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What's wrong with taking an 8 year loan for an asset that you will possess and use every day of those 8 years? As long as the interest rate is good (less than 4

by aianus 7y ago

What's wrong with taking an 8 year loan for an asset that you will possess and use every day of those 8 years? As long as the interest rate is good (less than 4%, say) it sounds like a prudent decision that frees up cash flow.

tonyedgecombe 7y ago
Most of them won't keep the car for 8 years, they will roll the loan over in a couple of years for the newest shiny object.
WA 7y ago
A car is not an asset, but a liability. It doesn't generate money, it costs money. If your 8-year-car is going to make you substantially more money than a cheap car that maybe doesn't require you to take a loan, you have a point. But since cars are about to go from A to B and the status symbol itself doesn't pay for anything, a cheaper car would do.
- nkrisc 7y ago
  Unless you consider the status utility worth paying for. Some people think it is. I think they're wrong, but who am I to say how they spend their money? Why do people by expensive clothes that are no better than clothes a fraction of the cost?
  - toomuchtodo 7y ago
    There’s evidence that people make decisions about others based on their clothing, even when directly informed not to during studies, so it appears there might be some utility in more expensive clothing. The appearance of status might beget more status. http://wws.princeton.edu/news-and-events/news/item/split-second-clothes-make-man-more-competent-eyes-others http://wws.princeton.edu/news-and-events/news/item/split-sec... https://news.ycombinator.com/item?id=21751445 https://news.ycombinator.com/item?id=21751445
mrep 7y ago
I'm with you. I bought my first car last year and while I had moved some money into my checking account and even got a few checks for the first time for the down payment, they offered me 0 down with 2.9% interest which I took without hesitation. At that rate, they are barely beating inflation and I just moved my money back into vanguard ETFs.

by aianus 7y ago

tonyedgecombe 7y ago

Most of them won't keep the car for 8 years, they will roll the loan over in a couple of years for the newest shiny object.

WA 7y ago

A car is not an asset, but a liability. It doesn't generate money, it costs money. If your 8-year-car is going to make you substantially more money than a cheap car that maybe doesn't require you to take a loan, you have a point. But since cars are about to go from A to B and the status symbol itself doesn't pay for anything, a cheaper car would do.

nkrisc 7y ago
Unless you consider the status utility worth paying for. Some people think it is. I think they're wrong, but who am I to say how they spend their money? Why do people by expensive clothes that are no better than clothes a fraction of the cost?
- toomuchtodo 7y ago
  There’s evidence that people make decisions about others based on their clothing, even when directly informed not to during studies, so it appears there might be some utility in more expensive clothing. The appearance of status might beget more status. http://wws.princeton.edu/news-and-events/news/item/split-second-clothes-make-man-more-competent-eyes-others http://wws.princeton.edu/news-and-events/news/item/split-sec... https://news.ycombinator.com/item?id=21751445 https://news.ycombinator.com/item?id=21751445

mrep 7y ago

I'm with you. I bought my first car last year and while I had moved some money into my checking account and even got a few checks for the first time for the down payment, they offered me 0 down with 2.9% interest which I took without hesitation. At that rate, they are barely beating inflation and I just moved my money back into vanguard ETFs.