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05-03-2010, 08:38 PM | #45 | |
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05-03-2010, 08:41 PM | #46 |
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Are you serious? I heard at least 1 week before your pick up date you need to pay. That's why I went in today. My ED pick up is Monday, May 10. But because of the last second phone call, I have to go in tomorrow to pick up my credit union check and sign with BMWFS. Obviously less than a week tomorrow so I'm sure there is flexibilty, but your are cutting it close...
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05-03-2010, 10:21 PM | #47 |
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Just throwing it out there...but make sure you understand the ballon payment and are comfortable enough with the terms / amount owed upon ballon drawdown...ballon style loans work well on houses as most home buyers are betting on the home becoming an appreciating asset thus keeping the loan from being under water...whereas the car is a depreciating asset (e.g. mileage, condition, accidents)...which can force you to owe a ballon on something far less valuable...anyway just my random thoughts..
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05-03-2010, 10:52 PM | #48 | |
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Yes. Fully aware on the concept. In my case, I'll be putting down a little over 20K. In year 2-5 I plan on accelerating my payments by 400+ per month giving me a balloon note of 0-10K. In addition I drive about 8,000 miles per year. So I can skip the balloon altogether and make a few extra bucks if I sell before the end of the term. I went with balloon cause I wanted a lower payment in Year 1. I don't mind paying down the few extra bucks in interest on the balloon in the first year without compromising my lifestyle. I could have just waited the year, but my current lease is up in May. I think the rule of thumb is a minimum 8:1 net income to car payment ratio per month. |
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05-04-2010, 12:02 AM | #49 |
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05-04-2010, 08:32 AM | #50 | |
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I got the call at the end of the day. Around 5:30. Even the GM sent me an e-mail in the evening. I don't think they will post 2011 rates online. Just 2010. |
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05-04-2010, 11:01 AM | #51 |
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10-31-2010, 02:20 PM | #53 | ||
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I'll take a balloon over putting up the money upfront any day for a few different reasons... 1.) It's my money and I feel way better in general if it's in my possession for as long as possibly possible. 2.) Currency depreciation. This happens; no way around it. So in the 3-5 years your balloon payment is due, the almighty dollah dollah bill may depreciate by as much as 20% (or more, who knows really these days) so effectively, the $20k you pay in 5 years will be worth much less to you at that point than it means to you today. You will also be making more money in 5 years. The banks and finance companies justify this by charging you interest year over year to offset for depreciation and yield some green for themselves. This brings me to my last point... 3.) Invest that large down payment into a compounding interest bearing account. Even though you are essentially investing with borrowed money, you're getting the money very cheap @ 4.25%. If you can yield anything higher than that PLUS reap the benefits of the magic of compounding, the rough numbers might look something like this. Cost: $20k down payment deferred to balloon payment in 5 years. 4.25% interest - $850/yr in interest; $4250 total (if they compound yearly, it will be more in the ballpark of $4626 in total interest paid) Earnings: Put that $20k into a mutual fund yielding 8.5% and compounding yearly (you may be able to find better rates with more frequent compounding, but we'll play it conservative) Start with $20k principal -> earn $10073.14 in interest -> end with $30,0173!!! So you made $5k by doing it this way, and that's not counting the money you save on payments or depreciation. Or am I missing something? |
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10-31-2010, 03:59 PM | #54 | |
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10-31-2010, 10:52 PM | #56 |
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11-01-2010, 11:15 AM | #58 |
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