i have a 2002 magna wagon and i own it out right. As does my DH
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i have a 2002 magna wagon and i own it out right. As does my DH
We have currently have a Ford wagon and DH has an ugly 1990 Landcruiser ute which we paid cash for both.
We have had quite a few cars between us and all have been paid outright for except a brand spanking new 2005 Holden Astra which I bought with a 22k loan over 5 years. We sold it about 1 year later as we were getting married and fell pg.
I'm curious... this is to those who say they would never get a loan and the thought of owing money scares you, is a mortgage excluded from that statement?
DH owns his car outright, paid cash. We got our current family car through a loan. DH is about to upgrade his car and will run a chattel (sp?) mortgage, which means that the business pays for it. Much better deal financially, according to our accountant.
I think a house mortgage is very different. It's an asset that is (usually) increasing in value, and will put you in a *better* position financially.
If you can't afford a $40K car outright, a $7 K car will do the same job for you. It's just not the same deal at all with houses.
If your debt on your car has a tax advantage for you (or your business) then that's different.
we own both our cars. bought mine with cash- it is a 2002 commodore. this was the most we could afford at the time.
OP- in answer to your question about mortgages. i can't speak for everyone else who has mentioned it in this thread but i can give my personal opinion- i don't think that a mortgage is the same as a personal loan as a mortgage is paying off an asset. the house is also appreciating in value and paying a mortgage saves us from having to pay rent, as we have to live somewhere. we would prefer to have no mortgage at all, of course, but i would much rather be paying a mortgage off on an asset than paying out money on a personal loan on a liability(car) itms?
isnt a car anasset in some sense aswell?
Not all cars decrease in value..
I think you're almost always better off putting the money elsewhere (IMO).
which cars don't decrease in value?
The ones made out of gold
None, unless you plate them in gold :lol::
Ausgirl, I took out a small loan to pay for a 2000 Mitsubishi Lancer, which I paid off a couple of years ago. We have another personal loan of $15k from our wedding (NO, my parents didn't pay because they don't have a spare $20k in the bank) that we are half way through paying off so I will probably re-draw on that for another car which would be second hand, of course. And then when we finally have a mortgage, whatever we have left to pay will all be rolled into it.
So pretty much yes, mortgages are excluded from statements about never owing money?
I get that, I see mortgages as a kind of "good" debt... ITMS!
As for cars that appreciate? My DH has a fully restored 1967 Chevy Impala, in immaculate condition... Pretty sure that'd be worth more now than what his grandfather paid for it in 1967...!
I wasn't one who said I would never take out a loan (except for that I doubt I would for a car as for me, personally, I don't see it as something that is required or neccesary) but did say I never had done so and the thought of owing money scares me and yes, a mortgage is included in that sentiment; possibly even more so due to the large scale. Loans are a big responsibility and I don't think a little aprehension is unwarrented or odd. A mortgage is different though in that it is something I would do and plan to eventually but I would be wanting a substantial deposit first and be beyond comfortable with the repayments. I think it will be a few more years of savings before that is something we even start to think more seriously about and it definitely will be for a modest amount although last time I was at the bank they tried to 'sell me the dream' and I was pretty shocked how much they thought was appropriate to borrow. The main difference is you do need somewhere to live and the alternative has its own financial drawbacks. A car, to me, is more of a luxury (others see that differently, half the reason we rent is because it means we can afford to live somewhere where walking to the shops, park, doctor etc is a reasonable option and we want that to continue when we do look into buying a home) and the fact they depreciate so quickly are the reasons I would not go into debt for one and can see myself always opting for pre-loved versions.:
Some cars do increase in value. Dh is very into ok'd Volkswagens and they certainly increase in value - infact all the VW's we have owned we have made money on.. Old cars that are sought after increase in value...
Oh yeah, I forgot about old cars! My dad had a 1970 Ford panel van in which he has restored, looks amazing and it was my wedding car :)
Fair point! I do feel a little sick every time I see my bank account!!! :D:
Pretty sure my own car goes down in value every time the kids get in it :/
We own our car outright, even DS16 owns his car for a grand total of $500. DS is the smart one here, he bought a HG Kingswood and will be restoring it and this is a car that definately increases in value.
