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2.49% APR for 84 Months - Payment Deferred for 3 Months!


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11 more payments and we get the title to the ottoman.  

My spouse and our current vehicle is now 7 years old.  It is paid for, and certainly was not financed for a long term. Since I started my career in the Automotive industry I don't think I have ev

64 months? amateur. we paid ours off in 60.     but seriously, we both did it years before the 84 month loan on a turd Dodge Ram would be done.

9 minutes ago, hegemony said:

deferred payments on new loans suck.

 

84 months is an equity trap.

 

the CU probably needs the long term to make the risk of that rate profitable.


Only a $40,000 car you're only paying $4,000 interest if that...

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1 hour ago, XxRaVeNxX said:


Only a $40,000 car you're only paying $4,000 interest if that...

The problem is that with the 84 month amortization it temps people to spend a lot more than 40k on a vehcile; just look at the inflation in truck prices over the past decade. If someone is only spending 40k, they should only need a 36 month loan.

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16 minutes ago, hegemony said:

The problem is that with the 84 month amortization it temps people to spend a lot more than 40k on a vehcile; just look at the inflation in truck prices over the past decade. If someone is only spending 40k, they should only need a 36 month loan.


I think it might be geared towards Tesla's based on where I originally saw it. Those don't tend to lose value as quick.

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2 hours ago, hegemony said:

deferred payments on new loans suck.

 

84 months is an equity trap.

 

the CU probably needs the long term to make the risk of that rate profitable.

That is a very interesting issue.  With a long-term loan, especially with a down payment, there is a very big chance of the money owed being more than the car equity for at least a few years.  

 

When my son got his first new car, about 1.5 years ago, he got a 3 year loan, with a couple of thousand down payment.  I was with him when he signed, just for the moral support.

 

The car dealer was trying to sell him gap insurance.  (*)  I pointed out that with a 3 year loan and a down payment, there wouldn't be a gap in a few months, so why get the gap insurance?  That saved my son a little piece of change every month.  

 

 

 

(*) For those who don't know, gap insurance covers the difference between the value of the car and the amount owed in case the car is totaled.  

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7 minutes ago, tomforr said:

I know very few people that keep a car for 84 months. The chances of being upside down on an 84 month loan are all but assured for the first..like.....72 months of it. 


I refute your personal experience by just recently selling my 2005 vehicle. If I was to buy a Tesla or something with a re-higher resale value and gets updates - I can see myself keeping it for longer. 

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2 hours ago, XxRaVeNxX said:


Only a $40,000 car you're only paying $4,000 interest if that...

The point is that you will be upside down almost from the beginning unless you are paying double or triple the contractual nut.  A seven year note, with three months where the interest is allowed to pile up without payments, is the epitome of lunacy...a $40K vehicle ought to be cleared in three years at that rate, and that is if one is dragging it out.  Three years would be about $1160/mo.   

 

And it is insane to pay $4K in interest on a vehicle.  Getting it paid in three years keeps more than half that amount in YOUR pocket...

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18 minutes ago, centex said:

  Three years would be about $1160/mo.   

 


Yea, I'm not having a car note the same as my mortgage.

You're missing the point that 84 months is fine if you have the funds - and you can simply pay more than the minimum in be done in 60-72 months instead of being constrained to what the bank requires especially if a financial emergency comes up. 

You also can pay for those 'deferred months' 

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7 minutes ago, hegemony said:

then buy a car that fits better into your budget. A low payment is not an important parameter when buying a depreciating asset.

I'd rather 2.49% at 84 months than 2.99% at 72 months. Length of the term isn't as major as interest. Its easy to invest and get a return higher than 2.49%. Strict 36 month terms? Get out of here.. rofl

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20 minutes ago, XxRaVeNxX said:

Yea, I'm not having a car note the same as my mortgage.

fwiw, we paid for this house in 64 months from when we bought it.
 

And that's a bit misleading.  It wouldn't have taken nearly that long if we hadn't also paid off the last 70% of our second home during the same timeframe.

 

(We are big fans of living below our means.)

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36 minutes ago, XxRaVeNxX said:


I refute your personal experience by just recently selling my 2005 vehicle. If I was to buy a Tesla or something with a re-higher resale value and gets updates - I can see myself keeping it for longer. 

"Very few" is not refuted by one experience, sorry. The fact is most people do not keep vehicles 7 years. I understand the point you are trying to make but it doesn't compute for the majority of new car buyers.  

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My spouse and our current vehicle is now 7 years old.  It is paid for, and certainly was not financed for a long term.

Since I started my career in the Automotive industry I don't think I have even closed 5 customers on an 84 month term.   I have only ever done one for 96 months.

You would not like me as a finance manager if you tried to go 72+ months.  I would fight you tooth and nail. 

 

To avoid that, I would welcome you to bring your bank/credit union draft, so I do not have to participate in what I consider a horrible decision.

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I have an 8.5-year-old INFINITI that I bought new.  

 

It currently has ~82,000 miles, ~12,000 of which were put on in the last six years.

 

I've taken very good care of it, but if I'd put an average number of miles on it every year the whole thing would have been in a pile on the floor of the garage about three years ago.

 

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8 minutes ago, tomforr said:

"Very few" is not refuted by one experience, sorry. The fact is most people do not keep vehicles 7 years. I understand the point you are trying to make but it doesn't compute for the majority of new car buyers.  

Well let me ask you this - what's the point of not keeping a vehicle and always having a car payment every 7 years or so? 
Now that is insane to me. 

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4 minutes ago, MarvBear said:

My spouse and our current vehicle is now 7 years old.  It is paid for, and certainly was not financed for a long term.

Since I started my career in the Automotive industry I don't think I have even closed 5 customers on an 84 month term.   I have only ever done one for 96 months.

You would not like me as a finance manager if you tried to go 72+ months.  I would fight you tooth and nail. 

 

To avoid that, I would welcome you to bring your bank/credit union draft, so I do not have to participate in what I consider a horrible decision.

I have a 36 month loan at 1.9% that I am itching to just pay off 2 months in. I have had 72 month loans in the past and would absolutely never do it again. 

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5 minutes ago, XxRaVeNxX said:

Well let me ask you this - what's the point of not keeping a vehicle and always having a car payment every 7 years or so? 
Now that is insane to me. 

People do long terms for the lower payment, It enables them to purchase more car than they can actually afford. Then they change the grille on the same model 3 years later and that person has to have the new model. It's a never ending cycle but it is extremely common.

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