Car Loan vs. Cash - Ask Rich / Money 101

BumbleBeep · 07-23-2009, 01:48 PM

DF and I both have our own vehicles, however this year alone he's had to replace the engine, transmission, just broke his rear end.... We've gotten used parts for fairly cheap vs. having to purchase a new car. He wants to keep the car for long term as a project vehicle. After deployment with the money we've planned on getting him a good DD so we don't have to keep paying tons to just keep his vehicle rolling. Currently I have great credit my score is 735 or something his on the other hand is in the high 500's. Now I have no idea how marriage is going to effect that but either way he needs to get his in much better shape.

He really hates financing and doesn't want to have to take out a loan. But I'm thinking if we were to put a large down payment on the new car and just put the rest of the money in an account so it's untouched and let the loan come out of there. It will be payed on time in full everytime, that this could help his credit score. Yes we would have to pay interest this way but i'm thinking it might be worth it. Does anyone know if this would really effect anything?

carolinagirll · 07-23-2009, 02:18 PM

Sounds like a good plan and you already know the pros and cons. PLUS it will help your credit.

*skittles* · 07-23-2009, 02:22 PM

Dh and I have the cash to pay off his car loan right now, but his credit was kinda shady so we're going to make payments on the car for one year and then pay it off in full.

I think a lot depends on the interest rate you get too. Ours was about 4.9% and we are keeping the cash for our car in a money market thats maybe making 3% interest. We're still losing money...but for us it was worth it.

instant_oatmeal · 07-23-2009, 03:21 PM

Having a loan and paying it on time will definitely help!

07-23-2009, 01:48 PM	#1 (permalink)
BumbleBeep That one looks feisty I'm going in! Join Date: Jun 2009 Location: His: 29 Palms, Mine:San Antonio Posts: 723 Classifieds: (0) Activity: 62% Longevity: 7%	Car Loan vs. Cash DF and I both have our own vehicles, however this year alone he's had to replace the engine, transmission, just broke his rear end.... We've gotten used parts for fairly cheap vs. having to purchase a new car. He wants to keep the car for long term as a project vehicle. After deployment with the money we've planned on getting him a good DD so we don't have to keep paying tons to just keep his vehicle rolling. Currently I have great credit my score is 735 or something his on the other hand is in the high 500's. Now I have no idea how marriage is going to effect that but either way he needs to get his in much better shape. He really hates financing and doesn't want to have to take out a loan. But I'm thinking if we were to put a large down payment on the new car and just put the rest of the money in an account so it's untouched and let the loan come out of there. It will be payed on time in full everytime, that this could help his credit score. Yes we would have to pay interest this way but i'm thinking it might be worth it. Does anyone know if this would really effect anything? __________________ Getting Married Dec. 22nd

07-23-2009, 02:18 PM	#2 (permalink)
carolinagirll Senior Member Join Date: Sep 2008 Posts: 2,676 Classifieds: (0) Activity: 44% Longevity: 19%	Sounds like a good plan and you already know the pros and cons. PLUS it will help your credit. __________________

07-23-2009, 03:21 PM	#4 (permalink)
instant_oatmeal Senior Member Join Date: Apr 2006 Posts: 12,600 Classifieds: (0) Activity: 60% Longevity: 61%	Having a loan and paying it on time will definitely help! __________________

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07-23-2009, 02:22 PM	#3 (permalink)
skittles MilitarySOS Jewel Join Date: Mar 2009 Location: Savannah, GA Posts: 2,495 Classifieds: (0) Activity: 92% Longevity: 11%	Dh and I have the cash to pay off his car loan right now, but his credit was kinda shady so we're going to make payments on the car for one year and then pay it off in full. I think a lot depends on the interest rate you get too. Ours was about 4.9% and we are keeping the cash for our car in a money market thats maybe making 3% interest. We're still losing money...but for us it was worth it.