Cash for clunkers will get many people even more indebted

[drcha]

How do you know it's people who can't afford them buying them? Maybe it is the millionaire-next-door types, the people who drive their cars into the ground. Some of the most wealthy people I know pay cash for cars and are driving old cars. It seems to me it's usually the less well-heeled who think they need a new car all the time, in case someone is looking at them. They have not figured out that no one else cares what you drive.

If I had a clunker worth almost nothing, you can bet I would be in there immediately collecting my 4K and getting something new--for cash. I don't use credit to buy cars, or to buy anything else, except real estate. In fact, if my dear old clunker had not blown up on the freeway a couple of years ago, I would have a nice clunker now to turn in

 

[snowhite]

Quote from drcha:

How do you know it's people who can't afford them buying them? Maybe it is the millionaire-next-door types, the people who drive their cars into the ground. Some of the most wealthy people I know pay cash for cars and are driving old cars. It seems to me it's usually the less well-heeled who think they need a new car all the time, in case someone is looking at them. They have not figured out that no one else cares what you drive.

If I had a clunker worth almost nothing, you can bet I would be in there immediately collecting my 4K and getting something new--for cash. I don't use credit to buy cars, or to buy anything else, except real estate. In fact, if my dear old clunker had not blown up on the freeway a couple of years ago, I would have a nice clunker now to turn in

You ain't no millionaire, put your smiley face away please.

 

[jprad]

Quote from drcha:

If I had a clunker worth almost nothing, you can bet I would be in there immediately collecting my 4K and getting something new--for cash. I don't use credit to buy cars, or to buy anything else, except real estate. In fact, if my dear old clunker had not blown up on the freeway a couple of years ago, I would have a nice clunker now to turn in

Well, I'll give you kudos for realizing that a car is just transportation to the rich. But, you've also let us know that you're not rich, because you're not thinking like one.

Rich people know how to leverage OPM to their advantage. Paying cash in full on a car is not the way to go when there are low to zero percent financing deals out there.

Even if it's less than a CD you come out ahead in the end.

 

[Copernicus]

who even comes up with these idiotic ideas?
seriously....

why not just buy new cars for people that want them and voted for obama.

 

[drcha]

You guys are going off the deep end here. I simply meant to point out an alternative point of view. I sincerely apologize if I somehow offended anyone personally. I did not intend to.

OPM is for buying appreciating or income producing assets, not for buying depreciating toys. Lenders know the difference between good debt and bad. Car loans are the same as credit card debt. They detract from one's ability to borrow for more useful purposes, whether or not interest is charged.

Actually, yes, I am a millionaire. And I will keep on driving the car I have until it, too, is a clunker.

 

[Maverickz]

Quote from drcha:

OPM is for buying appreciating or income producing assets, not for buying depreciating toys. Lenders know the difference between good debt and bad. Car loans are the same as credit card debt. They detract from one's ability to borrow for more useful purposes, whether or not interest is charged.

Buying a car on credit with a low to zero interest rate can help increase your credit rating. First doing this and paying the car off with every payment on time shows credit worthiness.

Second a very important key piece of credit data (that is often overlooked and not understood by most people) is debt to credit ratio. Buy a car on credit even if you can afford to pay cash. Put down the minimum down payment required. Pay down the principal to 50% of the original amount over the course of just a few months. This will cause the full amount of the car to show on your report as credit but half of the amount as debt improving D/C ratio. By getting an auto loan say for $30k you increased your total available credit line by $30k, but knocking the amount owed down to $15k your net D/C ratio increased and thus your overall credit score increases.

The same can be done with credit cards. Say you have only one CC with a $10k limit on it and you have it maxed out. This lowers your D/C ratio. You can get another CC or two and just put them in a drawer never to be used and increase your D/C ratio and thus your credit score.

I keep a close eye on my credit scores and manage my D/C ratio by opening and closing CC accounts as needed and always keeping one car (and only one car) on my credit rating at all times. This shows continual on time payments and that I have plenty of available credit in multiple revolving accounts....all in good standing.

It takes work to keep a consistent credit score 750+.

 

[number22]

Four of Top ‘Clunkers’ Model Purchases Are Foreign
while this defeat the purpose of whole deal for helping American auto industry. they vote it by buying foreign cars.

 

[Maverickz]

Quote from number22:

Four of Top ‘Clunkers’ Model Purchases Are Foreign
while this defeat the purpose of whole deal for helping American auto industry. they vote it by buying foreign cars.

Really it's hard to determine what is really foreign and domestic these days. I remember back in about '92 or so a friend of mine was in the market for a new car and because he was wanting to buy American he was looking at getting an Eagle Talon. I mean what could be more American than a Jeep/Eagle product right? Then we looked at the %'s of foreign and domestic parts (listed on the window sticker)....it was 60% FOREIGN. We then compared that to it's sister car, the Mitsubishi Eclipse. Guess what the Eclipse was only 50% foreign!

As far as Toyota goes they have a huge facility in Dallas, Texas that cranks out a good potion of the Toyota's sold in the US. So buying a Toyota can help the US economy. Considering Gm got bail out money and used it to build a factory in Brazil instead of helping US workers, I'd rather buy a Toyota from Texas than a GM from Brazil.

 

[number22]

Quote from Maverickz:

Really it's hard to determine what is really foreign and domestic these days.

It quiet simple, if the majority share holder are American, then it is American.

If American auto build its cars in foreign countries and ship its products back, and making a profits to its shareholders. It better than shipping profits out of American to foreign countries. Profits is profits doesn't matter where it comes from, but it will be matter who owns profits.

get it kid.

 

[Maverickz]

Quote from number22:

It quiet simple, if the majority share holder are American, then it is American.

If American auto build its cars in foreign countries and ship its products back, and making a profits to its shareholders. It better than shipping profits out of American to foreign countries. Profits is profits doesn't matter where it comes from, but it will be matter who owns profits.

get it kid.

Do you not realize that Toyota (symbol: TM) trades on the NYSE? Do you not realize that US stocks are traded by people from just about every country? Do you have some magic indicator that shows what country the majority of share holders reside in? I sure don't. For all I know most GM investors are in China.