Can someone explain to me how financing a car works in regards to how much interest you're going to end up paying?

k
i know the industry pretty well (just not familiar with finance) and have seen people make close to half a million/year by owning a fleet of cars. you wouldn't believe how much these kind of cars go for in my state and city desu.

Ok smart guy if someone was willing to pay $8k a year to rent a used shitbox why wouldn't he just buy directly from the dealer?

I have no doubt owning a fleet of cars can be lucrative.

I just think user there is right. This one car is going to get rekt. Hell, even with a fleet your cars will all be trash in under a year. The profit is worth it if you have hundreds of them though. Just not so great if you only have one and it's not even under warranty and is already half worn out.

>8k a year
nah its alot more than that. 3x more than that desu. And im not going to explain it because it might start makin you think, back to your 9-5 phams.

not half worn out.
2016 sonata with 18k miles.

not bad. It might work. I usually pay about $400/week to rent that kind of cheeze.

if you can keep it running for a year and constantly rented you should be in great shape.

It's fucking retarded.

Why pay 2k on your CC?
Why pay 17% interest over 60 months?

Stop kidding yourself saying you can pay it off in 12 months if you can't even afford to pay for the deposit with your own money.

Buy a beater and build your credit score with your monthly purchases, putting yourself in the shit for a new car is just plain madness.

Son, this is a ridiculously horrible decision, and you are going to regret this for years. You are purchasing a car that you clearly cannot afford. Your description sounds exactly like the beginning of every horror story I've ever read on /r/legaladvice and /r/personalfinance. You're being conned by a used car salesman who's only job is to convince poor people to make bad financial decisions.

The average auto loan rate for a 60 month term if you had normal credit is 2.4 apr. You are paying 608% HIGHER than the normal rate. How this doesn't set off thousands of red flags inside your tiny brain is beyond my comprehension.

>infact will be making some income off of it, not much
Further evidence of your stupidity. You're going to risk that your renting the car covers the purchase of the car, while realizing that even in a best case scenario you're only making small income. That's called a bad risk/reward decision. And what are you going to do when the renter flakes, stops making payments, wrecks the car, or the car needs major maintenance. Kiss your rental income goodbye and kiss the repo man hello.

This being Veeky Forums, part of me hopes you do it, for the lulz. But since I have a soul I'm going to give you an honest piece of advice since you seem to have no intelligent guidance in your life: walk away.

his interest rate is pretty average for someone with no credit. Especially on a used car.

That doesn't change the fact that it's an awful rate, he should build his credit first, instead of throwing away money he doesn't have.

>he should build his credit first,
how do you propose he do that without taking out high interest rate loans?

Rhetorical question, I don't actually need an answer from you.

Buy his monthly expenses on his credit card and pay off at the end of each month, doesn't cost a penny.

I have a good credit rating and I've never taken out a retardedly high loan that I couldn't afford.

>That doesn't change the fact that it's an awful rate
Exactly. The lending industry isn't exactly know for their charitable treatment of first-time lenders and low-income buyers. It's a predatory industry, and it does you no good that lots of other people also fall prey.

I wrecked my beater and put 8 grand down on a 2015 jeep. My monthly payments are 258 on 16000 dollar loan. I'm happy I don't have to drive a piece of shit and 258 is easily made. I been paying 300 every month. Shits cash

Also 3.9% interest

Let's also not forget that our genius of an OP doesn't realize he's financing $10,000 not $8000. Putting $2000 on your credit card is the same as taking out a second high-interest loan.

Let's also not forget that out genius of an OP never mention shopping around for better loan rates or exploring better financing terms. He's apparently willing to take whatever the dealer shovels in his face, perhaps because its more convenient to get fucked over all in one stop.

