car payments.

Soooo... you pay cash for you vehicles, right? Don't pay interest, it's silly.

You make more than I do by a long run and I paid cash for all of my vehicles.

 

I would never buy a vehicle on financing thats lower then the average inflation rate. Right now our inflation over the last few decades is estimated to be about 1.8-2%. My financing rate is 2.1%. So its close. To me, its no different then paying up front and not gaining the inflation on the purchase price. Instead, I get a pretty much nothing loan (inflation cancels out interest) and I get to enjoy driving my Tacoma which is a blast and something I love to do.
Again I understand the reasons why buying outright is clearly better then making payment, both mathematically and mentally really. But it come down to everyone budget, what they want to do, what they will want in a few years, and their understanding of money and how to avoid other debts.
Sure would be badass to strut in and drop 30k down on a truck though lol.

 

Do you even wonder how you could use that money in other ways though? Like if I had 25k and was going to buy a car, I think I would search around to find a low interest rate, then take that 25k and drop it in an rrsp to retire earlier, and then get the benefit of making a good 10k back on your income tax return (thats just an estimate of what my tax range is) ????

 

you must work a heckuva lot of ot

 

Well I do, but after 8 hours a day you start hitting 1.5x the top rate and after a couple hours you get into double time. All weekend shifts are double time as well and when you work a double shift ( 730am-4pm + 4pm-12am) in one day on a weekend and your top rate is 31.07 regular, it adds up lol do the math on that one days pay

 

That's akin to taking out a low interest loan, putting it into an account with higher interest.

Heck, that's small beans. More money is made with property but that's for another thread.

 

Yes, double and triple time does pay well. But here, the deduction for taxes pretty much makes it so that it's not even worth it. I had noticed on a check that I worked 16 hours over time was only $6 more take home than my regular 40 hour check!! Plus it throws me into a higher tax bracket so I end up not getting a refund as large as I normally would.

 

I can almost bet I pay more taxes then you lol Nova Scotia is horrible for it. I usually take home about 60% of my gross on a regular week

 

So.... it's not worth working all those extra hours because the government takes it all anyway??

So, lets all just sit on our asses and collected government handouts instead.

Sorry, had to say it..... Wait, weren't we supposed to talk about car payments??

 

I am in real estate as well, I own a rental house. Its not a big profit really but if you have a lump sum of cash to start with, thats where real estate is the best. To me, once studying how crooked the rich people and banks are, if you read their moves right, buying and selling stocks is easily by FAR the best way to make money.
But back to my truck payment point, you can see that a reliable truck (winters especially with the snow) get me a lot of OT at work, and usually by lunchtime on ONE SINGLE shift a month I can pay the truck payment. So its all about a persons situation.

 

I've got three jobs. I don't qualify for hand outs.

And yes, we are talking about car payments and if it's wise to do so or better to save for other investments instead.

 

He has to be exaggerating to a certain extent IMO. Also, if you pay more tax on a single paycheck, at the end of the year it will help your return for being over average for the year so its all good

 

"IF" you have the credit that supports it, refinance. I used USAA for the ease of purchase and refinanced with PENFED while I was at Bragg and saved a ton.

 

At what point is it even worth refinancing on a car loan?

Majority of the interest is paid in the beginning of the loan term, so you're paying less towards principal.
*If you wait too long to refinance, you've got less principal but you've already lost all the $$ in interest early on.
*If you do it too soon, you've got a bigger principal to work with. How much interest have you paid already? Did your percentage rate increase enough to make it more beneficial over the long term than....

VS

Keeping the original interest rate AND Putting extra $$ towards principal every month to eliminate the loss of $$ in interest. You won't see this benefit until the end of the loan term.


You've gotta do your homework and figure out the calculations before jumping in and assuming re-financing is the way to go. On long term mortgages, it's a no brainer. But on a 5-6 year car loan? Is it really worth it?
I haven't done the calculations (makes my head hurt), but I would definitely think about the logistics.

 

If you are talking about me (I'm a she) then no, I'm not exaggerating. Short of showing you that paycheck stub, I have no reason to lie. Like I has said earlier, I get lumped into a higher tax bracket.

....I started to write back to you about the investment properties and how they are profitable but I've already gone off track on this poor thread as it is. Maybe in pm.

My apologies to OP.

 

Here's a link to help with the calculations LINK.

 

I saw that link and plugged in some numbers for the fun of it.

It doesn't show you the breakup of interest & principal on a single month basis.
In the first year of a loan, how much of the actual principal have you paid and how much interest.

 

Did you click on the Show/Recalculate Amortization table button?

 

No.... I didn't dig that far.

Here's another Amortization Table for anyone wanting to see how things break up. Click on MONTHLY to see monthly interest/principal.
http://www.amortization-calc.com

 

No worries, thanks for the link. Hopefully someone will find this thread 10 years from now and find it a bit helpful . The charts helped me in deciding if it was worth refinancing or not.