# My sports car dream isnt looking so good, Help!!



## londo (Aug 12, 2007)

ok heres the situation, im currently 17 ok i love the gto and have loved it every since it was introduced. I currently work everyday about 5 hrs a day at 9 bucks an hr. I have 3 cd's in the bank that i can get out in march 9, my b-day i have my own apartment 675 a month (in mothers name) it will be transfered to mine in a month and i half. Im giving my parents 4k im saving 5 in a mutual fund (i've learned thus far to always have something stashed) and that leaves me with about 6k to my self. I really want this goat and after having my mind set on it for so long nothing seems to compare. I tell myself to go by a mustang for 14k or something but i just wont be happy with it. I really dont know what to do, i have independent study only on wed and thur so then i work in the mornings. I dont want to end up, or i mean i just wont be able to pay 350+ for the car a month. But i think i could manage 300. As soon as i turn 18 im getting a credit card and getting my apartment in my name to gain credit, originally i was planning to buy the goat on march 20, or sumthing but that just seems dumb the financing with no credit will kill me. So to sum this up do you guys think i would be able to maintain this car, would i even be able to get a loan from the bank on 23,000 car and only pay 300 or so a month. Please help me b/c at this point i really dont know what to do. On one hand i dont want to end up just defaulting or sumthing crazy like that on the loan. But on the other this car was a huge thing i was looking forward to. Im going to be going into mechanics and all i really want to do after work and school is to beable to come home and work on my brazen orange goat. Please tell me what you think. And just dont give me the whole your young b/s i get understand that. Tell me if its possible

Please becareful with what you say, your dealing with a young mans dream here (corny i know) but true


----------



## macgto7004 (Jul 22, 2007)

Hey londo,
We all have had our dream cars, and I know exactly the kind of stress that chasing your dream can cause.
You must be a realist though. You seem like you have done a lot of thinking about this and you know exactly what you want.
However, if 23k is too much for you to spend, then there is no sense burying yourself in debt and risking damaging your credit and having to give up the goat.
May I make this suggestion? Why not look at an 04 instead of an 06? You should be able to get into a nice 04 for about 16k. It may not be the Brazen beauty you lust after, but it is more obtainable for you in your current financial situation. 
Just as an example, near where I live, there is an 04 Cosmo Purple w/22k miles for $17.9k. I suspect if I was in the market, I could take this car home for about 16k.
You would still be able to get into a goat, but not kill yourself in the process.

Sometimes we have to be flexible if we are to attain our dreams.

Russ


----------



## raspantienator (Nov 20, 2007)

If you are asking for a loan, at a decent rate 9+ % which I don't think would would honestly get, would put that loan over 500.00 per month. You really don't have a credit history so chances are it would be closer to 600.00 per month for 23000. There are web loan calculators so you can go and figure it out yourself. 
That is a big burden for a 9 dollar an hour job. A 6000 cd will drop your total to 17000 but at 9% you are still looking over your breakpoint. 
The GTO is a worthy goal but you may not be financially ready. There are higher milage ones out there so that would also bring the price down. Get it to a more reasonable 12000 loan if your heart is really set on the GTO to bring your payments down to 250 but thinking about your income, and future living costs, I think its still too much financially for you at this point.


----------



## NJG8GT (Nov 14, 2007)

The second time I tried to reply. Well, I would suggest you get an '04. First reason is because you may find one closer to price range your looking for. Second, when you return home from work like you've stated, you have plenty of modifications you could work on, like hood, engine, exhaust, paint, etc. Make it your dream car. Another thing I would check out, is your insurance premium on that car do to your age. I know in N.J. insurance is crazy! Best of luck! Follow your dreams before it may be too late!!! live everyday like it may be your last!(to a certain extent).


----------



## GOATTEE (Nov 30, 2006)

macgto7004 said:


> Hey londo,
> We all have had our dream cars, and I know exactly the kind of stress that chasing your dream can cause.
> You must be a realist though. You seem like you have done a lot of thinking about this and you know exactly what you want.
> However, if 23k is too much for you to spend, then there is no sense burying yourself in debt and risking damaging your credit and having to give up the goat.
> ...


:agree Well thought out answer!!


----------



## Wing_Nut (Mar 6, 2005)

Go for it! Life's too short! Your're only young once!

