Did you finance your Delorean?

[Rich_NYS]

I paid off the 2015 loan in 48 months, but that didn't seem to matter either.

I paid off my loan in 24 months....not 48. Short edit time here sucks.

[MrChocky]

There's another option for finance, which you might not have considered. None of this invalidates what has been said here,
and it's my personal opinion that for a car like this, you should at least pay *some* of it out savings to have some skin
in the game.

If any of what I suggest here seems like a gimmick, then it's probably not for you. But it's what I've done for my last
3 cars.

The following uses a number of assumptions and simplifications, which I'll leave as an exercise for readers to spot.

Let's say you find a perfect D for a mythical total price of 24K (we can also assume it's 1995 if you like). You work
out you can pay ~$500/month over 4 years, and peeking at today's car loan rates, let's assume 3.75% (compound
interest).

An amortization calculator comes up with $538.68/month for a total of $25,856.71. Ok, cool.

But what if you were to finance it with a credit card balance transfer offer? This requires that
you have:

* Excellent credit
* Several credit cards with *zero* balance and large limits
* Are on top of paying your bills, *always*.

Balance transfers offers vary a lot, but the good ones might be 2-3% (fixed interest) over 12 months. If you're
lucky, 18 months. Take a look at those slips that the companies endlessly send you. Very
occasionally on new cards, it's 0%.

So, again, $24k, plus the 2% = $24480.
After 12 months, you need to transfer again, with a balance of ~$18.5K with 2% = 18900
And once more, after 12 months = 12800 at 2% = ~13K
And finally for the last year, $6500 = $6630.

The total in interest is approximately $1200. So the amount you want to be paying each month
is actually $525.

Realistically, the alleged saving of $600 over 4 years probably isn't that meaningful giving inflation
and other factors. And there are some obvious downsides to this approach:

* You have to be on top of your payments, and you need to have lined up the next transfer ahead of time,
and set alarms in your calendar to do so.
* The amount the credit card companies require you to pay or the minimum payment, is anywhere from
1-3% of the balance depending. As the balance goes down, the amount they need you to pay is a smaller
and smaller amount compared to a traditional loan - so if you don't keep up paying this amount, you're screwed.
* Your credit score is going to take a big hit as you max out one of your cards.

There are however a couple of advantages:

* Less paperwork in loan establishment, and getting the money usually takes only a day or two max if it's
an existing offer.
* No ding to your credit score for hard credit inquiries (which last 2 years on your report) - assuming you aren't getting a new card
* You get the car title up front, rather than more paperwork at the end to get it passed over
* You have a degree of flexibility in how much you pay. For example, if you had an emergency and ended up having
to work on paying another card down.

Earlier this year, I had an emergency expense. I could have taken it out of savings, but it ended up (for me) making
sense to roll it into a transfer I was doing anyway.


This is obviously flame worth material, so post away.

[David T]

While this scheme is legal and possible, miss one payment and any potential savings is lost. A risky strategy with low potential gain, large possible loss. If you have to do this in the effort to save such a small amount you should rethink your reason for getting into debt in the first place. Try to save money elsewhere either by doing more work on the car yourself or trying to save money buying the parts.

[Rich_NYS]

I get the loan for convenience, and to avoid any "freak accidents" involving loss, theft, or civil asset forfeiture type things.
I pay the loan off super quick to avoid as much finance charge as possible.

For my recent [long distance] transaction, the sellers bank & mine were within 0.10 miles from each other so I had loan funds deposited to my account and we did a cash transaction at the banks. We also got the paperwork notarized at the same time.