shoeys08dkcandygt

hey guys i am pondering trading the 07 gt i have in on a redfire premium gt. i have 30k on the 07 and with no money down get into this 08 with no miles. start fresh on the warranty again. the one torch one i have now i wrecked a few months after i bought, in the rain. i took out the rear decklid, spoiler, bumper, drivers door, and pretty muched scratched something on all the other panels beside the pass door. ins paid 8k to fix. i would have the same payments i have now except it would be for 72 months @ 1.9%. i am on a 5 yr 60 month now. what do ya'll think i should do? get out of the one that could cause me a lot of problems in the future or get the 08? i know what i want to do bc i think a lot more is problems could come out of the rear end with the lick it took. (no struts or rear end was looked at when they were looking and fixing the body panels. just wantin to really know how many of you think the 6 yr is a bad idea. i know i wont keep it that long. but seems like a no brainer to me same payment no money down just one yr longer. thanks in advance for any help.

oh yeah i get A-plan too. $29.7k car is mine for a lil over $26k.

Mustangshar

That's a long time for an auto loan and I'm guessing there is negative equity on the one you have now? Here's what will happen in 3 years when you decide to trade it in. You'll owe so much on your car, that you can't trade it in without a huge down payment included. But I could be wrong here : ) Pretty hard to trade in a car worth $15K when you owe $30K.

But you may not have negative equity in your 07, but we usually do lose a few thousand trading a pretty new late model in. I'm NOT a good person to ask, a total new car addict!! But if I smashed mine up, I'd be trading it. Good LUCK!!!!

SirKnightTG

I was going to trade mine in on an 08 manual. There would have been negative equity b/c I owed 19K but was offered as low as 13.5K (that was at Carmax). So there was that plus the brand new price. I would have been in the hole ~10K. It will be cheaper for me to put a manual in this one...A LOT cheaper since I could get work done cheaper than most.

So I think if you owe more than 10K don't trade it in. You'll get boned.

shoeys08dkcandygt

hey guys i got a trade value of 18k and i owe 17.5k. no negative equity. like i said my mom works for ford credit. i get cars at invoice, this time im gettin 3,200 off the msrp. so knowing this should i trade?

torque_is_good

We all can fabricate "reasons" why we should get a new car. Only you can make the decision. What is your lifestyle like? Do you live at home? Do you pay for anything yourself? Do you have future bills coming in the 4 year future such as rent, down payment, college, marriage etc? An automobile is a depreciating asset. If you have mucho dinero ( a lot of money) then view it as a toy and go for it. So, you can get rid of the the 07 which has perhaps 3-1/2 years left to pay? Then, you get an 08 and have 6 years left to pay.

Let's say the payments are $400 per month. You can stop paying for a Mustang in $16,800 or in $28,800. It's up to you to make the financial decision because they are the same car.

Oh, when you are at the mall, nobody knows if you took the bus, rode a bike, or drove a Porsche....think about it

Mudflap

If you have no negative equity, are putting down nothing and yielding the same payment, I would do it.

I always do 72 months. Why? Because I can send it extra $ if I want to, but I don't have to. Heres the thing, in my book you are either buying a car for cash outright, or you are borrowing it and owning it gradually. If I sign up for high payments and lets say, a 4 year loan, so I'm paying out the nose... what happens when 2.5 years into the loan the car gets totalled? Guess what, the insurance company may cover the cost and I can pay off my loan, but with how much cars depreciate, I will have lost more money than I had to. In the same scenario with a 72 month loan and a $4/month GAP policy, I will be out less $. It all depends on how you look at it.

As far as the negative equity goes, I rolled about $7k into this new one. Sure, I could have written the dealer a check for $7k, but why? I can yield more profit in investing that money than its costing me to finance it at 5.8% for my 72 month loan.

Many people are wrapped up in having no negative equity, or paying off the car as fast as possible, or trying to get short terms etc... my advice is, look at the situation objectively and ask yourself how much its costing you to finance the car, vs what else you could be doing with your money. You'll find that most filthy rich people don't even pay cash for their homes. They can make more money using that cash to invest and for other ventures, than they pay in interest on the home loan...

dkersten

But if you were on a 4 year versus 6 year loan, at 2.5 years you would have way more paid off so that if you totalled it, and the insurance company writes you a check you can pay it off and still have cash for a down payment.. Any way you look at it, the faster you pay it off the less you pay in financing, and the more likely you are to stay ahead of the vehicle's depreciation. If you total the car and it is someone else's fault, and you are at a negative equity, their insurance company is NOT going to pay off your loan, they are going to write a check for the value of the car, and you could end up owing. In some cases you MIGHT be able to get the insurace company to replace the car so that you are not out cash out of pocket. However, your own insurance company will probably not replace the car, but just write a check, and if there is a difference in what you owe, sorry, have a nice day.
But the question is: did you? If you did NOT invest that money and actually make a return of greater than 5.8% then you lost money. I don't know about you, but the last few months my investments have been losing money.. in the current economy, your money is not earning the historical average of 10%. Paying any loans down right now is the safest bet with your money right now because you are guaranteeing at least a return on investment of that interest rate.
A "filthy rich" person that finances a home is looking for a tax shelter, not just to free up their cash for better investments. That same person probably pays cash for his cars and other purchases, but houses are a tax shelter.

Unless you have a substantial amount of cash floating around and places to invest it that will almost guarantee a "higher-than-prime" rate of return, you are always better off to pay off a purchase as fast as possible. Most people live paycheck to paycheck, and if that is the case you are throwing your money away on a long loan versus a short loan. The only real excuse for a long loan is to buy something you cannot really afford, or to keep your cash for other stuff you want and make the bank pay for your car, and either way you are losing money to satisfy a desire to have something now instead of when you can afford it.

Then again, that is what being an American is all about these days.. and almost everyone is guilty of it. I know I am..

Mudflap

I have investments in private endeavors that yield more than "market average". I don't have much of anything in the stock market actually. My point was to get the guy to think about things objectively when it comes to finances. Everyone has their own situation. Look at what yours is, and decide what makes the most sense for you. In all honesty, I could have written a check for this thing, but I'd rather use the $ elsewhere.

I don't keep a car longer than 3 years, so every now and then I'll roll over some negative equity, and sometimes I'll pay the piper... just remember the piper always gets his $ in the end. Cars are not an investment unless you're in a league where you can visit the Barrett Jackson auctions.

deekum1627

seems like you can get a goot deal for a one yr longer i would do it you will have a brand new car and its hasnt been in a accident. i say go for it

dkersten

I play the same game with financing something I could pay cash for so that I can have the cash for other stuff, but that still doesnt make it a smart decision.. haha. But then again I am not your typical American with $20k in credit card debt either, so I can afford to make payments and still spend my extra cash on other things.

If the original question is "is it smart to do this" then the answer is no, cars are not an investment and you already lose money by owning one, so why make it worse by spending more money to get nothing more? If you were going from a v6 to a v8 then I would consider it, or from a GT to a GT500.. But look at it this way: unless you buy used at the wholesale level, you are losing money from the first minute you buy a car until it is sold. If you buy brand new you lose money just driving off the lot. Right now, the NADA blue book shows me that you are losing about $2300 per year on a mustang GT. You lose about $3000 just driving it off the lot. So if you hold on to the vehicle for let's say 4 years, at the very best you are gaining about $1600 in value from a 2007 to a 2008. If the loan difference is any more than that you are losing that much money. A little body damage properly fixed is not going to affect the trade in or resale value of that car down the road.

Personally I think you are way better off spending the difference on modifications to the car. You will not recover most of that money spent but at least you are getting something for it.