[Segments]

Hey guys, getting pretty close to purchasing my first E90. The E46 has been listed, and soon I will be in my new car. Now, my question is, I'm going to be spending around 15k on the car; is it a better idea, being an 18 year old kid, to spend the money in cash, or finance ? I feel as if financing will benefit me greatly as I will build credit, but may I end up paying a lot more even if I do say a 12 month payment plan? On the other hand, I pay the 15k or so in cash, but have to wait a bit longer to once again have comfortable cash to think about modding or anything of that sort. Please, help out with any thoughts...Thanks so much guys.

[e92_enthusiast_1]

I forgot what the term is called but if you can afford to finance its better for the exact reason you mentioned. If the finance rate isn't ridiculous that is.

[Segments]

Originally Posted by e92_enthusiast_1

I forgot what the term is called but if you can afford to finance its better for the exact reason you mentioned. If the finance rate isn't ridiculous that is.

Yeah, I just honestly need some of the finance lingo to be cleared up for me. But my plan would be to put down 8,000, and pay off the rest fairly quickly, as I will keep the money aside. This way I can do a few things right away rather than wait.

[E92TTCoupe]

It's 50/50 here. One being that if you're able to wait a bit longer and have the car paid off for you don't have to worry about monthly payments or anything in that nature. You'll always have money for a rainy day or car maintenance. Banks love to charge ridiculous interest rates and being that I'm assuming your taking out a loan on your own the rate will be sky rocket yet alone insurance being 18. And I see your in NY too it's not worth it. Good logic of building credit but there's other ways of doing so. Credit cards take a little loan out as in maybe 5k? And build off that way. Start off small and work your way up. Do you have established credit? Would you get a Co signer? A lot plays a factor when making decisions like this. I say wait it off till you have saved the 15k and you'll have a piece of mind.

[Segments]

Originally Posted by E92TTCoupe

It's 50/50 here. One being that if you're able to wait a bit longer and have the car paid off for you don't have to worry about monthly payments or anything in that nature. You'll always have money for a rainy day or car maintenance. Banks love to charge ridiculous interest rates and being that I'm assuming your taking out a loan on your own the rate will be sky rocket yet alone insurance being 18. And I see your in NY too it's not worth it. Good logic of building credit but there's other ways of doing so. Credit cards take a little loan out as in maybe 5k? And build off that way. Start off small and work your way up. Do you have established credit? Would you get a Co signer? A lot plays a factor when making decisions like this. I say wait it off till you have saved the 15k and you'll have a piece of mind.

Ok, I appreciate it. To be honest with you guys, after I dump the 325i, I'll have 15k+ to spend in pocket anyways. Just thinking towards the future with the whole credit thing, but I'll have solid money anyways to perform immediate maintenance, but will definitely wait on mods. (Only exterior) Thanks a lot.

[E92TTCoupe]

Originally Posted by Segments

Ok, I appreciate it. To be honest with you guys, after I dump the 325i, I'll have 15k+ to spend in pocket anyways. Just thinking towards the future with the whole credit thing, but I'll have solid money anyways to perform immediate maintenance, but will definitely wait on mods. (Only exterior) Thanks a lot.

And I cannot blame you for that. Good thing you are because most 18 year olds don't. Credit is very important but like I mentioned start off small credit card cell phone under your name etc all that builds later on. Once your 21 you'll be set.

[e92_enthusiast_1]

Yeah, no monthly payment is pretty bomb though. Helps me out a ton.

[Segments]

Sounds good, needed to hear this from the people who know most haha. Thanks guys.

[sjf430]

If you can wait it out then pay in cash, another benefit is by the time you save up for it the price of the would have depreciated further , maybe 1-2k and put that towards mods, instead of getting a loan, paying the bank maybe 1k in interist and 1-2 k more for the car. Not to mention not having to worry about monthly payments, if something breaks u will have money for it etc etc, that was my logic, either way congrats on the upcoming car!

[Boxtyp3]

For the money that you'll loose on financing with the credit that you might be building vs no monthly payments? I'll gonna have to go with no monthly. Plus, you're 18, how much credit do you need anyways? You can slowly build it up along the way. I think the important thing with building credit is paying off your monthly credit card bill once you get it. Ofcourse this is just my $0.01.

[Segments]

Really do appreciate the input guys; the one thing I needed cleared up was the impact of interest at my age, and you guys nailed it. Thanks a lot, I will wait another few weeks before I pull the trigger, and will hopefully end up with a solid car! See you guys soon with my new E90!