Don't give up on the 06. It's a way better car than the 04. Engine , brakes, and looks were all upgraded. Plus, Brazen Orange was only available in the final year of production (06).
Get your mother to co-sign the loan so that she's jointly liable for the debt. Lenders like that.
I can see that a low monthly payment is very important to you. So, ask for a minimum loan term of 72 months. Don't worry if the rate on these loans is a little higher. A percent is a really small number. But, the longer term can save you $100 or more per month so you're saving money every month even with the higher rate.
Buy from a dealer rather than a private seller. If anyone can find financing for you, it will be a dealer.
Put as little cash into the purchase of the car as possible. Borrow as much as the dealer will finance. This will do two things for you. 1.) You will build a credit history with the lender. 2.) It will preserve your cash. In case you don't have the money for the monthly payment, you can just borrow from the money you've set aside at purchase time. It's like a free loan to yourself. Many people use this technique.
Don't worry about maintenance. A Goat is really easy to maintain. You can do all that yourself and save a bundle of money.
Get the minimum insurance coverage allowed and ask for a $2,000 deductible. That will save you even more money.
Do you have a girlfriend/roomate? Get someone to split the rent and you'll definitely be able to afford a GTO.
As a last resort, you can always give up the apartment and move back to your parents house for a while. At least you'll have a GTO.
I know you can make this work. I'm sure your friends will be waaay impressed. Good luck Londo!


----------



## Tacmedic (Feb 24, 2006)

*I wouldn't buy anything...*

...until I could afford to pay cash. You are stepping into dangerous territory going into debt and making it a part of your life. 72 months and minimum insurance? WN, Are you out of your mind? If it gets totaled, he will have no car and still be in the hole to the lender... Bad idea


----------



## Wing_Nut (Mar 6, 2005)

Tacmedic said:


> ...until I could afford to pay cash. You are stepping into dangerous territory going into debt and making it a part of your life. 72 months and minimum insurance? WN, Are you out of your mind? If it gets totaled, he will have no car and still be in the hole to the lender... Bad idea


Shhhhh! The herd needs culling! The weak ones, you know...........Darwin.


----------



## fergyflyer (Apr 18, 2005)

Wing_Nut said:


> Go for it! Life's too short! Your're only young once!
> 
> Don't give up on the 06. It's a way better car than the 04. Engine , brakes, and looks were all upgraded. Plus, Brazen Orange was only available in the final year of production (06).
> Get your mother to co-sign the loan so that she's jointly liable for the debt. Lenders like that.
> ...


This is Wing_Nut's way of saying your stupid if you stretch to buy a car. Everything written by Wing is a joke and the opposite of what you should do. 

Here's what I would do Londo. Since you have a couple of CD's and that shows you are good at saving, continue doing that. Get settled into your new place and see what that is really going to cost you. 

Pretend like you bought a GTO. Make car payments into a savings account like you owned a GTO. Find out what your extra insurance cost would be and put that into there too. Put money into it like you have to maintain a GTO, expensive brakes, tires and oil changes, maybe an extra $70 per month for that. Put extra money into there for gas too. The GTO uses more and it's premium too. 

By doing that you will feel what it like to have a GTO and see if and what you have to sacrifice for a GTO. If at any point you end up cutting the GTO "payment plan" so that you can do something else, you really don't want/ can't afford a GTO. If at the end of six months you have made all your payments on time then you probably can afford a GTO and will have even more money to put down on it. 

As far as the credit card, I disagree with most fiancial advisors in that I think people should use credit cards all the time. But only if they pay them off every month and don't carry a balance. I currently have a BP Visa that gets me 5% off on gas at BP stations in the form of a rebate and 2% on hotels, rental cars and any travel expense. I also have a discover card that gets me 5% on all automotive purchases including gas up to $100 spent per month. Then I have another card that gets me 2% at grocery stores and drugstores.Make sure you charge only what you can pay off in one month and have at it. I get about $25 in rebates a month and never pay any finance charges. 

Good luck and be carefull. Always err on the side of caution.


