10-01-2013 07:45 AM
if you are unemployed for the time being and need a vehicle but dont want to dip into savings....a secured loan works? if you borrow 20k for 60 months with a dealership, you wont be able to sell the car for 20k at the end of the term. if you secure the note with your own savings you will be paying yourself back and at the end of the term will have your 20k liquid and the vehicle free and clear. all of this assuming you can spare 20k to be locked up for a bit....
why not just cut a check for the 20k?....then you are out 20k immediately and wont be able to get the 20k back. ever. you can sell the car but you will take a loss.
at least with a secure loan you can get your 20k back at the end of the term AND sell the vehicle if you wish. is this ass backwards logic??
10-01-2013 09:41 AM
Well assuming you can be without the money for whatever period then this is fine. You would still have the vehicle title from the beginning because the loan is secured by your own money. The loss would be in the interest paid for the loan less the interest earned on your funds. I would assume based on whatever vehicle you are looking at in this price range (especially used) that the interest on the secured loan would probably be less than the interest on a vehicle loan. The vehicle is still going to depreciate no matter how you do the financing so that is a wash.
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