How are your monthly payments, and interest?

When I bought my first brand new car, I put down $5000 and regretted it later. I could have taken that $5000 and invested it into stocks, or at least an interest earning money market account or a CD. I would have made back the interest I would have saved by financing less plus some. Oh well.. we live and learn.

If you buy the Prius, you won't regret it... I don't own a Prius, but I haven't seen many people disappointed in their purchase. In fact those who are disappointed are the ones who expect to get 60 MPG from it.

If you really want it, go for it. It's not the end of the world my friend. You're young and you can afford to make mistakes. I'm not saying this would be a mistake, but if it is, you have plenty of time to get back on your feet.

What if you bought a $14k car and save and safely invest $10,000 for a future down payment on a house? Just throwing that out there.

 

<div class='quotetop'>QUOTE(mywhitenoise @ May 23 2006, 12:23 PM) [snapback]259733[/snapback]</div>

No, it's not a bad decision.

I bought my first new car when I was 24 and bought what I could afford, not what I really wanted. At that point, I was already living on my own and had other bills with which to be concerned. I put down $1000 and financed the rest, no co-signer. The first year was tough, but I was able to pay off the loan 2 years early (with no early payment fee).

It looks like you've done some research about insurance, loan rates, and cars, so you should feel confident in making your choice.

Good luck.

 

I think the key to it is to see if you can get an interest only loan for the first 8 years, then go to an adjustable rate plan designed to get you cleared off over the 72 months I saw in an earlier post... 14 years is not too long to pay interest on a Prius!! hahahaa..

:blink:


What's with that 72 month loan on a Prius.. or any car...

If a depreciating thing like that isn't paid off in 12 to 24 months, you're nuts to be buying it.... Even to pay interest for that long is lining someone's pockets with a lot of interest $$..

Stay out of auto debt, CC debt, boats, ATV's, big screen TV... you avoid all that junk and debt, you'll be thanking yourself later on when you find out all your friends have that junk stacked up in the garage, they never use it and they have the American Dream $40,000 debt and you don't.

I bought a $2500 mower tractor a bit over a year ago. Rather than pay cash, I did their 12 months no interest, no payments, nothing plan thinking I'd keep the $2500 in the bank and then pay cash in a year instead of now. That's exactly what happened, but that whole 12 months, I had this weight hanging over my head that I owed that money. It was a good thing when I paid it finally and stopped thinking about it. The few bucks interest I made on the money over the year is not worth it.

Keep your debt low or 0, a car is not worth it.

 

What payments? If you don't have the cash don't buy it. Its hard to believe that the average american has 5 grand on their credit cards

 

I was lucky enough to pay cash, but I inquired about interest rates and was told 6.5%, in California. Good luck, you might try a credit union. Keep away from credit cards unles you pay off the balance every month.

 

You sound pretty smart to me. Stretching for a reliable, economical car is okay, especially with your circumstances. Good income, stable parents, etc. This purchase can help you establish the much-needed credit you'll use later in life.

Debt is not to be feared. Most of us are "in debt" our whole lives. Debt is a great way to help you diversify and reduce risk. One extreme example is home ownership. When people talk about saving up for a house, they don't mean buying the house outright, they mean the DP... 10-20% of the total home price. Then, typically, the house appreciates as you slowly pay off the principal. If you had a $700K house (average for where I live) and you inherited $700K after tax. Financial experts would tell you not to pay off 100% of your loan (assuming you have no other assets (like you)). The debt will keep you diversified. Most experts advise no more than 50% of your net worth should be comprised of your primary residence. In this case, you'd want to invest $375K in stocks and bonds and enjoy the debt as part of your overall portfolio.

Besides $14K at 6% for 60 months is only $271 per month. That's only two days worth of mortgage payment in Silicon Valley.

 

I am in my late 40s now. My Prius is my first new car, and most likely my last. There are more important things to do with your money when you are so young, such as starting some savings for retirement. Get yourself a Honda Civic, or if you absolutely need a hybrid, a Civic Hybrid.

By the way, I have never made a car payment, although I have owned several Civics, a couple of Accords, and an old Chevy Impala. B) I have always bought my cars outright, with cash. Not that I haven't been in debt, but I have always been able to see the light at the end of the tunnel such that debt was paid off completely within a year.

 

<div class='quotetop'>QUOTE(finally_got_one @ May 23 2006, 02:03 PM) [snapback]259925[/snapback]</div>

I'm curious as to why two people now have said that buying a civic hybrid is cheaper than a Prius. The base price for the prius is $21,725 and the Civic Hybrid is $22,150.

 

<div class='quotetop'>QUOTE(clintd555 @ May 23 2006, 10:53 AM) [snapback]259715[/snapback]</div>

All of those depreciate dramatically more than a Prius (which doesn't seem to depreciate much at all). Currently, it's as good an investment as you can make in a car you intend to drive, new or otherwise.

 

<div class='quotetop'>QUOTE(too tall @ May 23 2006, 04:53 PM) [snapback]259918[/snapback]</div>

A lifetime of car payments is an expensive habit --

If you live within your means, save that interest, and invest it responsibly over a lifetime at 7% interest after inflation, you will be $200,000 of *today's* money richer.

Total cost to you: buy your cars with cash, whatever they may be.

