Do you have a car loan or own outright?

[Glamourcide]

Regarding gong into debt for a liability... I think sometimes it's the best way to go. DH and I don't have a huge amount of money, and for the first few years we were together, DH's credit rating meant all we could get, was what we could buy with cash - and we didn't have much of that at all after paying dead rent and all the other bills. Our first two cars were absolute pieces of crud, but we couldn't do any better - private sales are great if you manage to find a good one, but around here people seem to think it's reasonable to ask $10k for a 20-year-old car that needs another $5k (minimum!) spent on it to get it on the road. We couldn't afford the costs of travel to chase up better deals down south. We paid cash for our first two cars, but had to spend even more money on keeping them running and in roadworthy condition, and they were on their last legs and had to be resuscitated quite a few times - sure, a car's a car's a car, but when you're relying on it to get to and from work (public transport in this town consists of expensive and unreliable taxis and a bus or two during school hours - DH works much longer hours than 8-4!), and dependent upon it in cases of emergency or need that car to safely handle a 1600km round trip to visit family at Christmas... well a privately-purchased bomb isn't good enough.
I had absolutely no qualms about going into $17k of debt to buy our VZ - it was two years old (compared to our first two, which were 20 and 15 years old respectively), had a full history provided, came with a fantastic warranty, and was (and still is) in brilliant condition. It's never so much as hiccupped on us, drives beautifully and will last us another 10 years if we treat it well (which we certainly do). We own it outright now, but even if we didn't, we would be eternally grateful for the chance to buy a reliable family car through a reputable dealer who is happy to help us out if we have any issues, rather than having to take our chances with a private seller who could lie to us about the car's history or condition, and risk paying out big $$ for something that turns out to be an absolute lemon. I'd go into debt over and over again in order to have the peace of mind of knowing that, while not flashy or fancy, the car I'm driving is in good condition and is going to get me where I need to be, when I need to be there.

[LionsandBears]

That's a good point Glamourcide. I often say a car is an expensive toy, but I wouldnt be without one, so it's more than that. It is not an asset though. I went into debt for my first car - just $12k. I wouldnt have been able to buy without taking out a loan. Paying it off taught me about saving etc. That and getting hypnosis to help me sort out my spending problem. My goal is to not take a loan out for another car, but having a decent car that runs reliabley is important too. If I needed to get a loan, I'd want the option of paying it down faster. I just hate how much I've wasted in interest for things over the years.

[Miss.September]

For me, I don't think about whether or not my car is a financial asset. It's my car. We got it right when we really couldn't afford it, but I had a Rav4 in pristine condition that I'd gotten from a top notch dealer. After having it for three months, the transmission started dying (the car was six years old). We had to spend $5K on a brand new transmission, or trade up. So we got a really good trade in on it (traded to a dealer who said there was nothing wrong with it) and it cost us the $5K extra to get the Ford Territory. We rolled the loan over and the loan is less than the value of the Ford. I'm not worried about the depreciating value of the Ford, because I have no interest in selling it. We'll pay off the loan early (we're already in advanced payments), it's big enough for our family and dogs, and also strong enough to tow our camper. So to me, that car is worth a million dollars.

DH's van, however....the one we bought outright.....went into the mechanics yesterday after not being serviced for 59,000kms, was serviced and tuned and sorted out, was running fine before the service and today it broke down. We're hoping to upgrade it sometime next year, and we will be buying second hand and getting a loan.

[ElleJay]

Ugh, and this is why I should never participate in threads like this - It makes me feel horrible that I'm proud that I've got my first car on a loan

I don't see my car as an asset or such, I see it as a means of getting to work, get my DS and my lil family to where we need to go etc. I would kill to have had the cash to pay for a car outright (well, I did but I needed to keep it because of being on unpaid maternity leave at the time and we had bills piling in and such)

[peanutter]

Ugh, and this is why I should never participate in threads like this - It makes me feel horrible that I'm proud that I've got my first car on a loan

Don't feel horrible - it's just a different position

What I hear people saying is that either they find it to be worthwhile and/or financially savvy to get a car on a loan or lease/purchase arrangement, or they don't.

This is why I used the comparison of differing opinions about buying books - I like owning books, so I buy them instead of borrowing them from the library ... I can take as long as I want to read them, I can loan them out, I can highlight parts if I like, I can read them in the bath without freaking out if it gets a little wet, and I can easily pluck them off the bookshelf if I want to re-read bits. I like owning them.

Some would say this is a complete waste of money. I don't think so.

I would not spend $100 on a Grand Final ticket - I don't particularly enjoy football, and it's going to be on the telly ... so I'd rather spent $100 on sausages and munchies and drinks, and have some friends over and watch it together on the telly ... which is what we do basically every year! But some people get $100 of value out of going and watching it in person.

Personally, I would find paying interest on a loan for a car to be a waste of money - we've basically always lived near a train station, my school/uni/work has always been near a train station, I've been catching the train since I was 2 years old, and unaccompanied since 10 years old, I have been roller skating and blading since I was 6, and so until we were responsible for other people's welfare, DH and I had no personal need for a car ... and we're not "into" cars, so we've never wanted to spend much money on them ... something reliable with four wheels and room for a carseat were the only real requirements ...

Many of our friends wanted nicer cars, or wanted one earlier, and so they got a loan. They did the maths, crunched the numbers, and decided they were happy to spend $x to obtain item y.

Their prerogative.

Nothing negative, nothing positive.

Nothing wasteful, nothing shallow, nothing stupid.

It's not even about different values ... it's about what experiences and things we value highly.

Just different views, different people.

JMO.