----------



## sniper.x611 (Jan 30, 2007)

Alright boss, I was in the same boat as you. 17 no credit, worked all the time, and I wanted to move out. When I turned 18 I got a credit card and I used it to buy gas. Thats it, I bought like 100$ in gas a month and I paid it off every single month. Then I got a few more cards and I used them for miscellaneous expenses but I paid them off every month. The reason I did this was because I knew I wouldn't get a co-signer. (My parents own a business and they didn't want to be responsible for my mistakes) So after a year of working and saving I only had like 2 grand in the bank (I am also going to school). I then started shopping around and I found the GTO I wanted for about 21k. I applied for a loan, after 1 yr without a cosigner, and I got a loan with 2grand down with a 9.25 apr, and 400 dollar a month payment. and I make less than you do an hour....
Just be patient and know your limits.

Tim


----------



## Wing_Nut (Mar 6, 2005)

fergyflyer said:


> This is Wing_Nut's way of saying your stupid if you stretch to buy a car. Everything written by Wing is a joke and the opposite of what you should do.


 
Awwwww! Give natural selection a chance to work! 

Darwin never envisioned intervention by higher life forms.

I was certain that if financial suicide didn't do the trick, we'd be reading about another GTO claimed by an errant tree/bridge on a Saturday night.


----------



## londo (Aug 12, 2007)

you know what wingnut could you cut out the funny shyt. This is very serious to me and your really not helping, again i understand that you have your own unique ways of doing things but dude not now please.

Sorry i took so long i just got home from work, Yea i guess it would be smarter to look at the 04.

The only other thing i could possibly get would be the rx8 but gosh it has like no torque it would be almost the opposite pllus it drinks fuel and oil worse then the goat. But the styling is nice. Well im going to do some research on some 04's now. Thank you everyone for your thoughts. Because truthfully you guys are the only ones who can really tell me if this would be a mistake.

Again thanks to all of you!


----------



## londo (Aug 12, 2007)

sniper.x611 said:


> Alright boss, I was in the same boat as you. 17 no credit, worked all the time, and I wanted to move out. When I turned 18 I got a credit card and I used it to buy gas. Thats it, I bought like 100$ in gas a month and I paid it off every single month. Then I got a few more cards and I used them for miscellaneous expenses but I paid them off every month. The reason I did this was because I knew I wouldn't get a co-signer. (My parents own a business and they didn't want to be responsible for my mistakes) So after a year of working and saving I only had like 2 grand in the bank (I am also going to school). I then started shopping around and I found the GTO I wanted for about 21k. I applied for a loan, after 1 yr without a cosigner, and I got a loan with 2grand down with a 9.25 apr, and 400 dollar a month payment. and I make less than you do an hour....
> Just be patient and know your limits.
> 
> Tim


yea man i really want this car and at this point im willing to do watever it takes. Im just praying i dopnt loose my job or sumthing (which i doubt will ever happen) but all of these wat ifs come to mind ya know.


----------



## Tri-Power (Jan 10, 2008)

DO NOT BUY AN RX8. you will regret it until you sell it, which wont take long.


----------



## londo (Aug 12, 2007)

yea ive been checking them out jeez i just couldnt lol its not even close. Im pretty sure im going to get the 04 now unless i can save up alittle money to get the big bad 06


----------



## foxtrot7 (Mar 21, 2007)

Get a degree! It will cost much less than loan note, insurance, fuel, maintenence (oil changes are around 90$ if you have the stealership do it). You will also finish a degree faster than it takes to pay off your car...heck 6 years you could have a masters. The payoff is better...then when you have a kicking job with your Bachelors or Masters you go to a car auction and buy you a Judge :cool


----------



## londo (Aug 12, 2007)

i am planning on getting a degree in cp science, im also going to take an automotive class. I understand what your all saying tho.


----------



## macgto7004 (Jul 22, 2007)

londo said:


> yea ive been checking them out jeez i just couldnt lol its not even close. Im pretty sure im going to get the 04 now unless i can save up alittle money to get the big bad 06


You really won't be disappointed if you buy an 04 instead of an 06.
I don't know where you live, but just as an example, there is an 04 YJ M6 listed in the sale section of ls1gto.com w/25k miles, for $16k.

If you use the money you have as a down payment, you could get a car like this for under $300/mo.

Russ


----------



## noz34me (Dec 15, 2005)

londo said:


> i am planning on getting a degree in cp science, im also going to take an automotive class. I understand what your all saying tho.


sounds like a good plan; every thing that is except buying a GTO or any other high powered gas hog. 

