All yall BGOL expensive car owners, I have a question....

[CoTtOnMoUf]

I might be making a large vehicle purchase in the very near future. It's gonna cost about 85K before taxes. I was prepared to put about 30 or 40 as a down payment. A good friend of mine told me that I should only put down the tax and title (maybe 7K) down payment and finance the rest. I told him that that monthly note will be like a mortgage note. He said that if someone crashed into and totaled it or it got stolen in the first couple years, the insurance is only going to pay for what I owe on it and that giant down payment I would be fucked out of. He said to put that money I would put as down payment, into an account somewhere and just make the car note payments for the first 2 years or so because the depreciation hit would be much less after 2 years. He said to save up what I would have paid extra and also that huge down payment, and set it aside for a couple years and only then, pay that principal down.

Does this shit make any sense to yall?

Sorry @DJ, I went into one of your marathon threads and borrowed a few honeys.

 

[b_visionary]

Probably thinking too hard about it. Put down as much as you can afford, especially if you're thinking about keeping it after it's paid off. Pay it off sooner and call the bank and tell them that any over payments should go to the principal, which will lessen the interest paid.

 

[papi68]

This is BGOL. Pay cash.

 

[veritech]

Gap insurance.

 

[mcguyver]

If I am remembering correctly the insurance company pays the market value of the vehicle hence the need for GAP insurance. If you put that much money down you will be way ahead of the deprecated value of the car.


Example if your car is worth 85K, you put 30k down. 1 year later it's worth 65k, but now you owe 40K on the loan. The insurance company will pay off the 40k (loan balance) now you have 20K (balance left over from maket value) in your pocket.


Capeesh?

 

[CoTtOnMoUf]

if your car is worth 85K, you put 30k down. 1 year later it's worth 65k, but now you owe 40K on the loan. The insurance company will pay off the 40k (loan balance) now you have 20K (balance left over from maket value) in your pocket.


Capeesh?

 

[Coldchi]

This is BGOL. Pay cash.

This....

 

[Lexx Diamond]

If I am remembering correctly the insurance company pays the market value of the vehicle hence the need for GAP insurance. If you put that much money down you will be way ahead of the deprecated value of the car.


Example if your car is worth 85K, you put 30k down. 1 year later it's worth 65k, but now you owe 40K on the loan. The insurance company will pay off the 40k (loan balance) now you have 20K (balance left over from maket value) in your pocket.


Capeesh?

^^^^This right here.

 

[mcguyver]

You are insuring the vehicle, you are not insuring the loan. Insurance companies will only pay the value of the car, the loan is your responsibility. Vehicles value depreciate fast as fuck. Plus the dealers play games to get your vehicle as low as possible and sell it as high as possible. This puts the buyer at a huge disadvantage when financing vehicle. The short answer is the faster you payoff your vehicle the better off you are.

 

[Famous1]

This....

Naw....
According to his good friends theory... if something happened then the insurance company would give him $0.00
They only pay out what is owed on the car

 

[Flawless]

You want to be making a mortgage payment on a car for the next 5 years?

Make the down payment and don't take financial advice from your friend unless he shows you his credit report and bank accounts.

 

[ScorpDiesel]

A vehicle is a depreciating asset and you're exchanging your money for a portion of that asset. So, think of a vehicle as a bank account that loses value every year. If you put down $40k, into your bank account, the value of that money depreciates each year. If you were to put down only $10k, the value of that $10k will depreciate, but you retain the value of $30k. You should then put that $30k into a high yield account. And if you get into a car accident, GAP insurance will cover what you owe on the vehicle. Take another $10k from your $30k and get a new vehicle.

 

[Database Error]

Good friend = trolling you. He's probably somewhere now laughing at that bullshit. As soon as you buy your car with less down he's going to run into financial hardship and need your help.

 

[CoTtOnMoUf]

You want to be making a mortgage payment on a car for the next 5 years?

Make the down payment and don't take financial advice from your friend unless he shows you his credit report and bank accounts.

He is a former car dealer manager. I'm hoping he knows what he's talkin about but I'm not too sure about that ha ha.

 

[CoTtOnMoUf]

Good friend = trolling you. He's probably somewhere now laughing at that bullshit. As soon as you buy your car with less down he's going to run into financial hardship and need your help.

Dude makes >200K per year. He ain't hurtin. I hope he ain't tryna make jokes tho.

 

[CoTtOnMoUf]

A vehicle is a depreciating asset and you're exchanging your money for a portion of that asset. So, think of a vehicle as a bank account that loses value every year. If you put down $40k, into your bank account, the value of that money depreciates each year. If you were to put down only $10k, the value of that $10k will depreciate, but you retain the value of $30k. You should then put that $30k into a high yield account. And if you get into a car accident, GAP insurance will cover what you owe on the vehicle. Take another $10k from your $30k and get a new vehicle.

This might be some of what he's talking about.

 

[Aww Skeet Skeet!]

Gap insurance. Usually provided by the lender/lienholder if you're financing so you won't be upside down in case you're vehicle gets totaled. You put enough money down, you can avoid this (80% LTV or 20% down). It's not free and is usually included in the total financed amount.

