trying to make in this post, I just started typing.
* = weak sauce - definition of weak sauce in English | Oxford Dictionaries
Then I moved into the FWD 1980's Chrysler cars, mainly 4 cylinder turbos,and drove those another 8 years or so. They could be fast, given proper set up, but it got to the point where I didn't want to spend all day getting dirty and sore hands and fingertips from turning bolts any more.
So after all this was the first time I ever really needed a car loan. I got a 5 Neon, drove that a couple years, then moved up to my '11 Challenger R/T for an even bigger loan.
My Model 3 loan will be nearly $20K more than the R/T's 25K loan.
I'd love to pay cash for the car, maybe some rich retired person here will come off with the paper for it if they think I should only pay cash for it? All right, then. Loan it is, or no 3.
I forget the point I was trying to make in this post, I just started typing.
* = weak sauce - definition of weak sauce in English | Oxford Dictionaries
Red Sage
The Cybernetic Samurai
Waitasec... Are you guys saying there is a Money Market, SPDR ETF, REIT, trust fund, Stock, Bond, or other investment vehicle that pays a guaranteed 8% amortized compound interest rate over time? Awesome! What's it's name, and how do I get in...?
Because really? If you are talking about flat rate interest, it just ain't the same thing. Amortization be da DEBiL! Yes, even at 'low interest rates' -- especially over longer loan periods.