Kids, this is a textbook example of what not to do.

op here
bought the car
fuck all of you to be honest, im making 20k a year for atleast 3 years on this car and only have to pay off 15k.
>cars going to get wrecked
no its not, there is a

also, this is my 2nd car that ive purchased within the past 2 months. im 23 years old. I make 2k a week with the job i currently have. this will only add another 20k a a year to my salary. So to the
>bought a car you clearly cant afford
i could afford to be your dad desu

I got 18% on my loan as well with shitty credit. I was 22 and had a default secured credit card, Comcast in collections thanks to my Dad, and an apartment lease in collections thanks to my Dad. My score was like 476 or something. I put $1K down on a $5,200 car.

>claims to make over $100,000 per year
>can't get auto loan better than 17%

because im a personal contractor with employment under 2 years. im pretty new in the credit world, and when it comes to loans, banks and lenders will not take your income seriously as a pc unless you have minimum 2 years of income history.
Although i wont tell you the details of my industry, because fuck you figure it out yourself, heres some sound advice to you and everyone reading this that you will find to be true in the future if any of you decide to make a living in the business world.
There will always be naysayers. It will come from every direction. Your friends, your family especially, even people you don't know. most people will doubt you, but if you have the right idea, and you KNOW its the right idea (how you come to that conclusion is your responsibility) you can only rely on your own conclusions to become successful.
its no surprise why the 99% are the 99%, you realize that its almost as if they believe their bullshit so much, that they unconsciously enslave themselves.

>no credit
>can't afford a 4k down payment
>doesn't know basic compound interest

You're never going to make it, desu :^)

>makes 2k/week
>can only put down 2k on a car

holy bait fucks, baitman

If you made $2K/week then wait a month and buy the car in cash.

But you can't because you're a lying, poorfag, 12-year-old cock-cucking faggot.

Go to some shitty, local credit union and get a 2-3% loan. Credit unions are so shit they give you the best deals on LOCs and mortgages.

>the car costs $12,000. Im putting $4,000 down (2k cash 2k on credit card)

fuuuuuuuuuuuuck what are you doing?

no, because that wont build my credit at all.
i have great income, but shit credit because im new, and in business its better to have good credit and a shit income than great income with shit credit.

>and in business its better to have good credit and a shit income than great income with shit credit.

Please leave and never come back. 17% is terrible. Putting half a down payment is terrible. All of this is terrible. OP save a couple of grand and buy a beater out right. Look for an old Toyota or Honda that's been taken care of, make sure they've done all preventive maintenance.

If you absolutely must finance go to a credit union where they won't fuck you so hard. NEVER FINANCE THROUGH A DEALER.

what credit union will finance with no credit with a rate better than 14-17%?

yeah you're fuckin retarded desu. hows that 9-5? :^)

>in business its better to have good credit and a shit income than great income with shit credit

user, i seriously hope this is bait. if not, pick up a book on finance - in fact, pick up 5 books.

did your sociology teacher tell you otherwise?
enjoy your 9-5

business owner here.
you're sort of right, but you'll never get great credit as a business owner until you're grossing at least half a million in sales a year for a minimum of three years running. Once you do that your bank will probably lend you a few tens of thousands of dollars when things go bad, maybe even a couple hundred thousand. But I can tell you from experience they hate lending to business owners when income is down, doesn't matter how good your credit.

On the flip side, they'll lend you pretty much anything if you have tons of income, they don't care about your credit then. Having huge income is a solid substitute for having good credit. It does have to be a LOT of income though. Way more than most wageslaves imagine.

It wasn't funny the first time you said it, it just sound desperate now.

