Reply to My new car payment is $1,000

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Reply to "My new car payment is $1,000"

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[quote=Anonymous]Here is the advice you requested.

If you have the cash to payoff the car, put it into T Bills which are paying around 4%.  Use the interest off the bonds to help make your payments for the car.  Thus, you will actually end up paying less for the car then if you had put down cash.  Time Value of money and you are making 4% while only paying 1.9%.  Only do this if you can agree to the following three things:

1. The $1,000 car payment does not blow your budget  
2. You are not planning on selling the car in the next couple of years since you will probably be underwater on the loan.  
3. Mentally you can handle paying $1,000/month for your car.

The object to decide whether to pay something off is dependent upon whether you can make more off investing the money than the interest rate you are paying for the loan.

The average car these days is $48K for a regular car and $68K for a luxury car.  Fifteen percent of all new car loans are over $1,000/month. Nothing you have done is abnormal.  Enjoy the now 1 1/2 year old car since the post is old![/quote]

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