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[Cashman1234]

So much hate for the guys that can buy a vehicle in cash, honestly it’s not hard to save money and do so. My last 3 I paid cash for, haven’t had a vehicle loan in years. Why would you take a loan out if you had cash to buy it outright like you should be doing in the first place. All I gotta say is Dave Ramsey. Debt free and do what I want and every 7 years my money doubles, should have 5 million in 14 years. So why would I take a loan out for anything including a house? Wake up people it’s not hard despite what everyone says, they are wrong.

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[Deleted member 1370]

Actually pay your statement balance off each month as not to incur interest.
Don't pay the entire running balance off each month. Allow it to report to the credit bureaus.
If you pay the entire balance off before the statement cuts, most CC companies will report a zero balance.
Basically it will look as though you're not using your credit.

The credit game is more than a score game. It's a payment history game as well.

The thicker your credit profile. The less affect inquiries or new accounts will have on your scores.
That means atleast 3 revolving lines of active credit and one installment loan.
For those without a installment loan.
You can boost your scores by around 30 points by just taking out a share secure loan and immediately paying it down to a 30% balance. Once it's reports the lower balance, you should get a score boost.

Cash doesn't give you credit. Unless it's being used to secure it.
You have millionaires and billionaires that can't get a personal or business loan, because of shitty credit. That alone should indicate cash isn't king in this world now.
Banks don't care how much money you have, if you don't show a history of paying them back.


Don't be afraid to use your credit. That's what it's for and why you work hard to build it.

I've spent the last 10 years rebuilding mine back. Not just talking out of my butt here.
I don't allow in most cases dealers to pull my credit. Obtain your own financing when possible.
If I did allow them to pull. They'd discover my credit report from a single bureau is nearly 200 pages long!
That's not from someone, that has only a couple of credit trade lines.
Or someone that's afraid to use his credit.

I only have one line of credit a credit card i opened in may as a first line of credit. like a start somewhere secured credit card. to build it before i upgrade and get something better. but i definitely plan on building and building the profile of credit so to speak thats for sure. Thanks for the advice. I dont pay off the balance before the statement cuts thats for sure. Maybe i worded it wrong perhaps.I know my credit is being built up faster by keeping my utilization rate below 30% experian tells me. When i was above that my score would go down a couple points. My limit is pretty low as well so i gotta work within the confides of what I got for now. The truck will atleast be an installment plan of credit loan type so thatll help atleast.

 

[Old Ranchero]

Your data point is too old to be valid, my last 5 leases were all on auto withdraw never an issue.

maybe so. More recently my cell phone plan provider decided to move my auto withdrawal from the 1st week of the new month to last week of current month without any advance notice. Despite my best efforts to time my monthly retirement deposits into my account- they are always late by at least 3 days creating potential problems with account balances dropping below minimum required to avoid fees on account. Besides that, I really like the option of choosing the payment $ source/method at any given time as my circumstances change. Just a matter of personal preference I guess...

 

[elticual]

Why would you take a loan out if you had cash to buy it outright like you should be doing in the first place.

This is very bad advice because we live in a capitalist nightmare that has very strict rules and regulations, and every company who deals with high value costs uses the credit score system to verify your creditworthiness and can decide not to give you any other type of loan, even renting.

Sure, you can pay cash for an "asset" like a car, but that car payment being paid in full on time every month will only help you later in life.

The credit score system was only started in 1989, so anyone who was an adult at that time has very skewed views on exactly how purchasing should work.

Younger car purchasers should beware of all the "cash is the best" because that's not the world we live in right now.

 

[Old Ranchero]

So much hate for the guys that can buy a vehicle in cash, honestly it’s not hard to save money and do so. My last 3 I paid cash for, haven’t had a vehicle loan in years. Why would you take a loan out if you had cash to buy it outright like you should be doing in the first place. All I gotta say is Dave Ramsey. Debt free and do what I want and every 7 years my money doubles, should have 5 million in 14 years. So why would I take a loan out for anything including a house? Wake up people it’s not hard despite what everyone says, they are wrong.

seems like there are a couple former Economics/Finance majors on here finally getting to use some of the theory and formulas they learned in college- before they changed to a more practical career after graduating

 

[Old Ranchero]

This is very bad advice because we live in a capitalist nightmare that has very strict rules and regulations, and every company who deals with high value costs uses the credit score system to verify your creditworthiness and can decide not to give you any other type of loan, even renting.