Educate yourself, user. Jesus Christ.

yeah, I don't think any of those will teach OP anything about borrowing money as a small business owner.

a topic by the way that isn't really covered under the broad headings of "finance."

way to show you don't know the difference between business and investing tho.

dont you think that depends on the industry you're in?
for example: the two best ways to build credit are
a) auto loans
b) mortgages

mortgages obviously being the better option thinking ONLY about the credit (and not perhaps, the best option for an individual, ie: no reasonable person would start a mortgage solely just to build credit).

as far as lending you anything if you have tons of income, thats partially true. Partially true because if you're new in the credit world, if you make lets say hypothetically 20k a month, but have no credit history and have only been making this income for about 4-5 months, although you may be confident in your income, the banks are not as confident as you are unless you have atleast 2-3 years history of this income if you are a business or private contractor. correct me if im wrong here.

the problem with personal credit as a business owner is the bank knows that they're lending to your business, not just to you.

and business loans are notoriously bad risks, especially small business loans. So having a good credit score doesn't mean as much, you'll always be a bigger risk just because you're self-employed.

regardless of industry.

I've been in business longer than my bank has, it's still a major thing trying to get a loan. I have excellent credit and several hundred thousand a year in gross income. Last time I refinanced my house it took six fucking months to get all the paperwork done and find anyone that would give me a loan.

it's a nightmare, good credit or no.

>I don't think any of those will teach OP anything about borrowing money

That's correct. I linked those books because that user needs to improve his financial intelligence before he should even start to worry about borrowing as an S. How can he get to that level if he does not have a solid foundation of what the difference between investing and borrowing?

I used the term finance in a purposefully broad manner - a lack of a thorough understanding on which aspects of a business important indicates that user has little to no understanding in any of those categories, hence "finance". Investment is a good place to start as it can help build passive income while maintaining E income.

interesting input. i dont understand why having a good income and good credit would still hesitate banks to loan you money just because they know you are a business or that its for your business. Is that just the way it is?
i mean if you have an 800+ credit and a 6 figure income and that still isnt enough to persuade banks that you are a reliable lendee, what will? suckin their dicks?

>borrowing as an S
kek

almost all businesses are sole proprietorships.
you may not like that fact but it's still a fact.

most businesses are started and operated by people that don't have half your knowledge. And a lot of them will be very successful in spite of it.

>Is that just the way it is?
yes, they're betting on your ability to make money and unfortunately most people are idiots.
>i mean if you have an 800+ credit and a 6 figure income and that still isnt enough to persuade banks that you are a reliable lendee, what will?
Like I said- a gross of over half a million a year for a period of at least three years straight.
Also a 3 month P&L showing those same numbers.

Consistently netting something helps too.

sound advice user thanks, i look up to you
this
most businesses are operated by people who have empirical knowledge of their industry and not by something they read online. xxxxx282 please kill yourself trump will not help you.

godspeed user with an iq of above 30, and best of luck to your biz
the rest of you faggots keep wageslavin, the world will continue laughin as you try to "educate" others :^)

don't get cocky, you've still got a 90% chance of failing. So do I.

best of luck.

90% is a stretch desu, more like 20-25%, what industry are you in?

Any credit union worth it's salt. We had D papers at around 11% where I used to work.

Doesn't matter though. If you're credit is that weak odds are your income is shit and you have no business financing a car.

>if you're credit is that weak odds are your income is shit
kek you're either retarded or didnt read that i have less than 2 years of income history

everyone in this thread is fucking retarded and literally must never have bought a car before. OP gets a pass since he's asking

all of the car loan interest is built into the loan at execution. your outstanding balance on the loan will be 12k the moment you sign and will never get any bigger (unless late fees happen). that's why there's no prepayment penalty.

You should do two things
1) pick out a cheaper car, maybe in the 8k range?
2) get a shorter term loan, make sure you can afford the higher payments (which if you get a cheaper car should not be an issue). you will waste far less in interest.

>enjoy your 9-5
enlighten me on your amazing job that can afford you a whopping 2 thousand on a 12k car

screencapped for future just fuck my shit up threads

If you're so fucking smart what are you doing on Veeky Forums asking for advice?