Find yourself a good used Honda Civic or Toyota Celica. Enjoy feeding it about half the gas you would a goat, lower insurance costs, and certainly lower maintenance costs.

Get your degree, start making some real money, and buy a house. Make sure you've got your money situation under control, and THEN look for a musclecar.


----------



## Rukee (Feb 8, 2007)

noz34me said:


> sounds like a good plan; every thing that is except buying a GTO or any other high powered gas hog.
> 
> Find yourself a good used Honda Civic or Toyota Celica. Enjoy feeding it about half the gas you would a goat, lower insurance costs, and certainly lower maintenance costs.
> 
> Get your degree, start making some real money, and buy a house. Make sure you've got your money situation under control, and THEN look for a musclecar.


:agree I`d have to agree, get your education and housing paid off, the muscle car will fall into place at the right time. Insurance alone on the Civic or Celica is going to save you tons in your early years of driving.


----------



## Mike-Omologato-G. (May 13, 2006)

*.*

The serious replies are dead-on. 

I, too, had lofty dreams at a young age. The dreams waited until I was ready to take on the cost. I bought motorcycles instead (I am lucky to be alive) . I bought my '06 at 6.9% in May last year. The financed amount, after down payment) was $26K for 60 months. The car is paid off now, because although I knew the $500 a month payments were not a problem, I planned for the possibility of a problem, and kept the payment low. "Low" for me was $500.

I really paid on average $1500 a month. Sometimes it was $1000, sometimes it was $3000.
The member that said put the money aside for 6 months, as if it were a real loan, has given you priceless advice. I just thought about it for a year or 2, made mental calculations, (I liked my old car, so I was not in any hurry), and made the fatal decision to test drive an 06 M6. It was over. 

After paying about $32,000 after finance charges and taxes and warranties, and driving it every day for 29,000 miles, you would have to pry this car from my cold, dead hands.

Now, on to another issue. My car goes in for "service" this week for $3500, and nothing is wrong. Nothing at all. The car is 100% fine.

Seriously: do not get a GTO this year. Take the time to prove to yourself that you can do it. This car is expensive to own. Gas is one, tires another. I also mentioned the mod bug a few lines above, which is the worst of all.

It took me a few close calls, as I learned the car's potential. 
Not to mention that in my early driving years, there were many RWD cars. I feel that most 17 year olds today will have a poor learning curve with 400HP/TQ on a RWD car, especially if he was not very familiar with them. 

17 year olds aren't really familiar with anything, let alone a car like this. I apologize if I come off as a bit harsh here, but there isn't any time for the learning curve to have taken place yet. I mean no offense, nor any prejudism to the young folks.

Buy a lesser car first. Buy a cheaper car before you tackle big payments on a depreciating money pit. (99% of all cars are this).

*No bashing:*

*I suggest the following to be a car you own before the GTO:*

F-Body Camaro or TA
V6 mustang, or 2000-2004 GT 
Mid 90's Impala 

I hope I was of some help.


----------



## raspantienator (Nov 20, 2007)

I'm cut from the same jib. I did a lot of dreaming and admiring before climbing into new muscle. I come from a blue collar family and we did not have the income needed to support insurance costs. Life is different today as opposed to the 60's where a young man working full time without college could buy performance for 3-5 thousand dollars.

Choose a car that you like the design and can hold your interest, you know cleaning and waxing regularly. Don't buy ricer gadgets for it and keep working for your degrees and get your life in order.


----------



## rcu316 (Jan 28, 2007)

raspantienator said:


> I'm cut from the same jib. I did a lot of dreaming and admiring before climbing into new muscle. I come from a blue collar family and we did not have the income needed to support insurance costs. Life is different today as opposed to the 60's where a young man working full time without college could buy performance for 3-5 thousand dollars.
> 
> Choose a car that you like the design and can hold your interest, you know cleaning and waxing regularly. Don't buy ricer gadgets for it and keep working for your degrees and get your life in order.


