Financing/Trade-ins/Credit

[BoostRabbitGT]

... I'll fix this later.

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[horned-toad]

For your first solo trip go east way up north and dip into Canada. Then swing south thru the Adirondack straight to ourisman in Manassas and buy your GT.

Your credit doesn't care unless you're carrying multiple loans outstanding like I am. (Mach1, scat pack) And even then Ford credit will write you a deal if you can fog a mirror

Your trade value doesn't matter if it's paid off or not.

I'm still trying to wrap my head around you live in God's country and you only do 2k a year? I do that in a month. And I'm spread across 3 cars.

 

[BreadBurner]

For your first solo trip go east way up north and dip into Canada. Then swing south thru the Adirondack straight to ourisman in Manassas and buy your GT.

Your credit doesn't care unless you're carrying multiple loans outstanding like I am. (Mach1, scat pack) And even then Ford credit will write you a deal if you can fog a mirror

Your trade value doesn't matter if it's paid off or not.

I'm still trying to wrap my head around you live in God's country and you only do 2k a year? I do that in a month. And I'm spread across 3 cars.

I'm assuming he doesn't have much of a commute or maybe he has an additional car for beater/daily purposes.

 

[Rocket Man]

with as little as you drive, and only 11k on your 5 year old car, why would you want to spend another 50k+ for another car to not drive. You are paying dollars per mile for every mile you drive. Keep your current car, invest (or save) the 50k you were going to spend, and you will be able to afford a place of your own to live.

 

[RaceRedder]

You want a GT to drive it just 2000 miles a year?
That's what I drive it in a month or sometimes 2.

Just buy the housing of the car and place it in your garage to look at. It will save you a lot of money.

 

[JAM486HP]

Never trade a car in on a new car, especially if you still owe.

Order your GT, going to take at least 3 months.

When GT is ready, sell the eco to Carvana, use as your down payment.

Then drive the GT as many miles as YOU want, Freedom

BTW Your credit will drop when you pay off the eco, though you will save thousands by selling it and bring the cash to the table buying the GT.

 

[Decio]

Being knowledgeable about credit is a good thing, as is asking questions. Are you concerned about your credit score because you plan to buy a house within a few years? I love my GT, but I don't think it's worth going deep into debt for. You have a nice ride now and a loan rate that literally cannot be beat. Why not pay it off and enjoy life without payments for a while?

If you move forward, sell privately. You'll never get what it's really worth as a trade. Any dealer will be happy to help pay off your loan ... by tacking the balance on to the new loan. Many dealers make deals to finance up to 125% of the value of the new car.

If you flip the new S650 for something else within 2 years, you'll have 2 hard inquiries on your credit. That's a much smaller hit than paying late or using 30% of your credit. There are much bigger factors that impact your score.

If you have the money, absolutely do whatever you want. If the new GT is a priority worth working for, get it. If money is tight and there are other priorities, consider keeping your low mileage beauty and save up for a 2027 GT with a 20% or more down-payment and what we can only hope are better interest rates.

Good luck with whatever you decide.

 

[Rocket Man]

I may not drive much, but I do enjoy driving. Admittedly my desire for trading in the EcoBoost for a GT isn't the most reasonable or practical, I get that. But at the same time, what if I don't get the opportunity to own a GT in my 40s, 50s 60s?

Don't take this the wrong way, I am crazy about cars too.
What if you don't get the opportunity to buy a home till your 40's or 50's? Will you be happy with that? Live with parents till then? Get your priorities right, there will be plenty of time and plenty of like new used cars to buy later. Lots of people don't have a car and rely on public transportation. You have a nice, low mile car to drive for years to come. Get the rest of your life together then other good things will come. Are you saving for the future? Just asking.
Time to make some serious life decisions before it's too late.

 

[horned-toad]

What if you don't get the opportunity to buy a home till your 40's or 50's?

I'm over 50 and never owned a home. Yeah I have pissed away 30 odd years of equity by paying someone else's mortgage for them. Don't care.

First my employment history is all over the map so renting let's me have full flexibility. And two, I'm gonna inherit my parent's place down the road in not too many years. My parents have bought one house after another after another every time they've moved. Sometimes making decent return, other times losing their asses.