[Delta0311]

Originally Posted by Segments

Really do appreciate the input guys; the one thing I needed cleared up was the impact of interest at my age, and you guys nailed it. Thanks a lot, I will wait another few weeks before I pull the trigger, and will hopefully end up with a solid car! See you guys soon with my new E90!

What exactly are you buying and how many miles on it?

[Segments]

Ok, it's most likely going to be a 328i / xi coupe from 07-09. Hoping to get one with around 75k-90k on it.

[sjf430]

Solid choice, can't go wrong, if it matters idrive on those years suck so DW too much about it, I use Google maps, might save a bit there

[///Maria]

No bank will finance 15K @ a low rate if you don't have some sort of credit already established. Or i you do have a credit card and for example its a limit of $500.00. Low limit card won't cut it on a purchase of a car worth 30 times of your max trade line. A bank will look at age, time of your trade line, your job/income and determine your DTI. On the other hand it may be a good idea to put around half down on your car to lower your interest rate, and a bank will be more likely to look at your loan if the retail value is 15K on your car and wholesale value in running condition around 9-10K. They will finance 7.5K 85% of the time depending on a few factors. If you belly up on the loan, they know they will be able to clear up the bad note by wholesaling the car at the auction. Good Luck.

[Longdoggy]

Depending on your monthly net income and reliability/frequency of paychecks, a loan maybe very well possible. You will probably have to put more than 50% down.
If you can get a loan for <6%, put 10k down, finance 5k, put 3k into a mutual fund paying >10% average annual return over past 10 years with reinvestment of dividends, save 2k cash for incidentals, maintenance, gas, mods or to make up a month of car payment if your in between jobs.

You'll thank me in 40 years.

[RoamPT]

The dealer will cut you a better deal if you finance it instead of cash, because if you finance it they will make more money.

[Spectre]

Originally Posted by e92_enthusiast_1

Yeah, no monthly payment is pretty bomb though. Helps me out a ton.

THIS.

I paid cash for mine because monthly payments gets annoying after awhile, even if you have the money, Trust me. Plus, its easier to haggle with cold hard cash giving you better negotiating tools.

[Mahmood]

Get a loan instead if possible, finance is linked to the car while loan is not unless the terms mean different in NY.

Having a loan/finance also means you have the money in your account for emergencies. Personal opinion of course.

[Efthreeoh]

Pay cash of the car. Get a credit card, use it just for the mods you want and then pay off the credit card in just a few payments. It will cost you a little bit in interest (but not as much as a $7K auto loan), but you will then establish some credit. You'll probably be buying the mods on-line anyway and will need a credit card for the purchases.

[westech8383]

Originally Posted by Segments

Hey guys, getting pretty close to purchasing my first E90. The E46 has been listed, and soon I will be in my new car. Now, my question is, I'm going to be spending around 15k on the car; is it a better idea, being an 18 year old kid, to spend the money in cash, or finance ? I feel as if financing will benefit me greatly as I will build credit, but may I end up paying a lot more even if I do say a 12 month payment plan? On the other hand, I pay the 15k or so in cash, but have to wait a bit longer to once again have comfortable cash to think about modding or anything of that sort. Please, help out with any thoughts...Thanks so much guys.

Building a clean credit rating is worth the effort. IMHO putting a sizable chunk down and financing a much smaller amount, say 3-4 thousand, for a short term works to your benefit. Builds the credit rating, monthly payments are relatively small and financial institutes are more likely to finance the lower amount for a person your age. Credit unions are easier to deal with than mega-banks.

Good luck...you'll love the E90.....getting a manual, right?

[Greatdane84]

Originally Posted by Efthreeoh

Pay cash of the car. Get a credit card, use it just for the mods you want and then pay off the credit card in just a few payments. It will cost you a little bit in interest (but not as much as a $7K auto loan), but you will then establish some credit. You'll probably be buying the mods on-line anyway and will need a credit card for the purchases.

Best answer so far.

Everyone has made great points here but getting a loan for an older vehicle usually tends to be a higher rate (5+yrs) and finding someone to do a 12month term will be impossible. Haggling with cash is better for you. When you try to haggle around financing usually the dealer wins.

Also I read a earlier post about paying the CC in full each month. Well that doesn't help your credit one bit. Creditors want to see steady, on time payments so either get a credit card for mods and pay it down to less than $100 each month or my suggestion would be to get a credit card that gives you a 1%-3% back on gas and pay that card down to $50 or less each month! Congrats on having that kind of cash at 18.

I just watched my brother-in-law who's around your age shoot off $750 in fireworks last night lol