Anyone good with car loans?

[T4R_Finally]

Yea. Thats not how it works at all. Banks and Credit Unions are not in the business of selling cars and if your car is repo'ed, it heads directly to the closet auction.

Some do, some don't. NCSECU always has a couple of cars on their lot that are repo's they have up for sale. Perhaps that's determined by what they need to get out of them vs. what they will fetch at auction. But, bottom line, this is the risk the institution takes and the potential price they pay if you don't pay. But it is NOT how they determine what they will loan you.

I would never in a million years take out a loan against my 401k. Taking a loan out against your retirement is up to you, but not worth it in my book. If you were to be injured or laid off and could not repay that loan, they will take that money from your retirement.

It's not right for everyone. And I would never take so much that it would be a problem if a catastrophic event occurred. You are correct, if you quit, get laid off, or lose your job for any other reason, the balance of the loan is deducted from your account and is considered and treated as an early withdrawal. I am fortunate to have good health and a good steady job that I don't intend to part from. This method has worked well for me for USED cars that cost a fraction of what a new one would cost and so I didn't take a fortune out that I can't afford to repay. As with any financial decision, one has to weigh the risks and benefits and make your own decision. This method allows me to hold the title to the vehicles, have more flexibility with regard to insurance, and I pay interest to me, not some bank. But it's just that - an option. I bought my 5th gen last year and the last thing I would have done is taken a $35k loan against my retirement. You have to figure out what you can handle in the worst case scenario, and stick with it.

As for book value. First off, there is 1 book. There are many, and the value of a car is dependent on the situation. I wasn't suggesting he didn't take a loan out, I was simply stating some issues that can come up. Also, when you see that industry standard is 7 years, there is a reason. Past that, a typical used vehicle no longer has enough value up to be able to recoup the cost in the event you default on the loan.

Yep, there is more than 1 book. But a financial institution typically subscribes to only 1 and use that as their "bible" to determine the value of vehicles and then determine what they can and will lend. But if the vehicle is older than their policies allow for, it doesn't matter what the book says - or what it would bring at auction for that matter.

More power to you if you are debt free. I'm getting closer to that every day. At least borrowing money from myself allows me to appear more debt free, on paper, than I actually am. But then, I borrow from myself and answer to myself - and possibly the IRS if something bad happens. But if I borrow $8000 and lose my job, I owe the IRS $800 and for me, I can handle that risk when weighed against the benefits. For most people, buying things like cars with cash is the way to go, but the majority can't afford to do that.