How are you financing?
Le Mans Master
Joined: May 2005
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From: FORT LAUDERDALE FL
Race Director
Joined: Aug 1999
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From: Bluffton SC via Canton Oh
Remember there is a priceless satisfaction of being debt free.
I'm retired 6 years and living comfortably off a pension and SS. Honestly I'm thinking whats going to happen to that nest egg? Kids don't need it and we had them young. By time I plan to kick off they will be nearing retirement. So I was frugal all these years, did OK investing and now its like what do I do with this money? Like a dog chasing a car if he catches it he does not know what to do.
I'm retired 6 years and living comfortably off a pension and SS. Honestly I'm thinking whats going to happen to that nest egg? Kids don't need it and we had them young. By time I plan to kick off they will be nearing retirement. So I was frugal all these years, did OK investing and now its like what do I do with this money? Like a dog chasing a car if he catches it he does not know what to do.
Race Director
Joined: Sep 2016
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Your best rates are going to be at a credit union, if you can join one.
The best rate is to pay cash, if you can afford to.
Because if I'm paying 8% on a loan, and earning 5% on money in the bank, I'm losing money. Especially after I pay taxes on the interest earned. Banks make money on the difference between what they pay and what they charge. You're very unlikely to find a loan at a rate lower than you can earn on savings. Even on a CD.
The best rate is to pay cash, if you can afford to.
For all of the ballers out there that paid cash for their C8, explain something to me. If a person had the $75k to $100K in cash to buy the car outright, why not leave the money in the bank where it would or could gain interest, and just have the payment auto drafted out of that account?
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Racer
Joined: Apr 2019
Posts: 264
Likes: 130
From: Effingham county GA
Peoples circumstances vary, and the decision about how to pay for a major expense varies. For example, take a retired individual who withdraws 90K from their IRA or 401K to purchase a C8 in cash. In addition to an IRA or 401K account, this individual has income from social security, a traditional pension plan, and other regular monthly income. The tax liability for withdrawing 90K will be high, perhaps 24 or 32 percent. Therefore, it may be sensible for this hypothetical person to borrow a portion of the expenditure for a term of three years.
Race Director
Joined: Feb 2005
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From: A sympathetic, well-meaning, elderly man with a poor memory
St. Jude Donor '07-'08-'09-'10
Peoples circumstances vary, and the decision about how to pay for a major expense varies. For example, take a retired individual who withdraws 90K from their IRA or 401K to purchase a C8 in cash. In addition to an IRA or 401K account, this individual has income from social security, a traditional pension plan, and other regular monthly income. The tax liability for withdrawing 90K will be high, perhaps 24 or 32 percent. Therefore, it may be sensible for this hypothetical person to borrow a portion of the expenditure for a term of three years.
The bottom line is that the cost of borrowing money will always exceed the cost of loaning money in a normal economy. When rates were absurdly low (2-3%) I took every penny they would give me, as it was pretty hard to not make 5% minimum with a very reasonable risk. The margins just do not justify the risk at this point to borrow money at 5% thinking that I can do better on the other end.
Le Mans Master
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From: Florida
Race Director
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From: Wesley Chapel, FL Las Vegas, NV
Le Mans Master
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From: Morrill Nebraska
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Le Mans Master
Joined: May 2005
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From: FORT LAUDERDALE FL
Race Director
Joined: Apr 2005
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From: Wesley Chapel, FL Las Vegas, NV
How does this address the OP's question?
Intermediate
Joined: Oct 2022
Posts: 31
Likes: 25
$26,500 from Navy Federal Credit Union 5.04% for 60 months and $502 per month. Been saving like a madman and put rest down in cash. My goal was $500 month payment.
830’s credit score and low income to debt ratio and that’s the best rate I could find. They advertise as low as 4.74% for 60 months, but couldn’t explain why I didn’t qualify for the lowest advertised rate…this was yesterday…
830’s credit score and low income to debt ratio and that’s the best rate I could find. They advertise as low as 4.74% for 60 months, but couldn’t explain why I didn’t qualify for the lowest advertised rate…this was yesterday…
Similar numbers as you (830s FICO, low DTI, etc.), but got the same rate from them - frustratingly, no idea why either. Now I'm strongly debating fiance vs. cash. I earn almost 5% on my savings (that's pretax, however), but may just purchase with cash with the plan to aggressively "make payments" back to myself (my savings account) over the next year. Open to any input on the ideal method.
Advanced
Joined: Aug 2023
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For all of the ballers out there that paid cash for their C8, explain something to me. If a person had the $75k to $100K in cash to buy the car outright, why not leave the money in the bank where it would or could gain interest, and just have the payment auto drafted out of that account?
If you paid that money out, it could still take a person years to re-save up the $75k to $100k. Of course everyone on the internet is wealthy and can re-save that amount in 1 month. LMAO.
If you paid that money out, it could still take a person years to re-save up the $75k to $100k. Of course everyone on the internet is wealthy and can re-save that amount in 1 month. LMAO.
Melting Slicks
Joined: Jun 2004
Posts: 2,090
Likes: 1,361
From: Macon GA
Similar numbers as you (830s FICO, low DTI, etc.), but got the same rate from them - frustratingly, no idea why either. Now I'm strongly debating fiance vs. cash. I earn almost 5% on my savings (that's pretax, however), but may just purchase with cash with the plan to aggressively "make payments" back to myself (my savings account) over the next year. Open to any input on the ideal method.
Last edited by BandDirector; Oct 2, 2023 at 10:19 PM.
Safety Car
Joined: Jul 2013
Posts: 4,408
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From: Granada Hills CA
I think I figured it out! The loan hit my App today and it has it listed as a 61 month loan! I asked for a 60 to get the 4.74% rate, but the best I can figure out is they pushed my first payment due on 11/23/23 and the month until then is making it the 61st month. It’s too late for me, but ask them to quote you a 59 month loan and see if you can get the 4.74% and then if they add a month to it, it’s still 60 months to qualify for the 4.74%. Worth a shot! Good luck!