Advice on 84 month loan please

Andy77 · ‎07-10-2015

I wanted to get some advice. I want to buy a CPO 2014 Mercedes C63 and I plan on keeping this car for a long time 10 years or so.

the car with tax title and liceses is 70k ...I am going to put down 25k so I will borrow roughly 45k

In this case where I am going into the car with quity, is an 84 month loan ok ?

I would like my monthly payments to be as low as possible...

Thank you for your feedback!!!

CH-7-Mission-Accomplished · ‎07-10-2015

Remember that high end luxury cars depreciate the fastest!

I found this little article on one of the car sites. I have read this before:

New cars depreciate about 20% the moment you drive them off the lot. The second and third year the vehicle will probably depreciate roughly 15% a year. After year five, depreciation rates slow down. There are websites such as MoneyZine that offer a car depreciation calculator.

Now that I am a newly recovering debt addict, my feeling is that people should figure out what a "reasonable" car is based on their income.

Then put 20% down.

Then finance it over no more than 5 years.

If the cost of the car is more than a reasonable, "essential" car price, they should treat it as a luxury, something you don't buy on credit, and pay cash for that amount.

(I know, Who made you Dave Ramsey! LOL. I just think it's good conservative advice)

But this is just a personal goal. I also believe in buying a car at least three years old.

But I know that is not for everyone, just my own thinking.

Good for you for putting 25K down.

Andy77 · ‎07-10-2015

That is very smart thinking. I have the cash to pay for it in full, but I would rather invest that cash and get a return on it. That return is more then the interest I would pay, over the long haul.

However your logic of thinking is very good

Thank you

Anonymous · ‎07-10-2015

A CPO C63 is indeed an extraordinary automobile! Far beyond being called 'transportation'.

I dont own one, but I am a huge fan of the Mercedes AMG marque.

First, I'd recommend verifying the insurance rate, and I would keep a slush fund in the event your car attracts law enforcement attention.

Second, a well maintained Mercedes will last a really long time. My neighbor has a 94 e500 with over 200k miles that still runs and drives great. It was a special model jointly built between Mercedes and Porsche and was largely hand built, with Porsche doing the suspension and some performance mods and it was done before AMG really came along. It was transported back and forth between the two factories multiple times before completion. That car still runs great and looks great and is still relatively fast, but when it breaks, it is very expensive. It is stock and it still turns heads today.

So IMHO, if you can afford it, insure it, and maintain it, go for it! 84 months is a long time but unless you really abuse it, the car will still be there.

I just checked the Kelly Blue Book value for a used 2004 C32 AMG and it is still close to 10k, selling to a private party in 'good' condition.

And when you get ready to sell it, please give me first rights of refusal!

hth

Anonymous · ‎07-11-2015

84 and even 96 month loans are becoming more common these days, I follow the industry and the lenders have gone to them because cars have more usable life and of course customers can afford to borrow more. If you have the cash to buy the car outright I would not, a buddy of mine just dropped 70k on a 911 and really regrets not taking a 60-72 month loan because he can earn more on an investment than he would pay interest. I would consider a shorter term because everthing I have read is you will likely pay 2 points more for 84 months versus 72 so the difference in payment is not likely going to be that much.

joedtx · ‎07-11-2015

@Andy77 wrote:

I wanted to get some advice. I want to buy a CPO 2014 Mercedes C63 and I plan on keeping this car for a long time 10 years or so.

the car with tax title and liceses is 70k ...I am going to put down 25k so I will borrow roughly 45k

In this case where I am going into the car with quity, is an 84 month loan ok ?

I would like my monthly payments to be as low as possible...

Thank you for your feedback!!!

Several thoughs came to mind based on your criteria. Firstly congrats on clearly defining which vehicle is the perfect match, if you're not in love with every aspect of it you won't keep it very long which ends up becoming a financially negative scenario with that in mind have you considered expanding your search since you do have a specific criteria I would recommend a regional search don't be afraid to look far beyond your area. This is a premium auto and you might be surpised how competative pricing can be. Let's say you find the same CPO or even a NON CPO but priced at 65k or even 63K and don't forget there are also bank owned/ lease returns as well these are corporate and direct lease returns which is not unusual for the premium car lines you have options.

Don't let a dealer determine what is best for you, an extended warranty by both Mercedes and third parties are out there to give you added protection for added security. When you spend this amount as well as plan on keeping it for an extended period all factors must be considered. Good luck with your decision and to touch on the 84 month question, well if you find a more competative price well the 84 mth question may no longer be a question as you would be dealing with lower amounts which logically would result in a lower term.

All the best

Anonymous · ‎07-12-2015

Wha? 84 mo loan on a AMG C63? I surely can't recommend that! Why? Because it's an AMG! Now if we were talking BMW M3, it'll be a different story!

Just kidding. The AMG C63 is a fine vehicle. But some thoughts:

The C63, W204 chassis, was just recently updated to the W205. And you're buying the car for $70k OTD which means ~ $66k+fees? That seems awefully high for a USED W204 AMG C63. A brand new and newly redesigned W205 AMG C63 starts at $63,900 and a brand new and newly redesigned F8x BMW M3 starts at $62,000. Sure you never buy a European vehicle at base price, but if you're at all concerned about value and resale in case plan "A" doesn't work and you need to sell, measuring the used cars price against a new cars price is one of the ways how private party buyers and dealers value a car. Kelley Blue Book may say $66k is a fair price for the vehicle today, but as more W205 AMG C63's are produced, and more W204 AMG C63's flood the used car market, values will plumet at a fast pace.

DeeBee78 · ‎07-14-2015

@CH-7-Mission-Accomplished wrote:
Remember that high end luxury cars depreciate the fastest!

You've never bought a KIA, lol. I bought a 2014 Forte for $20k back in April of 2013. It was worth $11k when I sold it in April of 2015. Excellent condition - less than 24k miles.