I hear you. My problem with cars is I get bored with them to easily myself. I have had the GTO about a year now and am about half way ready to move on to something else myself. If your 17 years old and get owned by the car, it will turn from a dream into a nightmare. My point, don't get into deep debt and then not have any money to do anything else but pay for a car. On another note, I have your dream Brazen Orange but would hate to sell it to you and have it strap you down :cool


----------



## londo (Aug 12, 2007)

yea i hear you all but idk its like i go to cars.com one day and try to look for mustangs lol but somehow always end up on gto's. Ill just have to see hopefully the 04's will go down in price a little Then id have to grab one~! I take what everyone has said and do some hard thinking. Thanks again!


----------



## macgto7004 (Jul 22, 2007)

londo said:


> yea i hear you all but idk its like i go to cars.com one day and try to look for mustangs lol but somehow always end up on gto's. Ill just have to see hopefully the 04's will go down in price a little Then id have to grab one~! I take what everyone has said and do some hard thinking. Thanks again!


Just be patient londo. 04 prices are coming down. The 04 Cosmo I mentioned in an earlier post is still on the lot and the price is now at $16.5, and it has only 20k miles. 
They are out there, you just have to find them.

Russ


----------



## 69bossnine (Aug 9, 2007)

The fuel expense difference between the "fun-as-hell" GTO and the "somebody please shoot me and put me out of my misery" Honda or Toyota is only about $100-$125 bucks a month, give or take, if you do the math. The problem is, that it will depreciate in value at least that much per-month, so you're not realizing the savings. Buy an old but reliable car, you know, the prototypical granny-mobile that just sat in the garage but isn't worth anything on the market, and won't really depreciate.

If saving money and building up a war chest is really the priority, go old, easy to work on, and american made (cheap parts at junk yard and Autozone). It'll cost you next to nothing up-front, won't depreciate much (and if it did, there's not far to fall), and you'll put far more toward the bottom-line compared to buying a several-year-old compact off of a car lot, they always ding you for $10K-plus for those cars, because everybody is so obsessed with saving at the pump, and ignore all of the other money-factors...


----------



## SnKGoat (Nov 21, 2006)

Londo,

Little background here, when I was a kid, my dad had a 383 Super Bee, and my mom had a Firebird Formula. I have always loved sports cars. ALWAYS. When I was your age, my room was decorated with equal parts of scantily clad girls and of sexy cars....sometimes BOTH! Fast forward some years and looking back, I could not have afforded any of the cars I thought about. TA's Z28's Stangs etc. I am not tryin to burst your bubble, but right now, there are so many more things in your life that are more important then a car. Trust me! Take the next few years and get everything settled. That way, when its time, and you will know when it is, it will be simple like it was for me. Saw a 04 M6 Torrid Red with 12k miles on it. "Honey?" "Yes, you deserve it." And that was the "I want to buy the hot rod I have always wanted" discussion. If I burst your bubble I am sorry, but I think if you let it go for now, you will look back and see it was for the better good. Besides, in say 5 years they may have a Judge out with 550 base hp. =D


----------



## cwbimp (Nov 8, 2006)

let me point out another thing i am 23 bought mine brand 06 m6 off the show room floor i had it for a daily driver for a year now i own a 98 s-10 dd and the gto the insurance sucks bad 320 a month just lieabilty on the s 10 no accidents or tickets on my record it will be very expensive for insurance on a 18 yr old get a camaro with t tops ss i am sure it will turn more heads


----------



## fergyflyer (Apr 18, 2005)

londo said:


> yea i hear you all but idk its like i go to cars.com one day and try to look for mustangs lol but somehow always end up on gto's. Ill just have to see hopefully the 04's will go down in price a little Then id have to grab one~! I take what everyone has said and do some hard thinking. Thanks again!


I'm going to re post what I said earlier. If you really want a GTO, pretend like you have one. Put money into a bank account for 6 months like you had one. Money for the insurance, the extra cost of maintenance, the extra cost of fuel plus don't forget the premium versus regular, and the extra car payment. Try that for 6 months. If in 6 months you haven't missed a car payment or any of the other payments, or been late on them, then you really can afford a GTO. Not much will have changed in 6 months, there will stil be plenty of GTO's around. 

You should realize what you will be giving up before you get yourself into the mess of a financed car. There will be dates that you can't go on because you need gas for the car. There will be vacations that you skimp on or miss because your driving a GTO. There will be things that friends do that you can't because you have a GTO. If you can make it 6 months acting like you have the car and you still really want one. You will be in a much better place than you are now. You will know for certain that you can afford it and you will have a down payment for the car that will help you get a better finance rate and a lower payment. 