Given that most people only stay put about 7 years on average, any mortgage term over 15 years is way too long. 10-12 is more like it. But then the prices would have to reflect that reality, but since the entire country is addicted to zero interest rates for 30 year terms, prices have gone parabolic since the 90s. It is unsustainable. But the fed is gonna try real hard to defy gravity.

Yeah renting your entire professional life is not with it's opportunity costs, ownership or renting out is no cake walk.

 

[horned-toad]

If you add a female to the collection you can guarantee the spending > savings. There are other intangibles of course...

There is no problem running multiple credit lines, ie both house and car.

Given how little you drive, and the free money on the eco, if you want to scratch the gt itch, just go rent one for 2 weeks. Then actually drive it.

Next Friday I'm going to rent a Maserati quadrofolio or whatever the hell it's called for a week. It's a grand, which is of course not cheap, but I can chalk up the experience for the hell of it. Then maybe next month I'll try the Lucid. But probably not.

I work next to Enterprise rentacar and they specialize in the exotic fleet spectrum

 

[Zig]

Since you’ve got time why not practice. Take the estimated extra you would be paying on the gt loan set it aside for this next year. Pretend your current payment is the new payment, most goes to current loan the rest goes to the savings line for the gt. Debit to income and variety of credit types are influential for scores.

 

[Decio]

If I get the GT I wouldn't be considering buying my own place until at least after I pay the GT off.

Why would two hard inquiries take less of a hit on my credit than using 30%+ of my credit? (I thought as long as I pay off my credit in full on time that I could use any % up to the credit limit. Granted I've never done so but I'm curious why this is the case.)

Selling privately...what is the general process of doing that like?

@Rocket Man , thanks for your advice. I get where you're coming from, and rest assured that if I do go through with getting a GT next year or the year after that it's not being done as a "midlife crisis" or impulse buy sort of thing. I don't take what I'm considering lightly. As it is though currently, I get along with my parents just fine, I'm single and not currently looking to be in a serious relationship any time soon (although I'm open to dating if those opportunities come my way and I choose to take them), and I am saving up for the future through the conventional methods offered by my work. I'm a very conservative spender and rarely make expensive purchases (if I do, I typically save them for the end of the year), and to that end I save more than I spend. I'll leave it at that for now so I don't attract more if any unsavory types my way.

Keeping your "credit utilization" low is one of the biggest components of credit. You say you pay in full every month - that's great! Many people can't do that, and while you will have your purchases approved up to 100% of your limit, it's not without consequence.

When do you pay your credit bill? Is it when the statement comes in the mail/email? If so, your high balance (another factor) is reported out along with your credit utilization. Even if you paid it in full, it was reported out at whatever the statement says. I get paid every 2 weeks, and I pay my bills the same way. Keeps everything low. My Experian credit score is 850 and transunion & equifax scores are about 20 points behind (different calculation methods).

Credit Karma is a website/app designed to make money by offering you deals on credit cards and financing offers. If you sign up and can avoid their offers, it is a useful tool in tracking your credit. Experian offers a monthly subscription, but if you read carefully there is a free option. I encourage you to research credit scores and learn about how other factors like average age of credit play a role in determining your score. If you haven't already, get a free copy of your credit report. If you find a website that charges you for it, run. It's a free report you can request annually.

I listed my Chevy Impala on Craigslist ($5) and cars.com (free) 3 weeks ago. I have a buyer picking it up today with a bank check. I sold it for $4k more than my Carvana offer. They need enough of a margin to make money off of flipping your car. If you need emergency money now that's one thing, but if you can wait sell it on your own. If you'd rather not haggle with the public get offers from other car buying services like carmax and others in your area. I'll be listing my wife's Challenger when I get home today.

Finally, be open to plans changing. I had everything figured out until I met the woman who became my wife. She wrecked my plans, and I wrecked hers. Give yourself the room to adapt to changes in your circumstances. If you lost your job tomorrow, could you pay your bills for 6 months? Most people can't. If you don't have a 6-mo cash reserve, I suggest making that a goal.

Getting off my soap box now...

 

[horned-toad]

If your credit score is over 740 it's not usefully adverse compared to over 800.

 

[Skye]

If I pay off my EcoBoost in full, then proceed to order and finance a GT, would my credit drop considerably more than if I choose to order/finance a GT and sell/trade in my EcoBoost while I'm still paying off on said EcoBoost?

