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Country Discussion Topics
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New car purchases
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JF    Posted 02-17-2004 at 12:28:19       [Reply]  [No Email]
Very interesting article on Yahoo today. Stated that 40% of all trade ins are worth less than the amount owed on them. Banks are now fianacing 101% of purchase. The average transcaction is 26000. Down payments are at an all time low of 3-5%, was 15% only in 1995. Average life of new car loan 63 months. Household debt rose 11% in 2003 mainly with bigger mortgages( average mortgage is now 700 dollars) through low interest. Average new car payment is now 400 a month. These were all facts as printed from Yahoo. Editorial------One must wonder how much longer before the dam burst. 2003 had more bankruptcies than any previous year. The slow economic growth in this country may be contributed to a lack of disposable income in the average household. Consumers obtained low payments for prolonged periods of time to purchase large items and now the roosters are coming home to roost. Oh well none for me. No mortgage, no car payment, no loans, just a feeling of fiancial contentment.

tammy dease    Posted 02-10-2005 at 13:41:51       [Reply]  [Send Email]

look for navigtor.

Les..fortunate    Posted 02-17-2004 at 17:33:03       [Reply]  [No Email]
Let's see: no car payments, no mortgage payment, no credit card debt. Sounds like I'm not keeping up with the Joneses and doing my part to keep this economy going. ";^)
I bought one new car in my life. Never again. That was an '87 Mercury Topaz. What a waste. Not that it was a bad car. It was okay. But spending the money on new to me is a waste.

JF    Posted 02-18-2004 at 01:06:37       [Reply]  [No Email]
my dad always said don't worry about keeping up with the Jones you will meet them on the way back down. HA HA HA.

Very funny    Posted 02-18-2004 at 05:29:36       [Reply]  [No Email]
I will have to remember that one

Okie-Dokie    Posted 02-17-2004 at 15:29:37       [Reply]  [No Email]
We never, ever figured that buying a car or pick-up was and investment. We do buy our cars new, but the last one was a 1985 Nissan 4wd. Bought it in the fall of 84 and still driving it daily with just a few miles short of half a million. Hope it is the last vehicle we have to purchase.

Clipper    Posted 02-17-2004 at 14:35:17       [Reply]  [No Email]
No car payments credit card balances either....our house will be paid off in a few more fund for the 2 boys topped out 5 years ago....

When it comes to vehicles I always work the best deal that I can.... then show the Sales Manager the CASH to get an even better every time:^)

toolman    Posted 02-17-2004 at 12:39:24       [Reply]  [No Email]
i think personal debt is at an all time high, lack of disposable income ,low intrest rates,people living on credit cards, most are able to manage their payments now, but i hate to see what will happen if we return to the days of 17 to 20% intrest rates,lots of folks will loose everything including their homes.

Jf    Posted 02-17-2004 at 14:12:45       [Reply]  [No Email]
You have a good head on your shoulders.

T D in Tennessee    Posted 02-17-2004 at 13:21:10       [Reply]  [No Email]
response of an old timer. why would you pay for a car when you can get zero % interest. That is NO interest at all. Even if you are only earning 1% on your millions, that is more than zero.

magpie    Posted 02-17-2004 at 14:50:11       [Reply]  [No Email]
I think, and this is only my opinion, that anyone that offers a car to sell at o%intrest has the price inflated to cover their loss. I believe that many people are only concerned with the monthly payment. They havent thought about 5 years from now when the car starts to fall apart and they still owe a bundle on it. I never buy new, but I suspect that you could deal a o% intrest car down considerably with cash.

Clipper    Posted 02-17-2004 at 14:53:03       [Reply]  [No Email]
You can bet yer sweet patootie that technique works great for getting that price down and fast too....learned that from my fav Uncle who has been a GM Dealer for over 35 years....:^)

big fred    Posted 02-17-2004 at 12:58:03       [Reply]  [No Email]
Why would they lose their homes, unless they refinance at a much higher rate?

toolman    Posted 02-17-2004 at 15:44:20       [Reply]  [No Email]
fred, i know people who have bought new cars and refinaced their homes and added their cars to it , not smart but they wanted a new car, i also know people who have just bought homes and have 5 year renewal, and in the meantime they have gone out bougth all kinds of other stuff on credit, able to make the payments now but so close to being not able to if the intrest rates went up and their payments become higher they wouldn,t be able to manage and when their mortage comes up for renewal they certainly wouldn,t be able to manage a higher monthly mortage payment.but they live for the day or so they tell me,don,t worry about tomorrow it will take care of itself, not my way , i like to feel secure,even if i can,t have all the new toys.

big fred    Posted 02-17-2004 at 21:04:58       [Reply]  [No Email]
Mortgage comes up for renewal? I guess I don't understand. Do you mean if it was an adjustable rate mortgage? Seems like the rates are so low now that most folks would just get a fixed rate. (That said, I have an ARM on my second home, I'm hoping to sell it before the initial rate ends. Don't know how my wife will feel about that, though)

Burrhead    Posted 02-17-2004 at 21:49:51       [Reply]  [No Email]
If he's talking about the same renewals as the banks around here use it's like this.