Regards,
Dianne
I am another that would never borrow money to buy a car. We have always paid for our cars in cash and always bought privately second hand. We have a 2009 Ford Territory, 2006 Mitsubishi Lancer.
We also own two unregistered cars, a 1969 Fiat Bambino and a 1913 Wolsely Roadster. We can’t use either of them at the moment because it’s just not practical with kids. :(
we're more who wouldn't take a loan to get a car ...
DH and I couldn't afford a car for the first 4 years we were living together!! We were pretty nifty with our train tickets and rollerblades, and could still get most places we needed to go ...
But when we started fostering teenagers, we really needed a car (for 3am calls to attend the police station, hospital, to collect kids from gatherings which had gone awry, etc...) so we bought a noisy but reliable old mazda. It was kind of ugly, pretty ancient, but it drove well, and we could afford it ...
When we got some more savings behind us (another 4 years later!) we traded it in for a pittance (after lengthy negotiations by yours truly) and managed to score a much more reasonable (but still second hand) 2001 Ford Falcon - the best part being that it takes gas, which saves us about $30 a week in fuel.
But we're not "car" people, and we basically only use cars as a means to an end - so I can't imagine spending $20K or $30K - let alone $60K or $100K on a car! Even without all that interest.
I completely understand why some people do - in the same way that I understand why some people spend $180 every six weeks to get their hair coloured etc - but I'm pretty happy with my natural colour, so I'll keep my $180 in my pocket ... and spend it on books or something ...
(whereas my friends think I'm nuts for buying lots of books, when you can borrow most of them from the library for free ... driving there in your shiny red 2010 MX 5 or whatever ...)
:p
strokes for folks, says I.
No. We bought both our houses outright. We used to have a mortgage but we sold and rented instead. Being free from the mortgage gave us the psychological freedom to start our own business (we didn't have a home to lose so it didn't matter if it failed). If we still had the mortgage we wouldn't have the financial freedom that we enjoy.:
Eta - I love to drive so I buy the best car I can afford but I'm another that buys secondhand privately. The thought of losing 20% driving off the lot is enough to make me cry. Tip for the people who buy privately. Do a keyword search for quick sale.
We own a 2001 Toyota Lancruiser outright, and I have a company car through our business so it is a novated lease. It's a Hyundai Santa fe, I never had a loan before, but needed a bigger car with the kids and felt safer with air bags, abs etc. Dh had previously had loans, but he paid then back fast. We will swap mine over at the end of the lease, we almost did it early but I love the car like BG.
We now own our car outright, but we did have a loan to begin with, which we paid off within 3years, instead of the 7 the loan was for. I get the impression that some pp's think that people only take out loans to buy 40k+ cars. I wish lol! We did buy a brand new Holden Astra wagon back in 2007, but we bought it brand new with the thinking that it would have to last us 10+ years (and it was much less than 40k). We are now probably going to trade it in within 2 years, as it just won't fit a third car seat. We're hoping that we can pretty much do a straight swap because while I'm not at work, we can't afford a loan, so will have to go an older magna or commodore. But if we can't do a stright swap, then we probably end up getting a small loan to cover the difference. I'm also not ruling out getting a loan once I go back to work full time to buy a newer car.
For us, a car is a necessity. And other than having to fit 3 carseats in, we do alot of camping so the next car will have to be a decent size.
We also own DH's motorbike outright.
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.
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.
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. :doh: We're hoping to upgrade it sometime next year, and we will be buying second hand and getting a loan.
currently we own a 04 ford falcon bought in 05 paid cash
a 2009 triton bought brand new on lease ...
