Ford begins 0-72 loans, includes subprime buyers

[bri719]

I realize I'm old fashioned and overly conservative for the times....but I just don't understand why anyone would consider purchasing a car they couldn't pay for in 3-4 years. If that means buying a plain Focus, then so be it.

 

If I had to make payments for up to six years just to be able to make the payments, then I would know I am buying too expensive of a car for my situation.

 

So pay me no attention....expect my weird notions did get me retired by the time I was in my mid 50's.

 

 

maybe 10-15 years ago, the average car used to be financed for 4 years. nowadays new cars are (relatively) more expensive and partly as a result the average car is financed for 5 years. offering low (or no) interest up to 72 months only stretches that average and yes, the side effect is it encourages people to buy way more car than they could normally afford.

 

financing a car beyond 5 years is rarely a good idea and can actually be a disaster as you imply. rarely, not never, but it's rare - 0% APR helps make it even plausible. I was planning to go 60 months on my next purchase anyway so I'm hoping they offer something close to this again. even if it's not 0% I'll take anything that might beat a standard new-car rate

 

in my opinion, the rule of thumb should be to not finance a car beyond the length of whatever warranty you have. this allows the average joe to theoretically still make the payment and operating costs should anything go wrong - of course it helps to make sure your deductible is minimal or nonexistant, never paid one with a Ford so that's good. this "rule" isn't perfect however, someone could still be upside down in the first few years even they do observe it. depends on different factors one being the interest rate, once again.

[Ralph Greene]

My Dad allways thought you should roughly figure out how much your new car would depreciate over the time frame you're making payments, and divide that by the number of months you're paying so as to get the monthly depreciation rate.

 

Then put enough down on the car so your payments are roughly the same as the depreciate rate.

 

That way you are paying each month the real cost to own the car as you use up the car. You are also putting the actual direct car depreciation costs into your family budget. He felt it made his life easier to always know what his car cost...plus insurance and maintenance was. It also tended to make him purchase cars with lower depreciation rates, since that is the real car cost.

Edited August 28, 2006 by Ralph Greene

[ANTAUS]

That is a very smart thing to do, unfortunately, not evernone is that intelligent, specially with consumer debt at an all time high. Ironically my motto has been, "if you can't afford it, dont can't buy it"... this coming as an offsptring of parents who's motto was "If you have to look at the price, then you can't afford it".

 

Then agian, "If you haven't used it in 6 months, throw it away"..and about a 73% of the population use their garage to store junk, not cars LOL

[bri719]

My Dad allways thought you should roughly figure out how much your new car would depreciate over the time frame you're making payments, and divide that by the number of months you're paying so as to get the monthly depreciation rate.

 

Then put enough down on the car so your payments are roughly the same as the depreciate rate.

 

That way you are paying each month the real cost to own the car as you use up the car. You are also putting the actual direct car depreciation costs into your family budget. He felt it made his life easier to always know what his car cost...plus insurance and maintenance was. It also tended to make him purchase cars with lower depreciation rates, since that is the real car cost.

 

 

very smart, another good approach