You borrow whatever $ for a loan. They loan you the money and you pay back with 59 low monthly and then a huge final.

If you can't pay at least 50% of original amount borrowed as the final ballon payment they roll the final payment amount over for another 5 more years.

When they roll it over for you another 5 years then you pay the normal interest rate at the time plus another closing cost, land surveys, title % insurances, deed work, and legal fees that run from 5% to 10% of the final amount.

It is a fixed rate loan during each term, however the rate will adjust to current trends at each renewal.

If you live long enough to pay mortgae payments for 100-125 years then your all set with a renewable mortgage plan.

toolman    Posted 02-17-2004 at 21:27:01       [Reply]  [No Email]
maybe things are different between the two countries, i don,t know what a ARM is, here you can take out a mortage for 1 to around 25 years the shorter time you take it out for you get the best rates, most take it out for 5 years at a time and then they have to go in an renew it at the end of their 5 year term, if you have one now for say 4% and in 3 years from now the interest rates go up to say 10% your buggered if your spending power is all used up trying to pay off credit cards and stuff like that and the credit card rates go up too,thats what i meant when i said the low intrest rates of today have lured people into a postion where they live on credit and are able to make their payments now but if the intrest rates went back up to where they were a few years ago, their ability to pay would be in jeopardy.

big fred    Posted 02-17-2004 at 21:46:37       [Reply]  [No Email]
Interesting. An ARM is an adjustable rate mortgage. They start out with a low initial rate, which helps young families get payments they can afford. Then, depending on the specifics of the mortgage, there comes a time in 3, 5 or 7 years when the rate changes, usually gets higher, but that's spelled out in the mortgage contract. My ARM is (best I can recall) set after 5 years to change to whatever the T-bill rate is, plus some factor, I think it's 1.65% The maximum amount it can increase in any step is also set in the contract, mine is 2%, and lastly, the highest it can ever get is also in the contract, I think mine is 8.65% or something like that. My initial rate was 4.75% at a time when a 30 yr fixed woulda been around 6%. But there is no renewing, it's all set out in the contract at the start. Of course, you can re-finance, which involves getting an entirely new mortgage contract, and paying off the old one. If you do that, you generally gotta pay a finance charge up front and also spring for an appraisal.

Thanks for the explanation of the Canadian way, I wouldn't have expected differences between the U.S and Canada on mortgages, I learned something new.

toolman    Posted 02-17-2004 at 22:16:29       [Reply]  [No Email]
no as far as i know we don,t have anything like that here, wife usually handles all that stuff , but i would of heard of it if we had it, sounds like a better deal than we have, yes we can refinance too but you have to pay a bunch of charges appraisal is only one of them depending if you have waited untill your term was up or not, you could face a penality if it wasn,t, you can go thirty years here too but most don,t 20 to 25 mostly,your allowed to pay a percentage of your total yearly ,i think it 10%of what you owe without being penalized , they have alot of different plans and they vary from lender to lender and your best to shop around for the one that will give you the best deal, we ended our association with our long time TD toronto domion bank and went to the bank of nova scotia with our mortage last year and saved thousands of dollars two banks same town, we had savings chequing and retirement money with the TD and they wouldn,t give us a better rate walked down the street a block and got this deal. makes you wonder whos minding the store sometimes.keep getting letters from them asking us to bring our business back.

toolman    Posted 02-17-2004 at 22:42:51       [Reply]  [No Email]
Wife just got up and i showed her your post on that ARM, she said we have something kinda like that here called variable rate, but its not quite like what you decribed, she said as long as the rates go down less than what you signed for say in a 5 year term, your ok but if they go up then you end up paying more intrest and less on the principal during your term,i hope i got that right, but anyway it must not of been to favorable for us because she said she didn,t want that with ours.When buying a house there do you need a down payment? Here if in town i think you need 10% down and if its raw land in the country you need 25% down makes it hard for young folks just starting out to be able to save enough to own their own homes especially with the way housing prices are skyrocketing around here now.

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