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With the way our economy has been going in past weeks and the late delivery
of our Solstices, it is going to be very interesting what the possible interest rate is going to be on financing the new Sol? Anybody have issues with this?
The Fed.(Greenspan) is going to raise interest rates again. :cuss:
 

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buckeyewilky said:
With the way our economy has been going in past weeks and the late delivery
of our Solstices, it is going to be very interesting what the possible interest rate is going to be on financing the new Sol? Anybody have issues with this?
The Fed.(Greenspan) is going to raise interest rates again. :cuss:
A quick visit to a loan payment calculator told me this...

$25,000 car with 0 down over 60 months @ 5.00% = $471.78/month
$25,000 car with 0 down over 60 months @ 6.00% = $483.32/month

I don't think rates will go up a whole percent by then, but even if they do, it added up to only $12/month difference. Shouldn't be a deal breaker.
 

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Wow... I know when I bought my last two cars (since 2001) the dealers both times wanted me to finance out to 60 months. In fact it appears to be the norm to go 60 months, and even 72 months without batting an eye.

I guess I'm a dying breed when I won't go above 48 months, and prefer to do 36 months. Besides, if you take the extra time (due to the delay, or potential delay of delivery) and have been planning on this car, you should be able to put away another $1,200 - $1,600 for a down payment (3-4 months of a $400 payment). I guess I'm in the minority in that I've actually been saving for this car since I knew I wanted it. In fact, I've added options that I wasn't originally going to get because I'm now able to save for a few more months and have the extra options paid for in my down payment.

I figure by the time the car is sitting at my local dealer that I'll have around 40-50% as a deposit and the interest rate won't make a bit of difference to me because at 36 months it's going to be as low as I can find.
 

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:agree:
I just used 60 since the longer you finance, the more impact the rate has on the total interest paid over the life of the loan.
 

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Just 2 weeks ago I was able to get approved for a 3.9% 20,000 loan, now it's up to 4.65% from my bank.
 

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Don't forget about leasing. Payments are lower and you have option of turning car in after say 3 yrs. to buy the higher hp Solstice in '08. Or you can buy it for a negotiated price at end of lease.
 

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rlhammon said:
Wow... I know when I bought my last two cars (since 2001) the dealers both times wanted me to finance out to 60 months. In fact it appears to be the norm to go 60 months, and even 72 months without batting an eye.

I guess I'm a dying breed when I won't go above 48 months, and prefer to do 36 months. Besides, if you take the extra time (due to the delay, or potential delay of delivery) and have been planning on this car, you should be able to put away another $1,200 - $1,600 for a down payment (3-4 months of a $400 payment). I guess I'm in the minority in that I've actually been saving for this car since I knew I wanted it. In fact, I've added options that I wasn't originally going to get because I'm now able to save for a few more months and have the extra options paid for in my down payment.

I figure by the time the car is sitting at my local dealer that I'll have around 40-50% as a deposit and the interest rate won't make a bit of difference to me because at 36 months it's going to be as low as I can find.
:agree: My wife and I figure to put away an additional $2,000 by the time we get to actually buy the car. Add that to the money I have been putting away for a motorcycle (that plan was changed the evening my wife saw the Solstice on "The Apprentice" :) ) and we should have a very hefty down payment. We're going to try and do a 24 month loan. I'd sacrifice the extra two grand to get the car in July rather than November.

Even with the bump in interest rates, they are still not that bad. I was talking to my dad last night, and he reminded me that the interest rate on the mortgage on the house he bought in 1980 was 12.5%!
 

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Zolsol said:
Don't forget about leasing. Payments are lower and you have option of turning car in after say 3 yrs. to buy the higher hp Solstice in '08. Or you can buy it for a negotiated price at end of lease.
But then you can't mod your car :(
 

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rlhammon said:
Wow... I know when I bought my last two cars (since 2001) the dealers both times wanted me to finance out to 60 months. In fact it appears to be the norm to go 60 months, and even 72 months without batting an eye.

