Financing a vehicle?

[dustyanddaflames]

Hey all, just started snooping around into financing a new dodge truck, and have come across a situation I know a few of you will be able to help with.
Question being - do you lock in at 4.9% interest rate (which makes my payments a little higher than I was hoping), or should a guy run with the 2.75% variable rate over the same term (keeping my payments right around what I was looking at spending).
I am fully aware that the 2.75 isn't going to last forever, but you do chance that it stays low long enough that you can pay down your principal sooner, or you play it safe by locking in for another (roughly) $50/month.
Thoughts?

[Option84]

go for the risk. the economy is gonna be crappy for a long time, so don't worry about the rates hiking.

[arloiginla]

I'm assuming you are financing through your bank. Because if you are doing it through the dealership, either option is not great. Most dealers are offering 0% financing right now or close to it. With these economic times 4.9% is crazy (unless it's through your bank).

I did also notice that Scotiabank is offering 2.75% on standard personal loans for fixed rates. Just a heads up.

[dustyanddaflames]

Arlo - dodge is only offering 0% for 36 months, anything over is 2.75% variable, or 4,5,6,7 years with the interest rate going up each of the year if you lock in (don't quote me on this).

[Pinner]

Originally Posted by dustyanddaflames

Arlo - dodge is only offering 0% for 36 months, anything over is 2.75% variable, or 4,5,6,7 years with the interest rate going up each of the year if you lock in (don't quote me on this).

Years 4,5,6,7,..... No, if it takes 7 years to pay it off, you can't afford it.

Trucks are cheap now, good time to buy.

[Deegee]

Double check your cash payment, too. Might be advantageous to finance away from the dealership and give them a bank draft.

Dealerships are motivated to finance through their dealership options because they often get a cash reserve payment right off the top from the financer.

0% is often a scam.

[VladtheImpaler]

Just a thought from an old man - buy a used truck, and spend the extra money on hookers. As pointed out above, if it takes you more than 4 years to pay it off, you can't afford it, plus buying a new car in general is like burning money.

[Scoopdogg]

Originally Posted by VladtheImpaler

Just a thought from an old man - buy a used truck, and spend the extra money on hookers. As pointed out above, if it takes you more than 4 years to pay it off, you can't afford it, plus buying a new car in general is like burning money.

This. I would never buy a new vehicle again. Just as Vlad put it, its like burning money. You're better off buying something a couple years old and saving yourself some dough.

[chemgear]

But that glorious "new car" smell with all it's carcinogens!

[dustyanddaflames]

Originally Posted by VladtheImpaler

Just a thought from an old man - buy a used truck, and spend the extra money on hookers. As pointed out above, if it takes you more than 4 years to pay it off, you can't afford it, plus buying a new car in general is like burning money.

Hear ya Vlad, but I have been stung a couple times buying a used vehicle (transmission went in one 250 km after purchase), and looking for something reliable for the lady to drive from Lethbridge to Claresholm with.

I was thinking five or six years, not because we can't afford it, but within two years she'll be doing her masters, and I am going to have to shoulder the payments alone. This way we can keep payments low and put a bunch down on principal ASAP.

[MacDaddy77]

Originally Posted by dustyanddaflames

Hear ya Vlad, but I have been stung a couple times buying a used vehicle (transmission went in one 250 km after purchase), and looking for something reliable for the lady to drive from Lethbridge to Claresholm with.

I was thinking five or six years, not because we can't afford it, but within two years she'll be doing her masters, and I am going to have to shoulder the payments alone. This way we can keep payments low and put a bunch down on principal ASAP.

Your bes tbet would be to use a Line of Credit to purchase the vehicle. (this is what I do) this way depending on the rate you can get you cabn adjust your payments accordingly.

Some months I pay $900 payment on my vehicle and some months (Like December & January) I pay the minimum Interest payment of $125.00. This is the most flexible way and it also allows you to pay off as much of the loan as you want as fast as you want.

[VladtheImpaler]

Originally Posted by dustyanddaflames

Hear ya Vlad, but I have been stung a couple times buying a used vehicle (transmission went in one 250 km after purchase), and looking for something reliable for the lady to drive from Lethbridge to Claresholm with.

I was thinking five or six years, not because we can't afford it, but within two years she'll be doing her masters, and I am going to have to shoulder the payments alone. This way we can keep payments low and put a bunch down on principal ASAP.

Well, you can buy used from a dealership, or just get it thoroughly checked out. But, aside from that, you realize that paying 4.9% for 6 years is crazy given that virtually everyone short of Mercedes is offering 0% financing?

[Red Potato Standing By]

So where are thes cheap new trucks at?

And if everyone were to buy used wouldn't the used vehicles eventually run out?

[Sliver]

If your mind is set on buying new, have you at least looked at buying new in the States? I've done it, saved $12K and it's easy.

[IliketoPuck]

Heres one for you guys, give me your honest opinion.

I have a friend who just recently got a job at an O&G company in Calgary (1 month of employment), after graduating from school here in Calgary. Still has some debt (will take a few months to pay off), and lives with parents. He is planning on purchasing an '05 luxury sedan which will cost approximately ~20k, via 9% financing. I can't see the logic in it, and voiced my opinion against the purchase. Am I out to lunch on this one? Or should I just back off?

[bluejays]

^ I'm pretty sure now you can't buy brand new cars in the States due to government regulation. Used has to be a certain amount of time as well. I know of a couple people who invested the time in going down to the states and purchasing a used vehicle and the savings were totally worth it.

[The Yen Man]

Originally Posted by IliketoPuck

Heres one for you guys, give me your honest opinion.

I have a friend who just recently got a job at an O&G company in Calgary (1 month of employment), after graduating from school here in Calgary. Still has some debt (will take a few months to pay off), and lives with parents. He is planning on purchasing an '05 luxury sedan which will cost approximately ~20k, via 9% financing. I can't see the logic in it, and voiced my opinion against the purchase. Am I out to lunch on this one? Or should I just back off?

edit: I should also say that the payments will amount to roughly 1/4 of monthly income.

As long as he plans on living at home for the near future, I don't see the harm. But man, 9% financing is pretty high. Heck, my unsecured line of credit with my bank is at 5% and I think that's already high.

[Sliver]

Originally Posted by fleury

^ I'm pretty sure now you can't buy brand new cars in the States due to government regulation. Used has to be a certain amount of time as well. I know of a couple people who invested the time in going down to the states and purchasing a used vehicle and the savings were totally worth it.

Unless something has changed I'm pretty sure you're wrong. I heard the same thing when I bought my car in the States and it just wasn't true. Do you have a link?

[macker]

Originally Posted by fleury

^ I'm pretty sure now you can't buy brand new cars in the States due to government regulation. Used has to be a certain amount of time as well. I know of a couple people who invested the time in going down to the states and purchasing a used vehicle and the savings were totally worth it.

True. You can buy used and for the most part there are restrictions. Example : Many Hondas aren't importable to Canada anymore as 56% are made in Japan. There was a guy at Taylor in Great Falls : Doug Williams, and anytime I had questions on this he was great at providing the answers. They will do everything for you including putting on daytime running lights etc but you are basically limited to buying used. They even offer to pay for your hotel while you are down there for the weekend. The service that they were willing to provide was a shock compared to what you get here. At least google him and give him a shout and maybe he can talk you into buying used as it is a significant savings.

[macker]

Originally Posted by Option84

go for the risk. the economy is gonna be crappy for a long time, so don't worry about the rates hiking.

um.... http://www.bankofcanada.ca/en/fixed-...te_080910.html