Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Short term financing car
Old 06-12-2017, 04:32 PM   #1
Recycles dryer sheets
Join Date: Oct 2016
Posts: 102
Short term financing car

Darn! I was trying to push my 15 year old car for 2-3 more months awaiting the sale of my Mom's old house. It died, and now I have to get a car and use financing (I really wanted to come in with cash in hand this time!) However, I will pay it off in 2-3 months, so does it really matter where I get the financing? I know the dealer isn't the best choice, but what could it mean, $50? I don't think I want to run around shopping for financing when it's only for 2 months! Should I go for a short or long term in this situation? I'll have enough money to use as a down payment to look substantial.

This car may be the last car I buy! I'm going to make sure i like it. This is part of all the milestone events happening in my final year of work.

Pellice is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 06-12-2017, 04:42 PM   #2
Walt34's Avatar
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 17,414
In this low-rate environment if it is for a short time it probably won't be worthwhile to spend a lot of time trying to scrape off the last fraction of a percentage off the interest rate. I'd ask the dealer what their interest rate is, telling them ahead of time that you're going to check with a few other places (bank, credit union, etc.) to give them an incentive to lower their rate.

Back in 1985 I financed a new pickup truck. (In hindsight not the smartest move, but hindsight is 20/20.) I had asked the salesman what their interest rate was and he said something like 15%, so I financed through the credit union at 12%. When I picked up the truck the finance guy said "We could have got you 4%".

Well, ya should've said so the first time. Maybe they could have, maybe not, but I kept the loan at the C.U. because I trusted them more.

I heard the call to do nothing. So I answered it.
Walt34 is offline   Reply With Quote
Old 06-12-2017, 04:49 PM   #3
Thinks s/he gets paid by the post
Join Date: Mar 2017
Location: New York City
Posts: 2,838
my state (NY) has a provision of no early pay off penalty, its the law.. Not all states have that. So first ensure you live in a early payoff no penalty state. We tried to buy a car all cash. We got a better deal by financing the car, then when we got the first bill/statement we went to chase bank (the dealership arraigned the loan with them) and paid it off. Cost us about 53 dollars in interest and there were NO bank fees and all that loan fee stuff in the initial loan agreement. i think we saved 1300 bucks off the cash price.

There are a couple of different ways a lender imposes a prepayment penalty. One type is very direct, and therefore easy to identify if you are aware of its existence and examine loan documents carefully. These are percentage penalties, in which the borrower is charged a certain percentage of the balance remaining on the loan if he or she pays it off early. The amount of the penalty, therefore, would be lower the longer you've had the loan.

These penalties are allowed in 36 states, although they are prohibited around the U.S. for loans longer than 61 months (over 5 years). These penalties must be disclosed in the loan documents, in accordance with truth in lending practices, so read your loan documents carefully and refuse to sign any loan that includes a prepayment penalty. Watch carefully for any of these phrases in the loan documents: prepayment penalties, pre-computed loan, full amount of interest.
Withdrawal Rate currently zero, Pension 137 % of our spending, Wasted 5 years of my prime working extra for a safe withdrawal rate. I can live like a King for a year, or a Prince for the rest of my life. I will stay on topic, I will stay on topic, I will stay on topic
Blue Collar Guy is offline   Reply With Quote
Old 06-13-2017, 03:08 AM   #4
Recycles dryer sheets
Join Date: Oct 2016
Posts: 102
Thanks for this advice! My car died on the first day I had declared a "pre-retirement holiday" as I start to work off an extra year's worth of vacation days in the final year. Oh, well.
Pellice is offline   Reply With Quote
Old 06-13-2017, 09:55 AM   #5
Thinks s/he gets paid by the post
38Chevy454's Avatar
Join Date: Sep 2013
Location: Cincinnati, OH
Posts: 1,695
I think it works fine, and as stated the difference in rate with car rates being low now makes it almost negligible. Also, just because a state allows the pre-payment penalty mentioned, does not mean the specific lender you use has that rule. Just check the loan docs over to ensure no issues with pre-payment in full after 1-2 months.
After Monday & Tuesday even the calendar says, W-T-F...

Semi-Retired 7/1/16: working part-time (60%) for now [4/24/17 changed to 80%]
Retired Aug 2, 2017; age 53
38Chevy454 is offline   Reply With Quote
Old 06-13-2017, 10:12 AM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: May 2005
Posts: 13,870
Dealers are not the worst... they have the named company financial arm that can give a great rate...

Also, sometimes they get a kickback if they get a loan and will give you some of it...

BUT, another option is to just rent a car for 2 or so months.... they are cheaper than the daily rate with long term rents...

Texas Proud is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
Long Term Asset Allocation for the Short Term? Dwhit FIRE and Money 10 08-23-2014 09:12 PM
Work dilema regarding Megacorp request to plan long term when I only have short term Al in Ohio FIRE and Money 32 07-05-2013 03:10 PM
Short term vs Long term Bonds bank5 Stock Picking and Market Strategy 17 03-24-2009 03:40 PM
Short Term vs. Intermd Term Bonds TromboneAl FIRE and Money 35 07-21-2006 07:58 AM
Financing a car/car buying advice usc_et Young Dreamers 14 11-01-2005 10:59 AM


All times are GMT -6. The time now is 06:13 AM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2018, vBulletin Solutions, Inc.