What is your Monthly Payments?

[Escapist]

^I have a coworker who's a strong believer in putting your money to work. Despite him being able to pay for all of his vehicles in full, he prefers to finance. I financed my MKV for two years before I paid it off only because I plan on buying a house and I needed to free up some DTI.

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[zrk]

^I have a coworker who's a strong believer in putting your money to work. Despite him being able to pay for all of his vehicles in full, he prefers to finance. I financed my MKV for two years before I paid it off only because I plan on buying a house and I needed to free up some DTI.

DTI would be the reason to pay off a car vs. keep it financed.

 

[Elektro]

This is why I never buy cars outright. "paying off your car" tends to be a financial mistake. Always loan against assets. Never use your own money, etc. etc.

Extend the hyper rationality a bit and just finance a cheap car. Or better yet take the train.

Some people don't want to do what makes perfect financial sense, don't want the hassle of dealing with payments, don't want a lien on the title, whatever. Not all humans are perfectly rational like you.

 

[zrk]

Extend the hyper rationality a bit and just finance a cheap car. Or better yet take the train.

Some people don't want to do what makes perfect financial sense, don't want the hassle of dealing with payments, don't want a lien on the title, whatever. Not all humans are perfectly rational like you.

Ya know, no need for hostility. You can ask most folks around here, I'm definitely not hyper-rational.

Yeah, for sure. Take the train. My point wasn't about being frugal, it was about to do with 'what do I do with 55k dollars.' If you've gotten to the point in your life where you can pay cash for a $55k dollar car, I expect that you are somewhat rational, at least to the point where you have some financial savvy.

If you also have 55k in cash laying around, you probably don't have much bad debt (cc's, unsecured personal loans, etc), and you probably have a decent credit score.

This opens you up to letting your money make money for you.

Not all humans are perfectly rational like you.

The asshole response to that, is 'That same set of humans is likely not going to retire at 47 with a small handful of millions laying around.'

Choose your own adventure I guess. ¯\_(ツ)_/¯

 

[MYA90SUPRA]

The amount of your monthly payment that goes to interest is (APR/12 months * current balance). The rest of the payment goes to lowering principal. Your bank should give the amount of interest charged per month. I financed 35000 with a 60 month loan at 3.8%. I pay 1000 per month plus some bonus money this year will go to the car loan so it should be paid off in well under 3 years.

There are amortization calculators online if you want it paid off by a certain date or not pay over x dollars in interest or whatever they can figure it out for you.

Where this starts to get funny is if you have a low interest loan like a mortgage or 0% deal (basically, less than inflation). Some financial experts can give you advice on better places to put the money if you don't mind keeping the loan open longer. I like to get things paid off as soon as possible.

Regardless if you pay more early on it does make a difference vs paying more later. Less principal means less interest charged.

My bank that I got my mortgage through did a breakdown per month for the entire loan and went over it for me plus they did how much I'd save if I did certain things by paying more per month.

 

[mmspider]

2022 2.0L base supra 43,xxx MSRP with tax 46,xxx
10k down 72 month loan. I paid about 550 a month.

Cheapest new supra you can buy.

 

[Octane]

Put $50k down. Preferred not to pay it off right away. I like having my credit go up by making constant monthly payments.

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