Also get that charge card and build up 6 months of buying things on it and paying it off every month. That will help your credit and and get you a better intrest rate on your car. The better intrest rate will mean the difference between paying 23,000 for a 16,000 car and paying 18,500 for a 16,000 car. That's figuring a 15% rate for a first time buyer for 6 years and an 8% rate for someone with a bit of credit, a decent down payment and 5 years.


----------



## Wing_Nut (Mar 6, 2005)




----------



## foxtrot7 (Mar 21, 2007)

Wing_Nut said:


>


That is so wrong on so many levels! :lol:


----------



## Aramz06 (Mar 2, 2008)

Well, im 18 and I just got my 06 GTO a week ago from a carmax dealer, it had 14k miles on it and it was 22.9k. With my dads good credit, we got it for 6 year buy, 2k down, at 430 a month, Althought I still live with my parents, I still have a fairly hard time paying it off, Mostly the gas money. Honostly i'd say your best off with an 04, they are ridiculously cheap. Goodluck with your choice, and show us the one you get


----------



## Tacmedic (Feb 24, 2006)

Aramz06 said:


> Well, im 18 and I just got my 06 GTO a week ago from a carmax dealer, it had 14k miles on it and it was 22.9k. With my dads good credit, we got it for 6 year buy, 2k down, at 430 a month, Althought I still live with my parents, I still have a fairly hard time paying it off, Mostly the gas money. Honostly i'd say your best off with an 04, they are ridiculously cheap. Goodluck with your choice, and show us the one you get



You signed a six year note at $430.00 a month while still living with your parents? I hope you are kidding. If you keep doing things that way, you will be broke for the rest of your life. I just hope you are kidding.


----------



## Wing_Nut (Mar 6, 2005)

Aramz06 said:


> Well, im 18 and I just got my 06 GTO a week ago from a carmax dealer, it had 14k miles on it and it was 22.9k. With my dads good credit, we got it for 6 year buy, 2k down, at 430 a month, Althought I still live with my parents, I still have a fairly hard time paying it off, Mostly the gas money. Honostly i'd say your best off with an 04, they are ridiculously cheap. Goodluck with your choice, and show us the one you get


All right Tacmedic, calm down and assuming this guy is for real, let's measure just how uh, intelligent he is.

Let's see, we can only work with the facts given.

The price was $22,900. You invested $2,000.

That would indicate you borrowed $20,900 assuming that you didn't either finance taxes and title fees, etc. or they were buried in the quoted price.

We know that your monthly payment is $430 and you'll be feeling that pain for the next 72 months.

Solving for the missing variable (interest) we find that principal of $20,900 on a 72 month note would require an annual interest rate of 14% to generate a payment of $430.66, close enough. That's equivalent to a credit card for someone with really bad credit. If this was the result of your father's "good credit", what the hell do you consider bad credit?

You'll be coughing up about $31,000 on the loan. That's $20,900 of principal and $10,108 in interest. Sweet!

Now we can add in the $2,000 of capital you contributed up front for a grand total of approx $33,000.

Congratulations, you've cut a deal to pay almost list price for a 2 1/2 year old car with 14,000 miles on it. And your father was dumb enough to put this deal in his name.

And you claim you can barely put gas in it even though you live at home with your parents.

You are dumb!
Your parents are dumb!
The Carmax guys peed they pants!


Awwww.......screw it.....party on dude arty:


----------



## Red Bearded Goat (Mar 19, 2007)

Wing_Nut said:


> The Carmax guys peed they pants!


All the way to the bank laughing his azz off....


----------



## Wing_Nut (Mar 6, 2005)

Red Bearded Goat said:


> All the way to the bank laughing his azz off....


I guess because I'm a finance guy I lose sight of the fact that an incredible number of people don't have a clue about even the most basic financial concepts.

People will negotiate like hell on a hard asset like a house or car to get the "right" price. But, when it comes to an intangible like the price of money, they just roll over and give away their hard earned wealth without a whimper. Hell, some are actually happy about the screwing they just got.

No wonder the mortgage brokers and banks were able to engineer the sub-prime fiasco. While it lasted, it was like taking money from retards. 

No.....it was taking money from retards.


