No mustang for me :(

[Pdaddy1280]

I really don't understand why people finance vehicles. Oy the rich people are profitting from financing. The poor people are paying the debts of the rich by doing so.

People having 60k car financed for 8%

You know how much money that is?

That's 4800 USD of interest that you have to pay EVERY YEAR.

Many people think that this 8% is based on the total amount. They think when you get 60k from the bank, you have to pay them 64.800 back at the end of the contract.

Nope.

Let's say you finance it for 5 years.

Instead of the 60k, you paid 60k + 4800 x 5 = 84k for that same car.

I will never ever pay 84k for a car that is just 60k.

Technically, it isn’t $4800 per year based on the amortization schedule. The amount of your payment that goes to interest goes down as you pay down the principal. That absolutely doesn’t take away the validity of your point. Most people DO only focus on how much they can afford for a monthly payment.

In defense of SOME, they don’t have enough money to pay cash for even an inexpensive vehicle that will get provide them reliable transportation long enough to save up to pay cash for a car. The problem comes in when they buy more car than they need simply because they can scrounge up enough money for the monthly payment. It becomes an endless cycle of debt. It can make sense for some to finance a vehicle if the interest rate is low enough. I also understand that the example I gave doesn’t apply to someone buying a brand new $60k+ Mustang.

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[RJV15]

I really don't understand why people finance vehicles. Oy the rich people are profitting from financing. The poor people are paying the debts of the rich by doing so.

People having 60k car financed for 8%

You know how much money that is?

That's 4800 USD of interest that you have to pay EVERY YEAR.

Many people think that this 8% is based on the total amount. They think when you get 60k from the bank, you have to pay them 64.800 back at the end of the contract.

Nope.

Let's say you finance it for 5 years.

Instead of the 60k, you paid 60k + 4800 x 5 = 84k for that same car.

I will never ever pay 84k for a car that is just 60k.

First of all, not everyone wants to save the money and wait when its in their budget.
Seconds of all, your math is way off. Interest goes down as the term progresses because your principle is lower.

In general I agree! 8+% interest rates are unacceptable. The whole reason they are that high is because exactly what you said, they dont want you to buy a car. Americans can't stop buying things!

 

[Rio Lobo]

I really don't understand why people finance vehicles. Oy the rich people are profitting from financing. The poor people are paying the debts of the rich by doing so.

People having 60k car financed for 8%

You know how much money that is?

That's 4800 USD of interest that you have to pay EVERY YEAR.

Many people think that this 8% is based on the total amount. They think when you get 60k from the bank, you have to pay them 64.800 back at the end of the contract.

Nope.

Let's say you finance it for 5 years.

Instead of the 60k, you paid 60k + 4800 x 5 = 84k for that same car.

I will never ever pay 84k for a car that is just 60k.

Given 60k at 8% for 5 years, total interest is $12,995 not $24,000

 

[FredBGT]

Don't feel bad. It happens. You are better off walking in these cases even if you can swing the payments. Got told today that I'm getting laid off so I may see about cancelling my order. Worked my way up to #2 there. You won't be the only one not driving a new Mustang GT. Win some, lose some. Take it in stride.

 

[S650 GT]

Given 60k at 8% for 5 years, total interest is $12,995 not $24,000

Even 13k over msrp is a crazy amount of interest and that would be cash for me.

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