As mentioned above, new cars depreciate fast as shit (although during the chip shortage, we saw car depreciation slow or even appreciate). If you're trying to keep the car, pay it off as fast as you can. Depreciation becomes less relevant in this scenario but loan interest becomes more prevalent. Don't want to pay thousands in interest over the life of the loan.

 

[CoTtOnMoUf]

The short answer is the faster
you payoff your vehicle
the better off you are.

This was my initial plan. Put down half, finance the rest and accelerate the monthly payments by 2 or 3 times. I hate owing people and I pay shit off quick.

 

[crazyace718]

Just ask for gap insurance

 

[Pimpslap Slim]

Lease it

 

[Flawless]

He is a former car dealer manager. I'm hoping he knows what he's talkin about but I'm not too sure about that ha ha.

And he is trying to get his "friend" to pay thousands more in interest on the chance you crash the car

 

[meilmarc]

This was my initial plan. Put down half, finance the rest and accelerate the monthly payments by 2 or 3 times. I hate owing people and I pay shit off quick.

Just ask for gap insurance

Ask your insurance company if they offer gap. Or if you going through a credit union get gap from them. Gap is like $3 a month if your insurance company offers it. If you make a big down payment you wont be that much upside down especially in today's market since used cars are high valued. DONT EVER BUY GAP FROM THE DEALER THEY OVERCHARGE.

Im pissed because my car got totalled out after last month after a chick ran a light and hit me. Car was paid off for over a year. I purchased it in 2016 for and out the door price of 49k. It had 115k miles on it and insurance cut me a check for 32k for the car. I kept it in good condition plus American v8s are about to go extinct so the car held its value well

 

[ANGRY MAN]

I put nothing down credit is excellent. I like to hold on to my liquid cash. Everyday isn’t promised, also I usually get a new car vehicle every year and a half. I have a total of 3 vehicles, car, truck, motorcycle.
Time to trade in my BMW HP4 for the 2023 model

 

[dbluesun]

A vehicle is a depreciating asset and you're exchanging your money for a portion of that asset. So, think of a vehicle as a bank account that loses value every year. If you put down $40k, into your bank account, the value of that money depreciates each year. If you were to put down only $10k, the value of that $10k will depreciate, but you retain the value of $30k. You should then put that $30k into a high yield account. And if you get into a car accident, GAP insurance will cover what you owe on the vehicle. Take another $10k from your $30k and get a new vehicle.

 

[yureeka9]

This is BGOL. Pay cash.

Actually, this makes sense. If you got 40 stacks to put down on a car, you should just get last years model, save the depreciation and pay it off with the down payment money.

 

[TENT]

Lord those chicks. Omg omg.

 

[Mt. Yukon]

I put nothing down credit is excellent. I like to hold on to my liquid cash. Everyday isn’t promised, also I usually get a new car vehicle every year and a half. I have a total of 3 vehicles, car, truck, motorcycle.
Time to trade in my BMW HP4 for the 2023 model

No idea if it's the best financial advice, but this is what I do. I'd rather have the chunk of bread in my bank, than put on a a vehicle that in most markets won't gain value. My current car is 0.9% for 66 months. Is the interest really gonna hurt??? Just what I've always done.

 

[knightmelodic]

You can easily find amortization calculators online. Crunch some numbers and see what you can comfortably pay per month.

Personally, I love a note because it gives you flexibility. For instance, you can double your payment or even better, pay the note and then add a principal-only payment. That'll also lower your monthly payment.
Make sure there's no penalty for paying off your loan early.

I don't even care about the length of the loan because I always pay it off in a couple of years. This has the benefit of lower monthly payments and lower insurance payments once the loan is satisfied.

I don't know what your friend is talking about but unless you're paying the full price of the car this stuff is pretty cut-and-dried. I also don't know what state you're in, so there's that.

In short, with 40k to spend I'd rather keep at least 15 on deck for emergencies and get a longer loan and pay it off faster.

 

[lightbright]

Waiting for BGOL's crypto millionaire and Nigerian baller to offer his two naira...... with all the expensive whips that he's posted as his own..... and his crypto millions.... he should be able to give sound advice to OP






@FUCKYOU

 

[jagu]

This us very simple. You always look at the opportunity cost of money before you put money down on something that you can finance. In this case, if you know that you can make more money using that down payment for something else then don’t put anything down. All that other shit that your friend told you applies to leases and not purchases. Just make sure that you have gap insurance.

 

[jagu]

No idea if it's the best financial advice, but this is what I do. I'd rather have the chunk of bread in my bank, than put on a a vehicle that in most markets won't gain value. My current car is 0.9% for 66 months. Is the interest really gonna hurt??? Just what I've always done.

That .99% is old news. You’re not paying lower than 4% these days.

 

[Mt. Yukon]

That .99% is old news. You’re not paying lower than 4% these days.

I know. Bought it at the start of 2020. Months before Covid and shit changed.

 

[jagu]

O

I know. Bought it at the start of 2020. Months before Covid and shit changed.

oh yeah. I bought a car in August 2020 too and it was 1.9%. I was looking at a Porsche last week and they were talking about 5%. Lol.

 

[Big Tex]

Lord those chicks. Omg omg.

Fam, I couldn't concentrate on the math with all that pussy meat in the thread.

 

[Hey Julian!]

Just make sure you get gap insurance in this climate because cars are about to depreciate heavy.