----------



## raspantienator (Nov 20, 2007)

A lesson learned hopefully but the father did it for his son who wanted the GTO. Car dealers and banks have us all by the short hairs and that's why they are in business and the rest of us move the economy.
I say enjoy the car and move ahead to make your father proud by completing college.


----------



## fergyflyer (Apr 18, 2005)

raspantienator said:


> A lesson learned hopefully but the father did it for his son who wanted the GTO. Car dealers and banks have us all by the short hairs and that's why they are in business and the rest of us move the economy.
> I say enjoy the car and move ahead to make your father proud by completing college.


I'd disagree with that statement that car dealers and banks have us by the balls. I'm now at the point where I don't finance cars, but when I did, I negotiated the interest rate on all my purchases. The last one I financed was the C6 and the interest rate was at 4.9 and I felt like I was getting abused. 

Know your credit score and what drives it. After that banks look at your credit history, do you pay on time, early or late. They also look at your debt to income ratio. If your debt payments are more than 50% of your gross pay, your in trouble. Ideal is no more than 33% of your income gross going to credit cards, mortgage and car payment. I'm at 15% of my income going to debt payments. 

So if you go to a bank and you don't really need their money, they really want to give it to you and will cut the interest rate accordingly. I'm going to refi the house at 3.25% in the middle of next week. I have, even with depressed property values, a home worth 170,000 that I owe 110,000 on and that helps a weak mortgage portfolio at a bank. Add in my great debt to income ratio and they dropped their pants to get money in my hands.


----------



## Wing_Nut (Mar 6, 2005)

fergyflyer said:


> I'd disagree with that statement that car dealers and banks have us by the balls. I'm now at the point where I don't finance cars, but when I did, I negotiated the interest rate on all my purchases. The last one I financed was the C6 and the interest rate was at 4.9 and I felt like I was getting abused.
> 
> Know your credit score and what drives it. After that banks look at your credit history, do you pay on time, early or late. They also look at your debt to income ratio. If your debt payments are more than 50% of your gross pay, your in trouble. Ideal is no more than 33% of your income gross going to credit cards, mortgage and car payment. I'm at 15% of my income going to debt payments.
> 
> So if you go to a bank and you don't really need their money, they really want to give it to you and will cut the interest rate accordingly. I'm going to refi the house at 3.25% in the middle of next week. I have, even with depressed property values, a home worth 170,000 that I owe 110,000 on and that helps a weak mortgage portfolio at a bank. Add in my great debt to income ratio and they dropped their pants to get money in my hands.


For a lender, it's all about risk. Higher risk investments (loans) demand a higher return. Lower risk investments are acceptable at a lower rate of return. I know that some would think of that as mercenary or illogical. Lenders are willing to loan money to those who don't need it but not to those who really have the "need". Well, yeah! Banks are not social institutions. They are businesses who's purpose is to make a profit for investors. They don't care that you "need" a GTO or a house. They do care very much if you are unlikely to pay back the money they lent you with the agreed upon interest (revenue for them not profit).

Knowing your creditworthiness and maintaining it is something that can pay off with credit cards, mortgages, car loans, equity lines, etc.

One the most obvious but frequently ignored answers for a lot of people caught in a credit crunch is self discipline. Unfortunately, that is a foreign concept in this society. I offer as evidence, the poor dumb bastard above that we are all harpooning in this thread.


----------



## JohnC (Jul 12, 2007)

Genarally, a good loan rate is any rate less than what you can do with the money you retain by fanancing and invest elsewhere.

4.9% for a C6 as abuse? That's a great rate. Anyone with any savvy can take the money retained for financing and get 7% investing elsewhere conservatively and probably a good deal more invested agressively.

JohnC


----------



## raspantienator (Nov 20, 2007)

I made a few good deals and thought I was saavy as well. Did a poor job at selling stocks and bonds for a few years because I just could'nt close deals on people that couldn't afford them to begin with. 
I have an excellent credit rating- paid for my GTO in full. I still do not pretend to think I outsmarted any broker whether its cars or banks because they are there to make money. I've never seen a bank cut the rate because you want their money. Lenders go by your score and drop the rate accordingly to the prime and if you have it automatically withdrawn from your paycheck, drop it another .5 percent. I think you are fooling yourselves to beleiving you are even in the game as if you you hit a grand slam bottom of the 9th to win 4 to 3.