since we have been together we have owned a
89 Patrol 2nd hand owned outright traded it in on a 2002 Nissan patrol bought brand new paid off in 3 yrs :)... we then traded it in (sort of the cardealer bought it) 07 on Holden crewman on lease, then due to the fact the crewman back seat is so small when we were pregnant with Luke we decided to upgrade we paid out the lease the traded same as patrol to crewman cardealer buys the first car )the crewman in on the triton, our lease on triton is up in 14mths still un-decided whether we will pay it out or re-lease, or start a fresh with another triton if we start a fresh we will pay out this one and trade it in on new one
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 :doh:
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)
We don't have a car for the simple reason that we cannot afford one outright right now...we don't like to live beyond our means and be paying off something that will rapidly depreciate (I can't see us buying and fixing up a classic!). Although we could afford car repayments, it's just not what we personally want to do. We are lucky though, we live in a large city and have access to public transport. Every bit of spare cash we have goes towards a deposit for a home, for our situation personally a first home is probably the only thing we would take out a loan for, everything else we've ever purchased (whitegoods, electronics etc) has been cash. It's just the way we are with money, I guess :dunno:
We own both cars outright. Ford Territory 2010 and Toyota Camry 2008. Personally we wouldn't ever take out a loan to buy a car. An example why:
My brother took out a loan to buy a car, then sold it when he wasn't around to use it. He doesn't have the car but is still paying off 3/4 of the loan.
No, not really, a car costs you money and I don't know of anything (other than maybe collectors type cars) that appreciate in value. A car won't get you much value as an asset - I know a couple who wanted to loan (wait for it) $60000 to buy some top of the line commodore or something, even though they were earning pretty good money, bank said no. Had that been a loan for a home, no worries.:
Not sure why that reply was directed to me....:
i'd love to be in a position where a car wasn't a necessity - but out here, PT isn't an option for most things - if you don't have a car, you have to rely on taxis. and they are a damn site more expensive long term! for some people, buying a car outright isn't an option. the car we're about to sell was bought outright only because my brother owed us money and i called him to help. we were in the middle of selling our house to move, had zero spare cash, DH had just lost his job, and the car we had was totally unsafe for anyone to use. so yes, we got that one outright, but if the only way to get a car that is safe is to take out a loan, i don't see a problem with it. i'd rather get a $5000 car on a loan than a $500 one that is roadworthy only because someone knows someone that will overlook those things that will make it unroadworthy if it's driven again...
Just to clarify - I don't have any problem with loaning money for a car - I did for my second car (first was an old clunker I paid cash for) - I would never, however loan a ridiculously large amount of money to own a 'fancy' car or to keep up with the Jones' so to speak... I personally can't justify investing large sums of cash in something that loses money as soon as you drive it off the car lot.
I'd say that he had a personal loan for this, as opposed to a car loan. We wanted to roll over the loan from one car to the other, and we were told by both the bank and the car yard that it's illegal, because the car is the security. If you sell a car that has money owing on it, then the bank can't claim the car if the loan is defaulted on. We had to pay out one loan, then sell the car, then get the loan for the second car. So we still rolled it over as such - the amount didn't change, we just had to pay one out.:
I'm with you here. I was proud when I was approved for my first car loan, brand new car back when I was 20 :) Best decision I could have made as it delivered me safely and reliably to my work, NEVER missed a beat.:
It's just money and I look at car loans with the attitude of... Why save for four years (or however long it takes you) when you could have the car now by paying the same amount in repayments (or close too) as you would be putting away and saving.
I don't look at cars as a waste of money I see it as a means to - make money by taking you to your employment, freedom to venture places, safe transport for your family.
My maths isn't great but I think that a 10k loan over 4 years at about 12%p.a would cost you about 2.5k in interest. That's not really close to the same amount. It's a lot more.:
We lease our cars as we both work for our own businesses. Which makes leasing the best option finance and tax-wise. But a business leasing package is complicated to explain (it's pre-tax dollars for one, so the interest well and truly comes out to less than the (approx 30%) tax I would pay the ATO paying myself the salary to then buy a car, ITMS).
Previously, we have owned our cars outright, I once paid off a personal loan for a car when I was young (better interest than a car finance package).
My dad restores vintage cars for a hobby. He has... A few. And they're all worth a pretty penny, but they're all as moody as they come too XD
It is possible for some cars to be an asset and appreciate in value (you just need to do your research and get the right one) however I dont know anyone willing to part with one once they get their hands on one.
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.
I have car envy whenever I see a gorgeous vintage car (Epacris' Wolsely turns me bright green) but I would never have the dedication to keep one on the road. Unless maybe it was a vintage muscle car....: