Are you telling me that your signature is a wish list?

 

If you're paying 12% interest, you are taking it up the butt.

You should have either bought your USED Z
1. In cash
2. Bought a cheaper , yet still reliable car.

 

No, I have everything in my sig plus more.

 

.

 

so are you paying it off or what are you doing?

 

Instead of killing your savings consider $1,000/month payments. That will knock off some interest charges, and get you where you want to be in about 15 months.

 

Damn~ 13%.....

 

13% i though i got raped at 9%. i still got

 

my car loan was 5.25% for a used 350z.

 

Exactly right, particularly if you can't qualify for a low interest rate.

First-time buyers should buy something they can afford, not necessarily something they "want". I think you may have problems with delayed gratification, in other words waiting for the things you want.

If your credit needs to be "fixed", then you have problems that buying a more expensive car are certainly not going to help. The best way to "fix" your credit is to pay all your bills on time, and pay off your credit card. Once it is paid off, use the credit card for regular purchases but pay it off every month. Over time, your credit will improve. Getting a 12.5% interest rate is just ridiculous and "fixing your credit" is just a lame justification.

 

Im not blaming anyone - just the fact whoever got together and came up with the banking system were very smart with the concept of taking money. My main question was what was the difference between a Base and Daily intrest rate, not a analysys on whos blaming who. And your telling me you have NEVER financed anything in your live, that you pay CASH for everything, like your house ? If thats the case please give me break, not everyone has cash flowing out of there pockets to do something like that.

 

No sorry. I wasn't suggesting never carrying debt. I am suggesting that for most folks, it doesn't make sense to carry debt on depreciating/non-income producing items. Your example of a house is a good one. A house is a situation where a reasonable amount of debt is a wise thing. Another example is a college education. School loans make sense, as do certain business debts.

Interest can be confusing. The nice thing is that compounding interest can work both for you and against you. However, your point is correct that often banks compound deposits monthly, but lenders compound interest daily.

The most accurate way to compute a loan amortization schedule would be to
base the interest on the actual number of days in the payment period. If you pay monthly, this would vary from 28 to 31 days. Each day's interest would be 1/365th of the nominal interest rate. That interest is accrued and added to the principle for the next days interest calculation. If your lender will compound weekly, you will save money. If they will compound monthly, you will save even more. This is why in the US, it is required that lenders give the effective APR for loans. This allows you to compare loan products that have different terms.

BTW, the above is a reason why bi-monthly payments save you so much interest. It cuts the amount of interest you are paying the interst in half over a monthly payment system.

Hope that helps.

 

I seen people pay 19% with bad credit just to get the car

 

Sorry to be a dick - but IMO - the time to learn about credit, APR's and financing is prior to signing an agreement and making a purchase.

it's no fun thinking you've paid that much off on your car and wondering why you've hardly dented the loan.

 

I agree! I wanted the car, the monthly wasnt too high and figured I was getting a good deal for a '03 Track. I've learned, no big deal, thanks for everyones reponses.

 

most people can barely drive let alone understand finance. or a checking account.

 

Here is a great tool for showing you the effect of interest on a principal. Just plug your numbers in, and hit the "Show/Recalculate Amortization" button.

http://www.bankrate.com/brm/auto-loan-calculator.asp

 

I don't understand the idea of "pay cash or don't buy a car." I understand not signing up for 12% interest, but not financing a car just because it depreciates seems ridiculous. The thing is CASH depreciates too. To the tune of what, maybe 3% a year? Inflation is not negligible. Obviously banks are profiting, but loans under 7% or so just aren't that punishing.

I understand financing and how banks make their product perfectly adequately, the point is that just because you're paying more over the life of the loan and delivering a profit to the bank doesn't mean its a dumb thing to do.

 

you don't have to understand the mentality - there are some out there who are well off enough to just flat out pay cash for cars they want and it ultimately is more responsible.

financing is available for those of us who don't have 20k+ stashed away, or are too impatient to wait. it works out well in most cases but a lot of people take loans they shouldn't. my interest rate is 5.75% and even that will add multiple thousands of dollars onto a car loan. it's worth it to me and that's all that matters - no ones calling you stupid for financinig.

 

To be honest, I guess I have referred to financing cars as "dumb". As you point out, as long as someone understand the effect of financing a car, and can realistically deal with it, it can be fine.

My only point is that folks should realize that financing a sports car, or even buying a sports car to begin with, should be considered and extravagant expense and should be lumped in with the rest of your "entertainment" budget. Transportation can be handled better for a lot less money by buying a used econobox. Folks buy Zs for the entertainment value. When you finance one, you simply are making that entertainment that much more expensive.

I prefer to pay outright for my entertainment, whether that be a movie, a nice dinner, a vacation, or a sports car. Borrow money for the essentials; house, schooling, basic transportation if needed, and business capitalization, but pay as you go for everything else.