Another question I have in relation to this is, how is credit affected if you finance a new GT, but then a few years later you see a new GT that you really want to get and decide to trade in your current one and finance the new one?

Would you be financing two cars then instead of one if the dealership takes back the older one?

Financing rates, credit scores and loan characteristics are highly-personalized. But I can think of a few topics you should be aware of:

- Debt to income ratios. Any increases to debt while income remains the same will reduce your credit score, while potentially increasing assigned interest rates, loan fees and having an overall negative impact on any financing

- Hard pull versus a soft pull. If submitting a loan application, the lender will perform a hard pull. It will have, at least temporarily, a negative impact on your credit rating

- Dry powder. You might do just fine moving from one vehicle to another, moving from one loan to another, etc. But life happens. It's the unexpecteds we cannot plan for and often affect us the most. If you needed yet more financing for something, however temporary, would you be able to secure that? Or would your debt-to-income be so high or your credit score so low you'd be tapped out or receive horrible terms

Regarding the question of moving from one GT to another, you'd lose every step of the way. You buy one, which incurs a cost of financing, depreciation, maintenance, etc. Just when you've lost the most, early on, you start anew.

I'm a very conservative spender and rarely make expensive purchases

It's great you need to live within your means. The ability to consistently do so is significant. But the quote above counters with the idea of buying a GT, and admittedly getting that initial rush, then potentially buying yet another one, the one you want.

To the last question, it depends. You have to sell the car, so the dealer can take title and do something with that car. Then, you'll have your new car. Returning to the first, would you still be paying on that one? That's going to depend on the current loan balance for the existing car and what the dealer gives you at the time of trade.

The rest of my comments are going to be more personalized. They are not intended to be disrespectful. I'm offering some additional insight on life and money in general.

Everyone needs a place to live. Everyone has some concept of retirement.

You're saving for retirement, probably through a 401(k). Cool. Great idea. Given your age, I'd be dumping as much as possible into the retirement savings. Being younger gives you a huge advantage. Given the choice of affording a GT or keeping the Eco while saving that much more, I'll always take the later. Delayed gratification. That's me though, and my thought on this topic is definitely not for everyone.

Most people have the idea they're going to work to a certain age, punch out and retire. But life isn't like that. Work environments can change from being ideal to sucking. You get laid-off. Most of us are going to at least temporarily leave the workforce to care for an aging family member. Or we might develop a health issue and leave all together. None of us have any idea. So, it's often best to save as much as possible, especially when young.

Reads like you've got a place to live and that's working well. But things can change. It's their house, their asset, something that might not be available to you in the future. Maybe your parents and family are loaded and this isn't an problem. Maybe not.

If you're comfortable you're going to continue to have a stable career, income and place to live, you can continue to finance cars. But for most people, things are not as stable. Changing jobs. Changing cities. Getting laid-off. Temporarily or permanently leaving the workforce. An unexpected bill or situation. Life and financial goals change.

You're working, saving and do not appear to have much, if any debt. You're doing really well. I'd take advantage of that and forgo any future car purchases while saving as much as possible for other needs, housing and retirement. Drive the Eco until the wheels fall off. Taking this path will set you up for things better still in the future. Yes, you're right. A V8 Mustang might not be in production later. The Mustang might cease being produced at all. We don't know.

The paragraph above gets back to individual situations, following your passions and all that. I offer an alternative. There's a healthy market for the Mustang, in used cars and aftermarket parts. The Mustang isn't going anywhere. Cherished models of all kinds will be available well into the future.

I'm at one end of the spectrum: I secured certain things before buying my car. I waited a long time. Others I know personally are at the other: they live and exist for today. Most of us are in-between. None of us is wrong.

But while continuing to pay on the Eco, I would spend time playing some what-ifs. Having a great car and enjoying that is a blast. Better still when you're comfortable in the knowledge all grown-up stuff is taken care of and out of the way.

Best Wishes in whatever you do.

Edit,

Regarding Employment,

I always thought this: go to work with the idea that today is going to be your last on that job, with that company, for whatever reason. What then is your plan for the next six to 12 months? How would you fair? If you had to change cities to secure another job, could you?

Regarding Retirement,

"Congratulations! You're retiring today!". Hooray!!!

"You stopped working today. You'll not have access to employment income for the next 30 years." Doh...

 

[roadpilot]

Life is short. Buy the car.

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