Get bent you mental fucking midget.

who the fuck said i was asking for advice?
>Im buying my second car tomorrow (first time from a used car dealership) and i wanna know if i understand this correctly
i dont want advice, i just wanted to make sure i understood the concept correctly. you are literally fuckin retarded jesus fuck. is all of Veeky Forums like this? or is this faggot a special snowflake.

do you want me to post screen caps of my pay statements too? or do you just want an idea of what you should be doing with your life at 23, because it sounds like the latter.

i thought this board was redpilled, some posters are but it seems like the majority of the posters are cucks.
back to /pol/ for me

oh come on, this is completely on yourself. you had a nice troll thread going. but you came on way too strong way too early. i think at this point all you can do is abandon the thread and try again in a few days.

was the turning point. 1) is excellent. most people are too stupid to realize it's a meme. 2) is where you went off the hinges. should have saved it for later or maybe axed it completely. you gotta rope them in first, not blast them in the face on your third post. and diversify your insults while you're at it. "enjoy your 9-5" gets old after the third time. you tried to salvage it with the contractor story, but at that point it was already too late.

overall i'd give you a 3/10, but only because of persistence, not quality of content.

wowsers thanks pham im finally using my brain now #staywoke

in english please?

The interest rate from the bank is completely dependent upon your credit rating. I started with a shitty credit card with a yearly fee when I was 18 and have always put monthly purchases on it and paid it off in full every time. I literally didn't even try and I had 750 when I got my first car, put a down payment of 15% and the loan was 4%.

Reminds me of LPG's stories on Veeky Forums, he was a car salesman and he would see catastrophically, explosively low credit scores like 400 and 300. In his state of NC the highest a bank could issue was 29.7% and people would regularly take it.

The only reason why you should take a loan like this, or even a 17% one, is if you just got a job/income but need transportation, because it will enable you to pay it off. Otherwise this is pointless especially if it's a second car, what will you even use it for?

>buying a liability with credit
>ever

Holy shit Veeky Forums

i understand build your credit first then get a better deal but that takes time, which is literally money wasted for every day i dont have a car.
Im going to rent these cars out to drivers, and everyday i don't have a car because im busy building credit on a credit card, im losing out on 60$. So id rather buy the car at a shit interest rate now, have someone else pay it off entirely within the first year, make 20k a year with it doing next to nothing for the following 2 years (car is usable to me for atleast 3 years) and build my credit at the same time than just not have a car and spend money to build credit.

actually buying $450 a week for doing nothing with credit

OP, your proposed business is literally you just being a middleman between a car dealer and the drivers. You're just maintaining and storing stock so it's available to drivers cheaply and with liquidity.

You seem to believe that this business, which is open to anybody with a driveway and can apparently be started with $12k of capital, somehow operates on > 17% margins.

You're already into full retard territory, but given this, why in the sam hell are you taking a dealer loan when you know full well that most any other source of financing would be cheaper. You're literally leaving money on the table.

>people are this stupid

What the hell are you on about? Read OP's post again.

>A 17% interest rate isn't bad at all then if you can pay a car off in a year

Bruh I financed my BMW at 0.99% with no pre-payment penalty.

Agreeing to 17% is straight up fucking retarded.

This. Willfully ignoring other finance options that you know will benefit you is just shameful

you still haven't explained why someone would pay a premium to rent a car that they could buy for cheaper

what dont you fucking understand that i cant get a better deal right now because of my shit credit, personal contractor status, and less than 2 years of employment history? or did you not fuckin read when i wrote that in this thread.

1) the car is paid off in a year, completely, the following two years the car makes me 20k a year
2) i obviously do not plan on doing this in the long run, i did it with this car to put my credit record on the book and to build my score. There is no other finance option for someone in my situation, so i'll take it.

the way i see it, someone is driving my car for a year, paying it off for me, and building my credit score and then after a year i will have better finance options to purchase more cars at better rates, all while the following 2 years after that, the driver is putting $19,800 a year into my pocket.

What is the problem with this again?
>muh better rates somewhere someplace
k

2/10

That car is costing you $50 a month for how long you hold the loan + 16k

How is that a good deal fuck I wish I could loan money to retards like you