I guess I'm a dying breed when I won't go above 48 months, and prefer to do 36 months. Besides, if you take the extra time (due to the delay, or potential delay of delivery) and have been planning on this car, you should be able to put away another $1,200 - $1,600 for a down payment (3-4 months of a $400 payment). I guess I'm in the minority in that I've actually been saving for this car since I knew I wanted it. In fact, I've added options that I wasn't originally going to get because I'm now able to save for a few more months and have the extra options paid for in my down payment.

I figure by the time the car is sitting at my local dealer that I'll have around 40-50% as a deposit and the interest rate won't make a bit of difference to me because at 36 months it's going to be as low as I can find.
I am with you! I HATE long loans. People get them to buy a more expensive car than they should, and then 2 years later they trade it on on another one when they are upside down on the loan. Then they have to get a cheap car, and are paying a fortune on it. I had a friend who did this with a Chevy pickup. He replaced it two years later, and had a $20,000 loan on a $12,000 Escort! :eek: The dealer must have done some creative paperwork to slip that one by the loan officer!

I prefer a 36, but would do a 48 month. However, for the Sol, I may buy it outright from the start. I hate the idea of paying monthly on a car that will sit for 4 months a year in the garage!
 

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Long term loans aren't as bad as described as long as you put a good down payment and sell the car early or stay with the car for ever (don't nock it till you try it). First off your payments go way down on an expensive car, and if you ask me there's nothing wrong with that--I like driving around in expensive cars that are not affordable to everyone else, sorry if some people find that silly. As a matter of fact the main reason people lease is to get an expensive car at a reasonable monthly payment, never owning it or not being able to get rid of it early on is the down side--I don't lease...yet. As for me and my sol I might just buy it out right, I'd rather not have a monthly payment at all.
 

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JonzeOnSolstice said:
Long term loans aren't as bad as described as long as you put a good down payment and sell the car early or stay with the car for ever (don't nock it till you try it). First off your payments go way down on an expensive car, and if you ask me there's nothing wrong with that--I like driving around in expensive cars that are not affordable to everyone else, sorry if some people find that silly. As a matter of fact the main reason people lease is to get an expensive car at a reasonable monthly payment, never owning it or not being able to get rid of it early on is the down side--I don't lease...yet. As for me and my sol I might just buy it out right, I'd rather not have a monthly payment at all.
I'll agree that long term loans can be ok, but putting down lots of money generally is not what happens, and most people do not buy new, and hold onto a car for 10 plus years. If that is really what happens, yes they can be ok. However, for people who trade a couple years into the loan, they lose a lot of money, both through depreciation, and higher amount of interest paid early in a loan (vs paying on principal). They make a car more affordable on a monthly basis, but you pay more in the long run.

There are more and more people ending upside down on loans these days. So it is certainly worth mentioning the negatives involved in those types of loans as well as the positives.
 

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Take the Longest Loan Possible

A good rule of thumb is take the longest loan possible, providing the interest rates are within 2 points from the lowest one you can really afford. Take out a 72 month loan and make payments to both the principal and finance charges seperately!

Example:
$25K loan at 72 months at 7% is $426.23 a month
$25K loan at 48 months at 5% is $575.73 a month

This would require $150 (rounded) more a month to reduce 2 years from the loan. Or $1800 more a year for 4 years to pay in full. You could take the 72 month loan and pay an extra $100 a month towards the principal each month and the loan is paid in full in 4.6 years instead of the 72 months.

The point is you can get a lower monthly scheduled payment so if you run short at times you would not be making a larger car payment then. We things improve you can even increase your extra monthly payment to get the loan under 4 years to being paid in full.

Source: http://www.carfaire.com/loanCalc/
 

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I usually do what Delnari described. I always go for the longer loan for the lower payments, but then overpay to decrease the interest and time. This way incase I come into hard times, loose my job, my wife looses hers I can always fall back to the lower monthly payment untill I can pay higher again.

