[inpuressa]

I need some opinion on this.

When you guys bought your first STi, how much did you have to loan?
Is it worth dishing out most of your savings and borrowing the rest?

At this rate I need to borrow about 12K, but my life savings will be depleted.
Or should I save up and wait for the 09? There is one sitting at the lot right now, waiting for an owner... argh!

[Hitman83]

From a strict financlial standpoint where all that matters is the bottom line "how much is the car going to cost me?" then as long as the interest rate on the loan is higher than the return your getting on your savings it makes more sense to put as much down as possible. However, it's good to have a savings and if the return is close then IMO it's good to have a few grand minimum to fall back on in the event of an emergency. If you're getting a very good return on investement from your savings and it's making more interest than you're paying on the loan than it's a no brainer, finance every penny and don't put anything down.

[Pre]

Don't deplete your savings on wants. Save that cash for needs. A rainy day in life always comes at some point.

That car isn't going anywhere. Waiting only means you'll be able to get a better deal.

[upncummr]

One of the important things in life is to have some financial firepower available to you when you need it. What that means is that you always want to have some liquid resources available to you that you could use when the need arises or when an opportunity presents itself.

Don't make the mistake of stretching yourself too thin to buy a car.

If you need to buy a car immediately, buy something cheap with the knowledge that it's a short-term situation. Continue saving and then when the opportunity presents itself, buy the car that you really want.

Gary

[VROOM293]

We are nothing but specs of dust. We are microscopic bugs in the big picture of time.sunday isnt promised to you nor is 1 min or 1 second from now.
I say sure hide a few grand [5346] rolled up in single bill form lining your curtains .but dont get all felix unger about having some huge safety net.

3 angels on the left shoulder 1 devil on the right haha.

btw you wanted to buy the 08?, mmm ok i change my mind SAVE YER JACK

[GhoSStRyda]

Originally Posted by Pre

Don't deplete your savings on wants. Save that cash for needs. A rainy day in life always comes at some point.

That car isn't going anywhere. Waiting only means you'll be able to get a better deal.

good advice! being it is the first gen, you might want to wait around to see what the next year will offer.

[Dj Hurricane]

DEFINATLY DONT come out of pocket on something that depreciates so FAST!

Stretch as much as you can in time... Just watch your interest rate.
Pay on it monthly//
And when you are ready for a new one trade it in>!

[StealYourFace]

Don't take the plunge unless you can comfortably aford to put at least 1/3 plus tax down. That way you will be in a decent equity position on the car throughout the loan.


I really want a new car too... but I still love my 2002 wagon and no car payment is damn sweet.

[drdome99]

cars are not investments... keep your savings, buy something you can afford without using savings

[CarmG993]

New car rates should be pretty low now. I think I saw between 2.9 and 5.9 in previous posts. Terms from 12 to 72 months.
If you make enough coin to save, pay your bills and float a car loan, you sould be OK. With minimum down, get to a payment you are comfortable with and go for it.
Don't deplete your savings over a car. Invest your money.

[inpuressa]

Thanks for the advice guys.
I had about 8K to fall back on (after borrowing only 10K), but there was an emergency that depleted those savings. I was like a week away to purchase and this happens... . I can technically still get the car, but having nothing to fall back on makes you insecure.

I guess I'll save up more and hopefully get the car later this year. Heck, maybe the 09 might spark some interest for me. If not the 08s might be cheaper then...

I was expecting to get flamed like I do over at nabisco. Thanks for the mature feedbacks.

Guess I'll just drool over this message board for the time being.

[howboutthemapplz]

i have about 4k in credit card debt to fall back on. lol

but i day trade stocks with an account balance much greater than that. and a uber low APR on my cc

[chmura]

100% depleting you life savings on a car is NOT smart. I would not do that.

If you were going to take all your savings and buy a house that would be different.

[RenoSTi]

Sounds like good advice is being given to you here. It is not a good idea to deplete all (or most) of your savings. You just never know when an emergency will come up. For now, "pretend" you got the loan and sock away the loan payment each month until that gives you enough breathing room in your savings so you can then take on a real loan without worries.

[Gray08]

Having made a lot of mistakes when I was younger, it's easy to give advice now. I know how tempting it is to go into debt over a cool car, but it really isn't worth it.

I'll tell you what IS fun: Never having a car payment, and being able to pay cash for every car you buy. If you make that a goal, it will have a huge, positive impact on your personal finances. Of course, it goes without saying that you need to treat credit cards the same way. Use them to build credit only, but never use them to buy something you can't afford to pay with the money in your checking account.

Making car payments is a real anchor around your neck. It gets especially heavy when you owe more than the car is worth, meaning you can't even sell the car, because you could not even afford to pay back the bank if you did.

It's very different from a mortgage, where holding a large mortgage can actually be a financial benefit - provided you can afford to make the payments, of course, and that you don't borrow too much compared to the home's real value (I see forclosures all over the place now because lenders got too greedy and borrowers did not consider the possibility of a major market correction).

Now I digress, but if I'm going off topic on mortgages...
Most people think that it's best to pay off your house as soon as possible, or to make extra payments to pay down the balance. Everyone gets this advice from their parents, because this mentality is left over from the depression when mortgages were not federally insured, and people lost their houses unfairly.

If paying off your house ASAP was such great advice, then why do so many multi-millionaires have large mortgage balances? It's because they are smart financially, or have good accountants. If you have a good mortgage interest rate, and you factor in the tax deductions you get from paid interest, the effective rate is lower than the return most people can get by investing their money, even when you adjust for taxes paid on earned interest. Therefore, the person who puts all his extra money into paying off his mortgage will end up with a house, but nothing in the bank. What if he loses his job along the way or has a major medical expense? He's screwed and broke. He has no savings, and the pride of having a lower mortgage balance doesn't do him a bit of good when things go wrong.

The person who makes minimum mortgage payments and invests all his extra money will have liquid assets - and that provides options. He can afford to lose his job and be without work until he finds another one. He can pay for emergencies if they come up. He might even be able to start his own business and have some freedom from being someone else's slave. Best of all, in the time it would have taken to pay off the house, he will have accumulated not only enough savings to be able to easily pay his house off (if he actually wanted to), but he will have quite a bit more saved on top of that because of the extra accumulated interest.


Anyway, back to the topic: Be patient and drive a beater and pay it off. Then drive it a while longer while making "car payments" to your savings account. When you have a few thousand saved up, trade in the junk car for a nicer beater, or even a decent used car that is somewhat reliable (like an older subaru). Then keep repeating that process until you can pay cash for a new STi, or whatever the cool car happens to be in the future. You will save many thousands of dollars in the long run, because you will be earning interest on your money instead of paying interest to lenders.

And a final word on depreciation: It just isn't as big a factor as it used to be, especially if you buy a Subaru other makes that are holding their value well. It used to be that a brand new car would lose 20% of its value or more the minute you drove it off the dealer lot, but that just isn't happening anymore. Buying a car new isn't the "waste of money" it used to be.