Brav

Thank you for bringing common sense to the table

konigstiger

Guys who are you preaching to? Do you truly believe that the majority of MB owners do not normally practice the rationale you stated (some well before even YOU realized it), or are we just posturing?

Brav

Yes? :p

guitarplayer

Just got my first MBC invoice in the mail today. Whoopee! Yes, I did the right thing. I hid it from my wife. For some strange reason the MB invoice doesn't match the number I told her that I paid! Ooops.

silk32

wrote a check for $30k on the slk32. got $25k loan from my credit union at 3.79% back in 02. did the same with the 5 series i bought but got the interest at 2.9% and only took out a $10k loan.

had the slk paid off in about a 1yr and half. and the 5 series will be paid off in about 5 months or less..

once the 06 slk55 comes in .will put most of it on my AMEX card so i get miles and pay that off in one gulp

paulhu

I was going to put my 2004 E500 on AMEX card to get some frequent miles, but dealer said NO, they don't take credit cards for auto purchase(it's probably BS). I told dealer that their parts department sure takes credit cards, why not sales departmenr? No answer.... So I cashed in my CD, paid for the car, and lease the car back to my company at 6% interest per year. This sure beats putting CDs in the bank earning a lousy 2-4% interest per year.

guitarplayer

I am proud of you big cash payers!!!!! Don't make me start asking for income levels! Also, are your wives involved in you car decisions? If mine was I would be driving a Honda!

CE750

re-read the comments on this thread, there are many who like my wife, think that paying for something with cash somehow makes it smarter. A car, being a poor example of this (and I grant that this thread is about that).. But I get irritated when people make blanket comments that debt is bad, and that's who I'm preaching to.. since my wife will not budge on this subject, I can at least vent on this forum.. cool?

Spartan

Well......we have a difference of opinion.

The Chinese hit my factories very hard in the last few years, in fact, by last January, they cut into 80% of my business from what it was four years ago. By following a conservative philosophy, not only did I survive, but had the cash on hand to restructure and re-invest in equipment. I am not asking
nor care for any kudos, just brining up an example of my personal experience. I ask you this, how many companies could do that if we face a strong recession? In my "simple" opinion, in an increasing volatile world, far too many people and companies are taking a larger debt load.

I am not saying that "debt" is bad, in fact, in a rising market, it's the smartest thing to do. My "conservative philosophy" plainly sucks when it comes to taking advantage of such markets.

Oh well, we all live by our own rules.....

BenzVince

Ouch, that's why I don't want a new MB even a program car, cuz payment are too high for me, even if i have to put more than half of the cost of a down payment, I would be emptying my savings and my paycheck.

BenzKid24

By Check- $15k

CE750

well, that's a whole different story, and thread.. don't get me started on the Chinese. :v

I don't dispute your business ways by the way... it's just that I would not have the money I have today, if I didn't leverage myself.. so I guess it worked for me, but not for you. I can agree to disagree.

The bottom line is Assets-Debts=Networth, and Networth is King.. not Cash. IMHO

silk32

paulhu: i think you might be right about not being able to pay for a car with a AMEX card. I think AMEX takes like 1-2% per tranaction on the merchant side?

PaulX608

I bought a little pickup about three years ago, and tried to use plastic, and they said they could only put $2000 on my card, I had to finance the rest at a higher rate then my card. But I made double and triple payments and paid it off in no time.

E55AMG99

Credit card companies take as much as 4% in fees. No dealer wants to lose 4% on a margin that isn't much more than that.

guitarplayer

My daughter just let my wife and I know tonight that she was accepted to Med. school. This is killing me but my E320 I just bought 3 weeks ago must go. I need my cash back. I just put it in the classifieds here. I just want to break even on the great deal I got. If anyone is interested please let me know. I don't even have my title back yet. Tough call but my daughter will come before any car, can always get another one later. Thanks

HELL ONA HARLEY

Hmmmm.... Anyway, my congrats to you your wife and especially your daughter.

adx

The problem with net worth is that it is only paper net worth until you can actually liquidate or leverage it. Cash and liquid investments are still it.

CE750

As far as credit cards... I paid $10000 down on my Volvo V70 back in 2001, to get airline miles, and the dealers didn't say a darn thing.. and I'm sure the BofA Airline Miles card takes a big percentage of the transaction..

ADX: The trick is to leverage, make equity, cash out, then you have the Cash/equivilants and it cost you nothing (effectively) and it was all done thru debt.

i.e. buy a bunch of houses at x, have them go up to 3x in value, and then cash out of them.. same for land, etc... but NO.. except for the house I live in.. I have never paid cash for a house or land, and if I had to.. I wouldn't have the investments I have today. Check your PM for how I did it.

adx

I agree since I am following that same concept here in Vegas.

CE750

yeah... you read my private message...we think the same way.

Leverage (if timed right) is a way to make free money, for the lack of a better word. And Leverage is nothing more than a fancy word for debt.

guitarplayer

Went to my dealer this morning, intro myself, nice talk with the sales mgr.

He told me something interesting. Said about 50% of their customers could afford any car on the lot without thinking twice. Said 30% were people who could afford what they bought but it was a stretch for them as they were more in the 28-40 age group that made good money but also have alot of responsibilities with young kids, big mortgage and really should buy a Toyota or Honda but feel the need to have this status in their driveway. And finally 20% were in the fake it till you make it group that were way over their heads.

Just found this interesting. Sounds about right.

CE750

or lets phrase it like this.... what percent of your net worth should your car(s) not exceed?

If you're worth 1M, can you spend 100,000? on cars? I would say that this would be a the max.. or 10%. I personally would prefer a lower percentage.

However, I know people (including a close friend) who spent as much on their car as the total net worth they have including their house. This to me is financially irresponsible.

guitarplayer

I've heard different people use different parameters for determining their net worth. Such as taking out the house (asset) and mortgage (liab.) out of the equasion. Their rational is they aren't going to sell their home pay off the loan and live nowhere in suspended whatever.

Using the total assets minus total liabilities I'm around 6%. I'm not counting assets like furniture or anything else. Just cash, stocks, 401K, home value, minus any debts (1 mortgage, 1 car loan).

Interesting concept. Where did you hear of this %?

CE750

It's just what I gave myself as a rule of thumb.. my cars cannot exceed 10% of my cash and liquid assets. I think many people do see it that way since they use monthly payments and cashflow as their basis for what they can afford. And over 84 months a $50K/yr job can swing an S class if they wanted to!