Despite good economy, many still in trouble with car loans.
02-14-19, 11:37 AM
#77
Super Moderator
Pennsylvania is the biggest mess in the country from a tax perspective, with over 1,000 separate taxing authorities. Ohio is a close second. I'm not surprised you and Johnhav430 have completely different taxation schemes.
02-14-19, 11:45 AM
#78
Lexus Fanatic
Also, that Phila. is a hassle for all payroll depts. for any co. My wife worked for Wells Fargo, whose HR is in Minneapolis. She had to fill out a form, that showed a) what school district do you work in b) what school district do you live in Because the City of Phila. charges a different wage tax to people working there depending on if they also live in the county or not.
p.s. weren't you the person who caught me sneaking into Lower Merion, because I posted a pic of my LS430 with the snow tire rims, and you recognized the playground lol
02-14-19, 01:23 PM
#79
Lexus Fanatic
I didn't go through and read this entire thread because, well, who has time for that? 
However, I can say a few things with absolute certainty:
1. If you are buying a car based off how much payment you can afford, you're doing it wrong.
2. If you need a loan term longer than 3 years to afford the car, you can't afford the car. I was driving past a Kia dealer the other day and they were advertising 96 month loans on the new stinger. That is a recipe for financial disaster.
3. If you can't afford to put any money down, you can't afford the car (there is a difference between not being able to afford to, and just not wanting to).
4. If your credit score is below 600, you can't afford a new-to-you used car, with a loan.
5. If your credit score is below 700, you can't afford a brand-new car, with a loan.
6. If you have to roll over negative equity AT ALL, you can't afford the car.
Now those are solely based on my opinion, take it for what its worth. There are exceptions to these but for the most part I find them to be true. If your credit is below 600, your credit sucks. That is a fact. You are going to pay far more in interest for a depreciating asset than you would just saving and buying outright. That doesn't fix your credit, but there are other ways to do that that are MUCH less expensive and risky. Chances are, with a score that low, you haven't been meeting your other financial responsibilities and so...here you are. Exception: Medical debt. It can hit your credit hard and can be exorbitantly costly.
There should be ZERO reason to ever take a car loan longer than 75 months, on the most expensive cars. On your average Honda, Kia, Toyota, Ford, etc, nobody should be taking loans longer than 36 months, or 48 if 0% interest.
There should be ZERO reason to roll over negative equity. If you are in that kind of hole, keep driving what you got until its paid down or paid off. Odds are the car will still be worth SOMETHING at the end of the loan, and you can then sell it and use the money to put down on your new ride, which will likely be a better one than you could get today.
Buy your cars off the final price, NOT THE PAYMENT. Also, be sure to incorporate total cost of ownership (insurance, maintenance, things like this). My Ram costs much more to ensure and maintain than my 2002 Lexus that I paid >5k for.
However, I can say a few things with absolute certainty:
1. If you are buying a car based off how much payment you can afford, you're doing it wrong.
2. If you need a loan term longer than 3 years to afford the car, you can't afford the car. I was driving past a Kia dealer the other day and they were advertising 96 month loans on the new stinger. That is a recipe for financial disaster.
3. If you can't afford to put any money down, you can't afford the car (there is a difference between not being able to afford to, and just not wanting to).
4. If your credit score is below 600, you can't afford a new-to-you used car, with a loan.
5. If your credit score is below 700, you can't afford a brand-new car, with a loan.
6. If you have to roll over negative equity AT ALL, you can't afford the car.
Now those are solely based on my opinion, take it for what its worth. There are exceptions to these but for the most part I find them to be true. If your credit is below 600, your credit sucks. That is a fact. You are going to pay far more in interest for a depreciating asset than you would just saving and buying outright. That doesn't fix your credit, but there are other ways to do that that are MUCH less expensive and risky. Chances are, with a score that low, you haven't been meeting your other financial responsibilities and so...here you are. Exception: Medical debt. It can hit your credit hard and can be exorbitantly costly.
There should be ZERO reason to ever take a car loan longer than 75 months, on the most expensive cars. On your average Honda, Kia, Toyota, Ford, etc, nobody should be taking loans longer than 36 months, or 48 if 0% interest.
There should be ZERO reason to roll over negative equity. If you are in that kind of hole, keep driving what you got until its paid down or paid off. Odds are the car will still be worth SOMETHING at the end of the loan, and you can then sell it and use the money to put down on your new ride, which will likely be a better one than you could get today.
Buy your cars off the final price, NOT THE PAYMENT. Also, be sure to incorporate total cost of ownership (insurance, maintenance, things like this). My Ram costs much more to ensure and maintain than my 2002 Lexus that I paid >5k for.