I'm glad the kid got the GTO and has a father that probrably loved helping his son.


----------



## JohnC (Jul 12, 2007)

Well, I own a couple modest rental properties that have each appreciated 75% in value over the last 4 years and that's with the supposed "housing crisis". Had I paid cash for my vehicles I probably wouldn't have had the funds to begin these ventures. Of course paper money is paper money but I've broken even on cash flow so I consider myself ahead. Pay day will be when I sell the homes; the homes I would not have to sell had I bought my and my wifes last vehicles with cash instead of financing.

I don't know, to me it's simple mathematics. A loan at 4.9% isn't so bad when you can do better with the money you keep. Perhaps I'm not savvy, maybe just lucky.

JohnC


----------



## JohnC (Jul 12, 2007)

Well hell! I think I need to correct myself. After checking my loans for my 2004 GTO and wifes 2004 RAM Hemi 1500 I see I got 3.75% on both. And these are much less expensive than a C6. Maybe the 4.9% offer was abuse!

JohnC


----------



## Wing_Nut (Mar 6, 2005)

JohnC said:


> Well hell! I think I need to correct myself. After checking my loans for my 2004 GTO and wifes 2004 RAM Hemi 1500 I see I got 3.75% on both. And these are much less expensive than a C6. Maybe the 4.9% offer was abuse!
> 
> JohnC


Rates like that were no doubt the result of manufacturer subsidies. I doubt that you walked into a bank or credit union and obtained a rate like that. You can't compare an artificially subsidized rate like that to what this kid would be offered. He likely has no credit history. It sounds like his parents are likely not sporting a stellar credit rating. 

In a case like that, the subsidized rates wouldn't be offered by the in-house financing arms of the manufacturer (i.e. GMAC, Ford Motor Credit, etc). If you read the fine print on every one of those offers you'll see the disclaimer "for qualified buyers". I doubt this kid or his parents fall into the "qualified" bucket. And even if they did, this was a used car, not new. That's a different category for lenders.

In that case they'd be looking at market rates for a buyer with their qualifications. These days, those rates are a lot higher than they were a year ago, before the subprime debacle. Now, banks are extremely wary of high risk borrowers. That's true whether you are seeking a car loan, a mortgage, or a credit card. BOD's and CEO's are worried not only about losing their jobs, they're worried about litigation for negligence and increased government oversight a la Sarbanes Oxley type laws. And they're right to be worried. Their ass may land in jail and they may be stripped of most of their wealth.

So, this kid would have been shopping the market as a high risk borrower in today's environment looking to buy a used car, not new. I think he could have done better than 14% but nowhere near a 3.75% subsidized rates that you were offered on a new car. A good deal for him may have fallen in the 8-10% range.

An even better deal would be to look for a used car at less than half the cost of the GTO. His $2,000 equity would be 20% rather than 10%. That, and the reduced principal amount might make it easier to qualify for a lower rate (lower risk) loan. He could demonstrate his creditworthiness by paying off a loan he can actually afford. And, five years down the road, when he was earning a little more money, he may just qualify for subsidized rates on a modestly priced new car.

Instead, he's set himself up to fail and mortgaged his future. For a stupid car of all things!

Oh well, I'm certainly thankful there are so many stooopid people. Less competition.


----------



## 05BAADGOAT (Jan 10, 2008)

just think 9 bucks an hour 40 hours a week, 4 weeks with no over time is close to 1500 a month, you said 675 for rent leave you 825, we say that with utilitties, you got a cell phone that say 50 bucks, thats 775, now food you go cheap go mom house or eat ramon noddles case is like 10 bucks so 4 weeks of that and drinks say 60 bucks, 705 now, god knows what else you have, but say you get your goat you ask for 300 but got it for 331 cuz gap ins with the car, you have 374 now gas 100 a month if you live close to work and don't hot rod, 274, now you have to have full coverage now, i can tell you i don't think you can get under 300 unless you talk to your mom to help you out with ins(put her name as main driver and you as a extra driver) might be cheap, you got to think of everything else you may want computer games movies girl need something, getting sick missing work, you can do it look for a 04 or 05 06 with high mileage, and don't say you have a room mate to help with apartment, you be f when they move out with no warning


----------

