Hot answers tagged

170

As a frame challenge to your question, consider that a deposit in your bank is essentially you giving a loan to the bank. Now the bank has money which they can loan to your friend! Yes, you're only making 2% by loaning money to the bank, but this way, the fact that you're only earning 2% is essentially you allowing the bank to keep a portion of the interest ...


113

You are talking about spending about a third of all your money on a car and committing to do so for the next 4 years. As an 18 year-old you have a tidy disposable income and few expenses. But the one thing that is certain is that your circumstances will change, even over the next 4 years. It is a terrible idea. As a simple example, you could: a) buy ...


108

It's 100% a scam. I help with unresolved cases on PeopleClaim a lot and saw several that are very similar to this. Here's how it works: you send your money by wire or gift card or similar to the "neutral third party" that supposedly holds the car. They may even have a nice website with legitimate DOT numbers (that just happen to belong to a different company)...


97

The registration (title too, right?) is in your name, the car is yours. You need to decide how to politely tell her this.


80

There are two ways to improve your personal finances: Make more money Spend less money That's literally the secret. To afford the car, you either need more income, or lower expenses. Don't fret, though. It's good that you are learning this lesson early in life because a lot of people live paycheck-to-paycheck their entire lives without realizing that some ...


70

A few points. You may be interested in this website which helps you calculate the total cost of car ownership, and factors in things like insurance, gas, mileage, repairs, registration, etc... These costs are not inconsequential and have a tendency to add up. Even this calculator doesn't consider all the costs though because it ignores the lost opportunity ...


67

"Her solution to the problem is to take my car" - i.e. THEFT. If you are on the title, it is your car. A cosigner has no right to the item purchased - all he did was guarantee the loan in case the signer does not pay. Anything between the signer and the cosigner is a civil matter (i.e. the cosigner could ask for damages if the signer does not pay). But the ...


60

Since this hit HNQ, I'll move this warning to the top to make sure everyone sees it: Do not buy more car than you can afford. Figure out how much you're willing to spend ahead of time—make sure you include tax/title/license fees, insurance, and a fund for emergency repairs—and don't go above that. Even if that means you can't get the luxury car, have to get ...


60

The car is yours, your name is on the title, and you are insuring it based on you being the driver (not her). You are responsible for parking tickets and toll evasion. Any arrangement you might do must account for these facts. Legally, you don't have to give her the car, and can report it stolen if she takes it. Socially, if your family is close enough ...


54

Personal experience- I did the math. I had enough. I bought the car. I LOVED that car. I had FUN. Nothing went wrong. I paid everything I had to as it was due. Luck was on my side. At the end of 5 years it was paid off. I had a 5 year old car. My buddy had a similar job paying about 10% less. He didn't buy the car. Instead, he bought a cheap ...


52

The dealer makes money on the loan. The amount depends on the relationship between the dealer and the finance company. Basically, you getting a loan increases the dealer's commission and so you can indeed negotiate a lower price. The dealer may also have incentives to close x number of loans per month, so he could have additional motivations. He's probably ...


51

$160 a month is less than $40 a week (except in February when it can be exactly $40 a week). At the Ohio minimum wage of $8.55 an hour, you should have something like $8 an hour left after FICA taxes (and not pay income tax until working more than twenty hours a week). That's only five hours a week. Five hours is a single shift, not even a full day (eight ...


50

This is clearly a scam - and it's a fairly common one. The answer posted by George explains the mechanism: they will ask you to submit payment to a "safe" third party agent (really just the scammer pretending to be such an agent) via a non-refundable method like gift cards or Western Union, and then they'll either vanish, or they'll string you along for more ...


45

To secure the loan, would it be possible to take the car as a collateral? Yes it is possible. But to do this you have to create a lien, which is a legal document, and you would need a lawyer to do it. With the lien: A) yes you stop him selling the car B) Yes this will be registered C) Yes you can take the car back. Without the lien the answer to all of ...


42

CC debt is My Hair Is On Fire!! debt, because the interest rate is so high. So... yes, you should pay that off first (unless you like subsidizing my 1.5% Cash Back Rewards and "Fat Cat Bankers" while slowly impoverishing yourself).