Sure, you can pay cash for an "asset" like a car, but that car payment being paid in full on time every month will only help you later in life.

The credit score system was only started in 1989, so anyone who was an adult at that time has very skewed views on exactly how purchasing should work.

Younger car purchasers should beware of all the "cash is the best" because that's not the world we live in right now.

Building credit is a necessity earlier in life, later after you are established you have more options with financing or paying cash being 2 of them depending on your specific situation and needs. Comparing Capitalism vs. any other economic system throughout history it has provided a higher standard of living for a larger % of the population than any other economic system ever invented or theorized. Is it perfect? No. But still far and away better than any other despite what current popular culture often portrays.

 

[RM83]

Although I've heard if that repossession was a vehicle financed under Ford Credit previously they won't touch you.

It was through Ford Motor Credit over 7 years ago. Looks like I'll be going through my credit union for financing.

 

[Cashman1234]

This is very bad advice because we live in a capitalist nightmare that has very strict rules and regulations, and every company who deals with high value costs uses the credit score system to verify your creditworthiness and can decide not to give you any other type of loan, even renting.

Sure, you can pay cash for an "asset" like a car, but that car payment being paid in full on time every month will only help you later in life.

The credit score system was only started in 1989, so anyone who was an adult at that time has very skewed views on exactly how purchasing should work.

Younger car purchasers should beware of all the "cash is the best" because that's not the world we live in right now.

you just don’t get it like the rest of thebroke Guys

seems like there are a couple former Economics/Finance majors on here finally getting to use some of the theory and formulas they learned in college- before they changed to a more practical career after graduating

Continue your broke in debt life style till the bill collectors come for you stuff you took a loan on. Oh ya I never went to college.

 

[Old Ranchero]

you just don’t get it like the rest of thebroke Guys


Continue your broke in debt life style till the bill collectors come for you stuff you took a loan on. Oh ya I never went to college.

you musta confused me with someone else. I've been 1 of the biggest proponents of paying cash on here and mostly agreeing with your thoughts... while opining on others who keep preaching the merits of borrowing.

 

[elticual]

Building credit is a necessity earlier in life, later after you are established you have more options with financing or paying cash being 2 of them depending on your specific situation and needs.

Then why oh why do you keep pointing out how bad credit, auto-payments, and loans are without that caveat? Without the asterisk on your comments, someone might misconstrue it as sound financial advice from someone with authority because you're clearly doing well. I'm still trying to convince one of my friends to let her daughter get a credit card because she's absolutely terrified of the daughter using it wrong and ruining her life, not realizing that it basically knee-capped our other friend for not getting a credit card until he was 27, and he can't get a home loan at a reasonable rate, due to this sentiment from his own parents.

Comparing Capitalism vs. any other economic system throughout history it has provided a higher standard of living for a larger % of the population than any other economic system ever invented or theorized. Is it perfect? No. But still far and away better than any other despite what current popular culture often portrays.

This isn't my argument, but if it provides the highest standard of living, it makes sense to play by its rules and not try to live outside of it by only paying cash. Doing so means you're not participating in capitalism. Our economy is structured through debt. I'd much prefer to pay cash for things, but the reality is very different and you have to use the credit system in your own favor.

 

[brnpttmn]

Thats what i wanted to know, thanks for the info. I was one to bet theyd guarantee it based up on the amount of my downpayment. I also want less to worry about paying and such as well given my min. wage salary etc. WIth the downpayment ill have my monthly payment should be pretty low even with not so great interest (we will see what they offer me etc). Just didnt want to go to the dealer after ordering it and being sent away because they wouldnt loan me the money needed ya know? This is all new info to me and a whole new experience and the people i know havent bought a new vehicle since the mid 90s so they dont know the process well either.

If you're confident in your steady earnings (you should be if you're buying a new car), and they'll give you an optimal rate with less than your entire $17K down (I'd imagine 20% down should be good enough), you should really consider paying less down. If you're worried about payment size knock a couple options off the truck to get it down to $25K. If you can get the 1.9 @ 60 mos and finance 15K you'll be able to keep the payments under $300mo, build your credit, and still have a few thousand dollars buffer for your emergency fund (if you already have an emergency fund, start funding an IRA or mutual fund/brokerage account).

