Mark Doiron

If you mean that you're signing over your home or some other valuable property to secure this loan, absolutely do NOT do that! Here in the U.S. that would be something most folks think of us loan sharking. It is risky. The only property that should secure your loan is the vehicle itself. Period. No exceptions at all.

chez323

it's a labor of love, kinda like kids only more expensive. lol

2011oscarmike

Boy you must be great at saving money. Or you make a lot of it. Saving $40,000 to buy a jeep would take most of us forever. Vehicles are about as expensive as property these days.

Mr.T

If one can afford to make payments on a 40K car loan, one can afford to save close to that amount each month. Pay yourself that principal + interest and soon you're a cash buyer instead of a debt-slave. It's that simple.

As for me, I bought my Jeep used and paid cash. Drove $200 cars when I was a kid, and paid cash. Interest rates are a lot lower now than when I was young, so paying cash isn't as advantageous as it used to be. However, people tend to overspend when it's monthly payments compared to cash they have saved. And if there's a financial downturn (which nearly everyone will go through), not being able to make a payment and loosing the car will make it even worse.

2011oscarmike

I agree. Interest rates are lower especially if you are older. What they do to the young people with little to no credit is criminal IMO. Getting them in with high rates is setting them up to fail.

ronjenx

That's how I bought my second Jeep. Made the payments on the first one. Once payed off, I kept making that payment to a savings account for quite a few years. Paid cash for the second one.

icrashbikes

I'm keeping my Jeep forever obviously, but this is sound advice. I recently bought a Miata at 0% for 5 years. I have the full cash value of the car in a money market account to draw from if need be. I'm making every effort not to, but I can pull a payment out of that account any time I need to.

Mr.T

That's smart, and the way to use credit. You have the money (the most liquid asset) to cover the loan, plus the use of it in case of an emergency, and it's free (zero interest). My kids have done the exact same, although I think it was a fraction of a percent instead of zero interest.

Side note: The youngest bought a Subaru BRZ, similar to the Miata. He had to leave it (and the keys) at my place for a few months right after he bought it -- Sports cars sure are fun!

icrashbikes

Thanks!

And yes, I've been without something to hot rod around in for so long and it's a whole facet of driving that I forgot I absolutely love. I have two track days coming up and I'm having a blast in that little go kart.

Mr.T

Track days, cool! One of my kids has a super-charged mini cooper (2005) that he has tracked a few times. The one with the BRZ recently bought a turbo-charged '91 MR2 for a project and track car; he's rebuilding the turbo at the moment. Must be genetic, anything with wheels is fun...

BTW, my youngest is almost 30 and I've got grandkids now. It's funny how the term "kids" just doesn't leave my vocabulary... Probably related to not wanting to think I'm getting older.