40

No doubt about it: vehicles are capital expenditures which depreciate over time. Referring to a car as "a good investment" because it hasn't depreciated very much is metaphorical. Having said that, the exception that proves the rule are low-supply, high-demand antique and specialty cars.


38

The answer, of course, is "no" to the Audi. But you already knew that. I applaud your willingness to ask the question. Here is a decent article: Opinion: The road to riches is this simple: Drive a crappy car


24

About your mental health, I trust that you are seeking professional help about that as others have mentioned. My answer is here to help you with the financial part of your question, which should (hopefully) alleviate some of the stress you're experiencing that comes from debt. It's great that you're looking at your expenses and thinking about how to ...


23

Buy for your friend a cheap and reasonably reliable used car. You can get such car for less than you would spend on lawyers to write a contract for the loan in your inquiry (so you and your friend are already ahead financially - because otherwise this cost would have to be added to the loan your friend would have to finance, and you risk to lose). If he ...


21

Beware confirmation bias I have been reading a lot and doing as much research as I could and need some help to decide whether I could consider the action of buying a car as an investment. Oh, you have to be very careful here, of confirmation bias. Deciding which conclusion you want to reach, and then searching for the facts that support reaching that ...


21

Remember who you're asking: Personal Finance and Money. Many of us are older (meaning "parents"), and financially conservative (meaning "live below your means" and "don't spend a lot on a car until you have a healthy net worth".) What would your opinion on this be Were I your age, making your amount of money, I'd also want something shiny, fast and new. ...


20

You're asking several related questions - about credit scores, how to use cash, and how to buy a vehicle. If we break them all down and start with what to do with your $5k in cash - it makes sense to use that to pay down credit card debt, since it's likely costing you an arm and a leg in interest right now. Even if you decide you need a vehicle badly, and ...


18

There is similar question By 18 years of age, I want a brand new car that's $43,668 But because of the deposit and young age I think it deserve new answer so more people can use it. Your whole plan is based on two assumptions: you're not spending a lot of money on bills your work situation is stable. So let's go through basic calculations. You're ...


16

This is almost certainly not a scam. This is the seller trying to avoid any chance of you scamming him, with for instance a fake transfer. While I don't know details of Canadian motor vehicle laws, in the US such a cash transaction would be the normal way to handle a sale between private parties where there's no outstanding vehicle loan. FWIW, the only ...


15

Simple answer is: they are luxury cars. Safety - at least in Europe you do not really get unsafe cars. Too much competition. Not getting full stars gets you kicked in the a** by consumers. Fuel Economy? Hate to tell you but the 3 liter engine in my SUV eats more fuel than the small engine in a lower end car (currently average this year 8.4 liter diesel per ...


15

I have read that paying in cash can actually put you at a disadvantage, because dealers want to be able to sell you a car loan on top of the car. Every time I've purchased a car, the purchase price is set and agreed upon before I step into the finance office (meaning they don't know if I'm going to finance or pay cash yet). With a fixed price, once you step ...


14

A car that has had major repairs done is going to have a much lower resale value than a non-damaged car. The reason for this is mechanical, so I'll defer to someone on the auto mechanics stack for more detail, but in general a future buyer would assume that if you had to have $16,500 in repairs done, no matter how well those repairs were done, there would ...


14

Simple. Do not buy that newish vehicle, and do not even try to obtain finance. Instead, buy an older vehicle (of a reliable manufacturer like Honda or Toyota) for whatever cash you have - or even less. Drive it until either your financial situation improves, or it breaks. While I don't know the Australian used-car market, in the US you can easily find ...


13

First, ask the company who claims you are a cosigner to forward a copy of the document showing your handwritten signature (A: to verify you didn't actually sign it, and B: so you have evidence of ID theft). If they can't, write them a letter, return receipt requested, you are not liable until they provide proof (and maintain a copy for your records plus ...


12

I think you may have a fundamental misunderstanding of how insurance works and the value of it (assuming you are in the US). The Government doesn't pay out insurance claims from private insurers. It is also decidedly not a scam, but rather a way to buy down financial risk. Every state has guidelines for the minimum level of insurance you must carry to drive ...


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