Also the difference in interest between a 36 month $25k 6% loan at $27,379 compared to a 72 month $25k 6% loan at $29,831. That's $2500. However that's with no down payment, and no trade in. However if you put $5k down with a $5k trade in you're talking 36m = $26,427 and 72m = $27,898. Which is now only $1400. If you make the down payment and extra monthly payments you can come out on top.

The problem as stated though is most people get a 72 month loan because they can't afford anyhitng else.
 

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I've been debating whether to finance mine or pay cash for it (I hate making payments!). We paid cash for the last two new cars we bought (Camaro Z28 & Dodge Caravan). I just bought my wife a Chevy Equinox, put down $9K and finance $16K of it for 60 months through GMAC at 3.9%. I was considering a similar plan for the Solstice if GMAC (or anyone else) still has acceptable rates by delivery time. :)
 

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Start making payments NOW

Delnari said:
A good rule of thumb is take the longest loan possible, providing the interest rates are within 2 points from the lowest one you can really afford. Take out a 72 month loan and make payments to both the principal and finance charges seperately!

Example:
$25K loan at 72 months at 7% is $426.23 a month
$25K loan at 48 months at 5% is $575.73 a month

This would require $150 (rounded) more a month to reduce 2 years from the loan. Or $1800 more a year for 4 years to pay in full. You could take the 72 month loan and pay an extra $100 a month towards the principal each month and the loan is paid in full in 4.6 years instead of the 72 months.

The point is you can get a lower monthly scheduled payment so if you run short at times you would not be making a larger car payment then. We things improve you can even increase your extra monthly payment to get the loan under 4 years to being paid in full.

Source: http://www.carfaire.com/loanCalc/
:agree:
If you can stand the discipline, start making a theoretical car payment now into a low risk, interest bearing account.
Then when the Sol really arrives you will have earned interest, rather than paid interest making the loan payments lower & a continuation of your plan.
 

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Well, I suspect many won't like this response.

I firmly believe in paying cash for a car and if you have to finance to pay it, you can't afford it. And no, I'm not a 65 year old crumudgeon, I'm 31.

Now, let me say that we bought 3 cars last year and I financed two of them. BUT, and here's the big BUT, I had the cash to pay for all of them in full, comfortably.

I paid the Sentra in full. The Altima and the MSMiata I paid 50% down and financed the rest, each at less than 4% interest.

Why did I finance then? Because the rate I was getting in the market had been better than 4%. So the money that I would have used to pay the cars was going to my mutual funds. The market return has changed over the last few months. If this trend continues, I'll direct the money that would go the market to the car payments instead.

The key is that I had the cash to pay all of them. If you can't pay cash, you shouldn't be buying.
 

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Matt123 said:
Well, I suspect many won't like this response.

I firmly believe in paying cash for a car and if you have to finance to pay it, you can't afford it. And no, I'm not a 65 year old crumudgeon, I'm 31.

Now, let me say that we bought 3 cars last year and I financed two of them. BUT, and here's the big BUT, I had the cash to pay for all of them in full, comfortably.

I paid the Sentra in full. The Altima and the MSMiata I paid 50% down and financed the rest, each at less than 4% interest.

Why did I finance then? Because the rate I was getting in the market had been better than 4%. So the money that I would have used to pay the cars was going to my mutual funds. The market return has changed over the last few months. If this trend continues, I'll direct the money that would go the market to the car payments instead.

The key is that I had the cash to pay all of them. If you can't pay cash, you shouldn't be buying.
I like your response. Not sure if I totally agree with the "you cannot afford it" part of it, but its not worth splitting hairs on that.

I financed my Jeep when I bought it (in 2002) for the same reasons as you did. Jeep gave me a 1.9% rate on it. So I kept my cash and let it earn interest too. However, only the incredibly low interest rates the last few years have made this a viable option. Still it was nice to take advantage of it! :)
 
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