02-14-19, 01:48 PM
#80
Lexus Champion
And, I'm not sure I'd really call Penna "blue". Philly and Pittsburgh are true blue; Allentown, Scranton and State College lean blue; Harrisburg is a toss up; and the rest of the Commonwealth--the most land area but not population--is basically red. James Carville calls it "Philly and Pittsburgh, with Alabama in between." Sorry Alabamians--his words, not mine.
Last edited by tex2670; 02-14-19 at 02:03 PM.
02-14-19, 06:34 PM
#82
Lexus Fanatic
Thread Starter
Yes, there's PA state income tax (and some municipalities also have wage taxes). They don't send annual tax bills for income, though; it's based on the amount of your income, and you have to file a tax return by 4/15. We are talking about real estate tax bills.
And, I'm not sure I'd really call Penna "blue". Philly and Pittsburgh are true blue; Allentown, Scranton and State College lean blue; Harrisburg is a toss up; and the rest of the Commonwealth--the most land area but not population--is basically red. James Carville calls it "Philly and Pittsburgh, with Alabama in between." Sorry Alabamians--his words, not mine.
And, I'm not sure I'd really call Penna "blue". Philly and Pittsburgh are true blue; Allentown, Scranton and State College lean blue; Harrisburg is a toss up; and the rest of the Commonwealth--the most land area but not population--is basically red. James Carville calls it "Philly and Pittsburgh, with Alabama in between." Sorry Alabamians--his words, not mine.
) the art of mountain driving and downshifting/engine-braking/speed control on long downgrades.
Yes, there's PA state income tax (and some municipalities also have wage taxes)
Last edited by mmarshall; 02-14-19 at 06:38 PM.
02-14-19, 06:38 PM
#83
Lexus Champion
Agreed that some parts of rural PA can be quite red-neck, but most of the population is in the cities. I always liked Uniontown, in the SW, in Fayette County...on U.S. 40, on the way west to Wheeling and Ohio. Beautiful view of the small city from the top of Summit Mountain (Chestnut Ridge)...and the 3.5-mile descent, at an average 10% grade, is where I learned (very carefully ) the art of mountain driving and downshifting/engine-braking/speed control on long downgrades.
Not sure I understand that one...wages are income. Or is it an income tax just disguised by another name?
) the art of mountain driving and downshifting/engine-braking/speed control on long downgrades.Not sure I understand that one...wages are income. Or is it an income tax just disguised by another name?
02-14-19, 06:43 PM
#84
Lexus Fanatic
Thread Starter
Yeah, that's what it sounds like. Here in Virginia, county income taxes are banned by the state constitution, so the real estate and car taxes pretty much make up for the ban. Incorporated towns and cities, however (which, by law, in VA, are politically independent from counties...the only state in the country like that) can tax your income if you live within their borders.
02-14-19, 07:48 PM
#85
Lexus Champion
Yeah, that's what it sounds like. Here in Virginia, county income taxes are banned by the state constitution, so the real estate and car taxes pretty much make up for the ban. Incorporated towns and cities, however (which, by law, in VA, are politically independent from counties...the only state in the country like that) can tax your income if you live within their borders.
02-15-19, 08:25 AM
#86
Dysfunctional Veteran
From a financial standpoint it all makes sense.
For a majority of people, it's easier said than done. A new mainstream Civic can be $600/mo if you only go 36/mo. An economy car! The average car is now about $37K.
Sure, it would then be recommended to go used. But that also means more repairs, less safety, less piece of mind, etc. I think a 60 mo term is OK with low interest and decent money down. Especially if you are going to own the car beyond that and not start another loan after the 5 years.
For a majority of people, it's easier said than done. A new mainstream Civic can be $600/mo if you only go 36/mo. An economy car! The average car is now about $37K.
Sure, it would then be recommended to go used. But that also means more repairs, less safety, less piece of mind, etc. I think a 60 mo term is OK with low interest and decent money down. Especially if you are going to own the car beyond that and not start another loan after the 5 years.
The bottom line here is, if you can't afford it, don't buy it. Why is that so hard for most people? I just can't wrap my head around it. Yes, it's easy to get in over your head, but it's also not that difficult to get out. The problem is that people's financial situation changes and they don't WANT to downgrade. If they can no longer afford the car, sell it and buy something you can afford. I wouldn't own my truck if I couldn't afford it. If I needed too, I would sell it tomorrow, and buy a much cheaper car. Life changes, and we gotta roll with the punches.
Holy crap, we agree on something?!