BTW, the cost difference should include car insurance. There is no reason to have collison on your 10 year old Toyota, but your lender will force you to carry it on a new car until paid off.

 

Finally I am a cash customer. Here is my bit of unsolicited advice.

I would buy a used car with good residual value (like a five/six year old Civic) that you can keep for several more years. And keep your payments lower than you can afford. That way you can make additional payments when cash flow allows and you are not stuck with a big pill in those tight months.

If you can pay it off early, then keep putting at least your payment into savings. When you are ready to upgrade, hopefully your car will still be worth 50% of what you paid. Keep up the cycle until you can either pay in cash from savings (leaving at least 6 months of expenses) or make enough to afford the payments and still pay off in a couple of years.

Whatever you do, keep the car for several years. I know so many folks upside down in car loans because they get a new one that they can barely afford every few years.

Good luck!

 

I have never been a believer in debt and my Prius will probably be the last car I buy new. New vehicles are a very poor investment. The Prius will probably hold its value better than any other car out there. The price of fuel, the technology, and helping our environment plus the reliability of the Toyota product are what sold me.
I got 4.5% 60 months on a $21000 loan my payments are $391.40 per month thru my credit union. I am able to double them up and hope to pay it off in less that 18 months. You might want to check out the direction of a guy named Dave Ramsey he has good advice regarding finance on his radio talk show and his website. Good luck http://www.daveramsey.com

http://www.daveramsey.com/etc/stupid_tax/i...tContentID=4750

 

<div class='quotetop'>QUOTE(daronspicher @ May 23 2006, 02:07 PM) [snapback]259793[/snapback]</div>

I was the poster with the 72 month loan on my Prius...way to make it personal, thanks!

I just wanted to stick up for myself and say that although I have a 72 month loan, I did my homework first. There is no early pay-off penalty, and I've already paid almost half of the prinicpal down in the first year. What is wrong with having a back-up plan? I am only 23 but make more than my parents ever did combined in my first year out of college (which I paid for myself, no less partially by loans, which are now paid off. Are college loans a bad investment too? )

Sure, I might be losing some money to interest, but I drive a car that saves me over $1400 a year in gas money over what I used to drive - which got 30 mpg. I also stand to pay many thousands of dollars in interest on my new home, but I already have more paid down on my principal in less than a year - in addition to my monthly payments - than any mortgage would have you pay down in 5 years.

It's certainly a better idea to pay cash for everything, but that's not always possible at a young age. I'm not necessarily encouraging the OP to go out right now and buy a new Prius, but I'll at least entertain the possibility. Why are so many of you so cynical about credit? Did you ever start out with nothing to your name and have to work for it all? It certainly doesn't sound like it.

 

<div class='quotetop'>QUOTE(mywhitenoise @ May 23 2006, 09:23 AM) [snapback]259733[/snapback]</div>

Before you apply for a loan, check what your credit rating is. I think you can do this at either E-Loan or Capital One for free.

If you have 10k, have you considered getting a used 2001 Prius? They still run great, and a few years later you'll be able to sell it and get a cool new 2008. Yes, you need to get another car before your Corolla dies, but don't need a brand-spanking new car.

 

<div class='quotetop'>QUOTE(mywhitenoise @ May 23 2006, 11:55 PM) [snapback]260129[/snapback]</div>

I'll guess sales

 

<div class='quotetop'>QUOTE(EricGo @ May 23 2006, 11:25 PM) [snapback]260150[/snapback]</div>

With a degree?



(my apologies to the salespeople amongst us )

 

For every academic department, there is another that is a glorified tuition mill.

 

Just wanted to contribute my 1 cent, and I'll make it as brief as possible. Here's my story"

I'm 22, just graduated from college. I signed on with an accounting firm last October for a job starting this coming September. After (literally) years of reading, studying, and just learning everything I could about all possible car models, financing options, etc., I made the big splash in mid-March, when the local dealership was offering a $1500 discount on the Prius - I knew this deal wouldn't last (and it didn't, so I'm definitely glad I got it when I did).

Let me also say that I am EXTREMELY happy with the car, and I can't imagine driving anything else. Once I start commuting to various client sites all over the area, I know that the navigation system and great city mileage (in this congested DC-Baltimore area) will more than pay off, and the peaceful ride of the Prius will keep me calm while other drivers are heating up.

Regarding the financing, I don't yet have a steady income, as I'm taking a few months to study for the CPA exam, but my dad co-signed on the initial agreement. We didn't put any money down, but as soon as I start working, I'm going to re-finance with my credit union without my dad as a co-signer, and pay more than the monthly payments so that I pay off the principal more quickly. One final note is that I plan on living at home for a year or two to save some money and be able to make a good investment when I'm ready for my own real property.

In short, my situation may be comparable to yours in that I'm still getting on my feet but insisted on buying the Prius (and I don't, and won't, regret it even one bit). Income-wise, it helps to know that I will be making enough money to cover the hefty payments AND save up some money for a house, so I wouldn't really recommend doing what I did unless you are in a similar situation. Bottom line - regardless of the decisions we make, we all have to prioritize what we insist on having, and sacrifice whatever matters less to us. If, as in my case, the Prius is important to you, then don't let anyone tell you that's the wrong decision - whether it's right or wrong lies solely on what makes you happy.