 

[Old Ranchero]

Then why oh why do you keep pointing out how bad credit, auto-payments, and loans are without that caveat? Without the asterisk on your comments, someone might misconstrue it as sound financial advice from someone with authority because you're clearly doing well. I'm still trying to convince one of my friends to let her daughter get a credit card because she's absolutely terrified of the daughter using it wrong and ruining her life, not realizing that it basically knee-capped our other friend for not getting a credit card until he was 27, and he can't get a home loan at a reasonable rate, due to this sentiment from his own parents.



This isn't my argument, but if it provides the highest standard of living, it makes sense to play by its rules and not try to live outside of it by only paying cash. Doing so means you're not participating in capitalism. Our economy is structured through debt. I'd much prefer to pay cash for things, but the reality is very different and you have to use the credit system in your own favor.

that's an inaccurate and misconstrued portrayal of my comments and positions. Show me where I said "credit is bad" or "loans are bad"? I didn't make any sweeping generalizations on those and have given personal examples of things like auto payments not working well for me. It's widely repeated that a car is the 2nd biggest purchase a person makes in their lifetime and I assumed intuitive, common sense that you need a good credit rating and history to financially function in our society and didn't need repeating in every post on purchasing here. My realization of this happened in 1988 when I was 30 years old. Decided to make a small purchase opening a credit account at a local electronics store where I qualified for financing, made all the payments on time until fully paid and built off that small start for decades after.

Not sure what that has to do with your friend not wanting their daughter to get their 1st credit card, but clearly that hits a raw nerve with you for some reason.

 

[pxpaulx]

So much hate for the guys that can buy a vehicle in cash, honestly it’s not hard to save money and do so. My last 3 I paid cash for, haven’t had a vehicle loan in years. Why would you take a loan out if you had cash to buy it outright like you should be doing in the first place. All I gotta say is Dave Ramsey. Debt free and do what I want and every 7 years my money doubles, should have 5 million in 14 years. So why would I take a loan out for anything including a house? Wake up people it’s not hard despite what everyone says, they are wrong.

Dave's philosophy is really for those that can't initially control their spending and are loaded down with bad debt. I started down the FIRE path 5 years ago, hit our goal earlier this year! A free loan for 36 months means you can leverage that money in investments for the same timeframe - it is a no brainer.

If you have the cash in hand, taking the free loan instead is just extending the payout of the same money over an extended period. The problem is if you just sit on the cash anyway, it is a waste - go ahead and pay for the truck. If on the other hand you take that same money and invest it in an S&P index fund, even if earnings are just 6% (which is below the historical average) you'll be ahead over $2,400. If returns are 8%, that jumps to $3,400. Here is the earnings with withdrawals calculated and 6% return (monthly amount is from a loan calculator at 0%):

 

[altomav]

Thats what i wanted to know, thanks for the info. I was one to bet theyd guarantee it based up on the amount of my downpayment. I also want less to worry about paying and such as well given my min. wage salary etc. WIth the downpayment ill have my monthly payment should be pretty low even with not so great interest (we will see what they offer me etc). Just didnt want to go to the dealer after ordering it and being sent away because they wouldnt loan me the money needed ya know? This is all new info to me and a whole new experience and the people i know havent bought a new vehicle since the mid 90s so they dont know the process well either.

A goal would be to have a manageable monthly payment. You may or may not want to put entire 17G down because depending your situation, you may want to have emergency money just in case. As someone mentioned earlier, and I agree a 60 month loan should be the maximum loan term. 72 month will cost extra Grand in interest for a 25K loan. Put enough down payment where the monthly payment is good for you. And don't forget Insurance. Good Luck!

 

[brnpttmn]

Dave's philosophy is really for those that can't initially control their spending and are loaded down with bad debt. I started down the FIRE path 5 years ago, hit our goal earlier this year! A free loan for 36 months means you can leverage that money in investments for the same timeframe - it is a no brainer.

If you have the cash in hand, taking the free loan instead is just extending the payout of the same money over an extended period. The problem is if you just sit on the cash anyway, it is a waste - go ahead and pay for the truck. If on the other hand you take that same money and invest it in an S&P index fund, even if earnings are just 6% (which is below the historical average) you'll be ahead over $2,400. If returns are 8%, that jumps to $3,400. Here is the earnings with withdrawals calculated and 6% return (monthly amount is from a loan calculator at 0%):

That's also only true if you don't already have a significant cash reserve to pull from in an emergency. But yeah, if you're not retired (even if you are in most cases), you don't want to waste the time-value of money. This is particularly important for anyone in their 20s or 30s where that cash could be sitting in a higher yield/riskier investment for decades before it's needed to drawn for retirement.

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