02-15-19, 08:32 AM
#87
That's just it though, it shouldn't be. To give an example, my wife drives a 2014 Civic EX-L. Its pretty loaded as far as civics go in that year range. It was 23k and some change. She had a 2008 EX, which she sold for $6000. She then took $4,000 out of her savings, put 10k down on the new one and financed for 3 years at 0%. She paid it off 9 months later, making payments of $1500 until it was gone because she had the extra cash and hates car payments.
The bottom line here is, if you can't afford it, don't buy it. Why is that so hard for most people? I just can't wrap my head around it. Yes, it's easy to get in over your head, but it's also not that difficult to get out. The problem is that people's financial situation changes and they don't WANT to downgrade. If they can no longer afford the car, sell it and buy something you can afford. I wouldn't own my truck if I couldn't afford it. If I needed too, I would sell it tomorrow, and buy a much cheaper car. Life changes, and we gotta roll with the punches.
Holy crap, we agree on something?!
The bottom line here is, if you can't afford it, don't buy it. Why is that so hard for most people? I just can't wrap my head around it. Yes, it's easy to get in over your head, but it's also not that difficult to get out. The problem is that people's financial situation changes and they don't WANT to downgrade. If they can no longer afford the car, sell it and buy something you can afford. I wouldn't own my truck if I couldn't afford it. If I needed too, I would sell it tomorrow, and buy a much cheaper car. Life changes, and we gotta roll with the punches.
Holy crap, we agree on something?!
02-15-19, 08:39 AM
#88
Lexus Fanatic
That's just it though, it shouldn't be. To give an example, my wife drives a 2014 Civic EX-L. Its pretty loaded as far as civics go in that year range. It was 23k and some change. She had a 2008 EX, which she sold for $6000. She then took $4,000 out of her savings, put 10k down on the new one and financed for 3 years at 0%. She paid it off 9 months later, making payments of $1500 until it was gone because she had the extra cash and hates car payments.
The bottom line here is, if you can't afford it, don't buy it. Why is that so hard for most people? I just can't wrap my head around it. Yes, it's easy to get in over your head, but it's also not that difficult to get out. The problem is that people's financial situation changes and they don't WANT to downgrade. If they can no longer afford the car, sell it and buy something you can afford. I wouldn't own my truck if I couldn't afford it. If I needed too, I would sell it tomorrow, and buy a much cheaper car. Life changes, and we gotta roll with the punches.
Holy crap, we agree on something?!
The bottom line here is, if you can't afford it, don't buy it. Why is that so hard for most people? I just can't wrap my head around it. Yes, it's easy to get in over your head, but it's also not that difficult to get out. The problem is that people's financial situation changes and they don't WANT to downgrade. If they can no longer afford the car, sell it and buy something you can afford. I wouldn't own my truck if I couldn't afford it. If I needed too, I would sell it tomorrow, and buy a much cheaper car. Life changes, and we gotta roll with the punches.
Holy crap, we agree on something?!
Same thing with finances. I guess one thing is people are different right off the bat. My dad told me there are actually more than two kinds of people, savers, and spenders. There are people that create. But he told me you're a saver, and that's good. I truly believe, that many people today simply do not feel obligated to leave anything to charity, or heirs. And that is like cutting the strings to a parachute. Total freedom.
When I saw $600/mo. for a Civic, I think to myself, I've purchased a BMW new, purchased my wife's car new, my Maxima when I was young, new. None of these were over $300 lol
Just me, I felt good to take the money out of the bank, and buy a 11 y.o. Lexus. Other people would say that's you, not me. You say you would have gotten a M2 or Golf R instead, well, the amount of fun and enjoyment you lost, cannot be made up with money that you saved.
My demand for a Corvette, for a M3, for a 911, right now, is zero. Because even though I am willing, I am not able, to buy one. The other ways to put it into the garage are not for me.
I don't see the need to post exact numbers, but I decided to put 70% down on the BMW. Because this was stock market money, I figured I wanted to use it and not lose it. In retrospect, it felt good during 2009 but in reality, of course, the money had a cost associated with pulling it off the market. It is what it is, opportunity costs are associcated with everything.
02-15-19, 08:52 AM
#89
Dysfunctional Veteran
Some people simply have to have certain things no matter if they truly can't afford it. It's sad but true like I said in an earlier post it's the keeping up with the Jones's mentality. Couple that in with extensive marketing by companies, social media etc....and some people feel left out if they don't have the latest smart phone or device, 4K TV, lastest car etc...... to each their own the only thing I would consider not a "waste" of money is traveling as you get an experience. And I don't mean to tourist areas of a country. Going off the beaten path is always fun and rewarding.