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Discussion Starter #1
Hi members,
Recently I stumbled upon many articles indicating that auto loans are all time high number of installments like 84 months. All articles says that it is a bad thing. But in my experience it is just opposite. I am listing my reasons below.

1. When I bought new enclave my monthly payments were $550 per month. It was painful in the beginning, but after couple of years income increased, also expenses increases but $550, became comfortable. Any monthly payments which is higher now might feel little comfortable after few years, when income increases.
[ few cases it can go opposite because of life's uncertainty, but according to this forum, it is a minimum].

2. Trade-in, when I go to trade-in, I always try to get more than I owe to the lender. When I traded in my new Rav-4 within two years, my KBB value was $500 less than what I owe. There was major accident repair too. But I hanged on to my demand and finally the dealer caved in and matched the loan amount. Also O got additional $ 3300 discount on new 2010 Enclave.

3. When we still owe, we will take care of the vehicle more carefully than a paid off vehicle. Which lead to use it for few more years. That is my opinion.

4. Anyways, we born in debt, live in debt and die in debt. So what is the purpose of paying off all the loans, when it is only an illusion. Again, this is my opinion.

I invite all members thinking and opinions.
 

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A credit union sent us an offer and used 60k amortized over 72 mos in their ad.

I think it' sad that anyone would do that.

Again, we all know folks who spend like that are leaving nothing to charity and heirs, and likely have little savings.

Edit: born in debt? How so?

The ONLY thing I owe upon is 8 more years on the house. My dad told me people who have nothing, have no qualms about living for today and spending like there's no tomorrow.
 

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To me it is all about what one can afford. I have no issue stretching out the terms of loans nowadays given the low interest rates. My car loan is 2.24%. I have no issue not paying it off early given how cheap the money is. The fact that I easily could pay it off makes me rest easy.
 

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72 and 84 month auto loans encourage buyers to purchase more car than they can actually afford because the payments seem more reasonable. That is why it is easy to find nice one year old used cars that were traded in by those who finally realized they could not afford that fancy ride.

My daughter and her husband only buy low mileage used cars when they need a vehicle and pay cash. Other than a house payment, they have no debt so not all young people have to wallow in debt their whole life. Just have to develop some disciplined buying habits.
 

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4 years max for me on a loan. And the only reason I do it is because interest rates are so low that I can make more money on my investments than the interest charges.

Long term loans are a bad idea to me unless you resolve yourself to always having a car payment, and that's not something I care to do. Most people would tend to get tired of a vehicle before the loan is paid off with a long term loan, so you have a loan forever.
 

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We have no problems on 60 month loans as we did for the 3 GM's we purchased. But they were at the 0% offered at that time.

Husbands new car is .9% over 60 months, close enough to 0% and he still will say, better to use their money instead taking ours out of the bank.
 

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Discussion Starter #7
john 070 said:
A credit union sent us an offer and used 60k amortized over 72 mos in their ad.

I think it' sad that anyone would do that.

Again, we all know folks who spend like that are leaving nothing to charity and heirs, and likely have little savings.

Edit: born in debt? How so?

The ONLY thing I owe upon is 8 more years on the house. My dad told me people who have nothing, have no qualms about living for today and spending like there's no tomorrow.
I owe a 24 year mortgage and 5 year auto loan. Technically my son and daughter do not owe for these loans, but I have a funny thinking that they born in these debt. I do not think that majority of citizens can live debt free unless they hit a lottery. My auto-loan in 1.99 % interest, and at least for next 5 years I have to keep my urge to get a new set of wheels. When I was in India, I was so arrogant that, I thought that I am controlling my life; so I had 1 year plan, 5 year plans and 10 year plans. That was before marriage and most of them worked out. After coming here with my pregnant wife, the one thing life taught me that my plans are uncertain but only god's plans are certain. So what is the purpose of big big micro planning the life, when it can take a funny turn at any time. It works out for very few lucky people, but for majority they always go for plan B, which is never planned or thought of. But this is my philosophy, if it seems similar to somebody else's that is just coincidence.
 

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Discussion Starter #8
Bayner66 said:
72 and 84 month auto loans encourage buyers to purchase more car than they can actually afford because the payments seem more reasonable. That is why it is easy to find nice one year old used cars that were traded in by those who finally realized they could not afford that fancy ride.

My daughter and her husband only buy low mileage used cars when they need a vehicle and pay cash. Other than a house payment, they have no debt so not all young people have to wallow in debt their whole life. Just have to develop some disciplined buying habits.
From your post it looks like you have years of wisdom than me. I am 42 and 9 year daughter and 3 year old son. It looks like your kids started right. But they already owe a mortgage, after few years they are going to buy couple of new cars. If you don't mind i would like to ask you a question.
If you lived your whole past life by only using used cars by making economically wise choices, now when you look back, will you be really excited or satisfied that you lived like that?
Here am just trying to get your perspective on a very hot California afternoon (102 degrees outside), please do not misunderstand that I am trying to prove something. My 9 year old daughter is sitting near and watching me and asking what daddy is typing.
 

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If you lived your whole past life by only using used cars by making economically wise choices, now when you look back, will you be really excited or satisfied that you lived like that?
Making economically wise choices is the lifestyle my daughter and family has chosen but they are financially "comfortable" and can do just about anything they want so they won't be looking back and regretting much of anything. She is currently looking to purchase a "used" car but it will probably be a year old Infinity QX60 so I don't think she is depriving herself much. Unfortunately, not all young couples have that latitude and freedom of choice.
 

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Discussion Starter #10
Bayner66 said:
Making economically wise choices is the lifestyle my daughter and family has chosen but they are financially "comfortable" and can do just about anything they want so they won't be looking back and regretting much of anything. She is currently looking to purchase a "used" car but it will probably be a year old Infinity QX60 so I don't think she is depriving herself much. Unfortunately, not all young couples have that latitude and freedom of choice.
The financial freedom to make the choice,that is important and powerful. I remember that in the beginning, I waited for one year to buy a $12 new frock for my daughter and I was so sad in the financial situation and that times it deemed as extravagant. But today sometime I deny her request for even $5 t-shirts, just as a policy of buying new dress without any control and I am not sad about that. Because we have the financial freedom to accept or deny that demand.
If you go for luxury vehicles like infinity buying one year / two year old is an excellent choice. Once again thank you for sharing your personal thoughts.
 

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If somebody needs to finance a car over 84 months, then they are buying way too much car!

Personally, I don't like financing, and have never bought a car that I didn't pay for in cash. Heck, even my first house I only financed with a 5-year mortgage so I wasn't living my life in debt. Now, if there is a 0% offer on the table, then I suppose it makes sense to take advantage of a free loan and put your cash to more productive uses earning money elsewhere. However, I've also seen deals where if you don't take the 0% financing, you get an additional rebate, meaning the free loan isn't always truly free.
 

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Here in the USA, we live high off the hog, let's be honest. You have people 50+ y.o. who still have a mortgage.

My aunt sold her house in NorCal, so I said to my cousin wow imagine all the equity she had, guess she paid cash for her new house (her house sold for 1.2 mil. and is 3-bed, 2 bath). Her new house 75 miles from Oakland was 300k, new construction. WRONG. She borrowed money to get the new place, and has to be nearing 60. This is what being American is all about. Borrow against your equity, owing is ok. She had a forced retirement in her late 40's and hasn't worked at a corp. job in 10 years. Selling on eBay, tutoring math, these supplement her lifestyle (she has the latest BMW M3, it's less than 1 y.o.--leased, of course).

I say if we really want to be honest with ourselves, and stop saying just because we can obtain credit, we can afford, look to our brethren up north.

They have no interest deduction, and 10 yrs. to pay off a mortgage, and sick crazy income taxes. Yet last I checked, EVERY ONE OF MY IN-LAWS IN TORONTO OWN A HOME. They do not have a < 36 mo. old car in most cases, except one cousin who has a co. car from his job.

https://www.hsbc.ca/1/2/personal/borrowing/mortgages/hsbc-mortgages

We have been responsible all our lives, like I said, we're not very old, 8 yrs. left on the mortgage, so we'll be paid off in our 40's. BUT, we have an 18 mo. old boy and concerned about the schools, etc., need more space, blah blah blah. And I want to do a 30 yr. because how else can we finance potentially 6 to 7 hundred k (it's a size upgrade, and a location upgrade)? My friend strongly advised against it, yet guess what he and his wife are doing? Building a new house, with a 30 y.r. mortgage.

If life were as simple as borrowing, how come everytime I mention ice hockey, people say, "You've really chosen an expensive sport for your kid."

People who have nothing are driving 63k Suburbans on monthly payments, how in the world could ice hockey be expensive? Oh wait, you mean I can't lease ice hockey for my kid? :drunk:
 

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Discussion Starter #13
john 070 said:
Here in the USA, we live high off the hog, let's be honest. You have people 50+ y.o. who still have a mortgage.
Hi John or other members, I have a question and it is not legally binding anybody anyways.
If we own a house after retirement , I read somewhere that we will not get medicare and stuff like that. Does anybody know about this? I have no idea about this aspect. also I don't know whether it is true. Any ideas/infos?
 

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If we own a house after retirement , I read somewhere that we will not get medicare and stuff like that. Does anybody know about this? I have no idea about this aspect. also I don't know whether it is true. Any ideas/infos?
As a retired "senior citizen" who owns his home, I receive monthly Social Security payments based on my years of working and paying into the system. I also qualify for Medicare as my primary health plan provider for which I pay just over $100.00 a month (this payment is deducted from my Social Security check).

There are cases where people who need medical or nursing home care but have no assets to pay for such, can be assisted by the Medicare/Medicaid system. To receive this assistance those people must have assets below a certain level to qualify. It may be required that the person sign over or sell their property and other income (pensions, Social Security) in exchange for this assistance.

As an example, my Mother-in-Law is currently in a nursing home. Currently her income from pensions and savings pays for this. In three years she will no longer have enough money left to pay for her care. At that time she will go on Medicare assistance and be required to turn over her pension income above the limit she is allowed to keep to offset some of the cost of the care Medicare will now pay for.

A quick and simple overview of a complicated program that will vary for each individual based on their situation at the time they need assistance
 

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Discussion Starter #15
Bayner66 said:
As a retired "senior citizen" who owns his home, I receive monthly Social Security payments based on my years of working and paying into the system. I also qualify for Medicare as my primary health plan provider for which I pay just over $100.00 a month (this payment is deducted from my Social Security check).

There are cases where people who need medical or nursing home care but have no assets to pay for such, can be assisted by the Medicare/Medicaid system. To receive this assistance those people must have assets below a certain level to qualify. It may be required that the person sign over or sell their property and other income (pensions, Social Security) in exchange for this assistance.

As an example, my Mother-in-Law is currently in a nursing home. Currently her income from pensions and savings pays for this. In three years she will no longer have enough money left to pay for her care. At that time she will go on Medicare assistance and be required to turn over her pension income above the limit she is allowed to keep to offset some of the cost of the care Medicare will now pay for.

A quick and simple overview of a complicated program that will vary for each individual based on their situation at the time they need assistance
Thank you very much. I got somewhat idea. seems complicated. It looks like house never looses.
 

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Bayner66 said:
As a retired "senior citizen" who owns his home, I receive monthly Social Security payments based on my years of working and paying into the system. I also qualify for Medicare as my primary health plan provider for which I pay just over $100.00 a month (this payment is deducted from my Social Security check).

There are cases where people who need medical or nursing home care but have no assets to pay for such, can be assisted by the Medicare/Medicaid system. To receive this assistance those people must have assets below a certain level to qualify. It may be required that the person sign over or sell their property and other income (pensions, Social Security) in exchange for this assistance.

As an example, my Mother-in-Law is currently in a nursing home. Currently her income from pensions and savings pays for this. In three years she will no longer have enough money left to pay for her care. At that time she will go on Medicare assistance and be required to turn over her pension income above the limit she is allowed to keep to offset some of the cost of the care Medicare will now pay for.

A quick and simple overview of a complicated program that will vary for each individual based on their situation at the time they need assistance
My Mother, she passed 2 years ago today, owned her own home. She was in and out of nursing homes the last 6 months of her life. She also received Medicaid which covered the majority of her stay during that time. After she passed I received a bill from the state of Ohio for $18,383.00+ for the Medicaid coverage paid by the state for the nursing home care. My attorney, who handled the estate settlement, ended up settling with the state for $4,700.00+. Why we ended up paying so little was after selling the house and settling up the expenses, that was all that was left.

She did pay for Medicare monthly, including the part D coverage. I cannot remember how much though. All the paperwork I have is boxed up and stored in a closet upstairs, in what I did and still refer to as her room when she would stay with us.

I am retired and collecting SS, but I still have insurance through the company my husband works for. When he retires in 2 1/2 years, I will be 65 by then and eligible for Medicare. He won't as he will only be 62 at that time. Hopefully we won't have to depend on Medicaid during our later years, but, it is there if needed.

Clear as mud? Medicare/Medicaid is a difficult system to migrate through.
 

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Discussion Starter #17
Sailfish said:
Clear as mud? Medicare/Medicaid is a difficult system to migrate through.
Hi Sailfish, I appreciate your input. It looks like there is no hard and fast rules. We are working very hard and in the end there is no blanket, we have to pay the expense including the funeral. Seems fair, but disappointing. Unless we earn a million bucks or more there will be probably nothing left for kids. Again house wins.
 

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Paul2010 said:
Hi Sailfish, I appreciate your input. It looks like there is no hard and fast rules. We are working very hard and in the end there is no blanket, we have to pay the expense including the funeral. Seems fair, but disappointing. Unless we earn a million bucks or more there will be probably nothing left for kids. Again house wins.
Ok let me say upfront that with my wife not currently working, we qualify for a ROTH IRA, and are not phased out. That gives you an idea of if my income is >= 1 mil. or not.

I do have friends whose income is > 1 mil. per year. They have a very big burden as that is not all that much money. It may have been a lot in our great grandparents' days, but it is not today.

Example, I have a friend who has 2 girls at Vanderbilt, 1 entering Notre Dame in the fall, and a son in 10th grade. he told me he pays the full monty for the 2 girls, and expects the same for the 3rd. Even Ivys do not offer the great 10% of gross income deal when your income > 200k. Look at his college burden alone. Does he and his wife get to live or save for their future? He drives an Accord. Shouldn't a guy making a million drive a Porsche? No. A guy making 200k drives a Porsche, a guy making a million drives a 2007 Accord with over 200k miles. This is reality.

When you say the house wins, should we all just jump off a cliff? lol
 

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Paul2010 said:
Hi Sailfish, I appreciate your input. It looks like there is no hard and fast rules. We are working very hard and in the end there is no blanket, we have to pay the expense including the funeral. Seems fair, but disappointing. Unless we earn a million bucks or more there will be probably nothing left for kids. Again house wins.
Yep and make sure you have at least enough insurance to cover the funeral cost. Mother thought she had enough but in the end I paid over $4,000. for her funeral. I am not complaining as I always knew I would. It can be a shocker and she even had her own plot, next to Father's.

Some funeral homes offer preplanning, my Mother did that, to some extent banking on the insurance she had would cover it. As I said above it didn't. LOL I told my husband I want to be cremated instead.
 

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john 070 said:
Ok let me say upfront that with my wife not currently working, we qualify for a ROTH IRA, and are not phased out. That gives you an idea of if my income is >= 1 mil. or not.

I do have friends whose income is > 1 mil. per year. They have a very big burden as that is not all that much money. It may have been a lot in our great grandparents' days, but it is not today.

Example, I have a friend who has 2 girls at Vanderbilt, 1 entering Notre Dame in the fall, and a son in 10th grade. he told me he pays the full monty for the 2 girls, and expects the same for the 3rd. Even Ivys do not offer the great 10% of gross income deal when your income > 200k. Look at his college burden alone. Does he and his wife get to live or save for their future? He drives an Accord. Shouldn't a guy making a million drive a Porsche? No. A guy making 200k drives a Porsche, a guy making a million drives a 2007 Accord with over 200k miles. This is reality.

When you say the house wins, should we all just jump off a cliff? lol
College is expensive. My husband paid his way through Cornell for his first year back in the late 70's. BUT back then, knowing what my husband paid, we would laugh at what the cost was, and then cry at what it costs now.

After his Father passed his Mother started working at the University of Pennsylvania so he finished his 3 years there at no cost.
 
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