Why do you need to finance a car? Dumb. Only goes down in value. And who needs to buy a house? Rent until you get your stuff together.
Rent until what? Until you save $300k to buy a house in cash? That's not realistic. When you rent, you're paying off someone else's mortgage. Why not pay off your own mortgage and build equity.
Listen, I'm a huge fan of paying for things in cash. 99% of the things I pay for, I pay for in cash. However, there are just some things that can't be reasonably paid for in cash.
Just because you see many doing this does not make it smart.
I am supposed to take delivery of a black 1022 tomorrow. I have a little savings, and pay all my bills on time monthly. My job is steady. I screwed up my credit five or six years ago and I am working on fixing it. The last four and half years (since I got my current job) I have been perfect and I am paying off old stuff too. Due to me working a ton of overtime lately I haven’t gotten a look at the final contract everything has been over the phone, but I know I am putting $750 down and paying about $37 a week for 3 years. I haven’t seen the discount, trade in, and interest break down yet. I know I will be paying more than I could for a used box ($3,500-$4,500 where I live), and I know some of the money will go to interest. I currently am rebuilding my credit by using a credit card and paying it on time monthly. The rate is 22% which is in line with Snap-On. I need to build credit and would rather do it by eating interest on something I like and will keep for an extended period of time. In order to make room in my budget I cut my fast food consumption down by half. I am able to pay the $37 a week without hindering my family's weekly budget. I know there are better things to spend money on.
My question is why do people freak out about taking on the credit? The payment is manageable to me, and I (think) I am ok with it. I have earned enough OT money to make payments for nearly a year if needed. All the Snap-On credit post I read have people getting over their heads and 80% of post bashing the credit as the devil. Help me understand it please.
Thanks for everything everybody. I backed out. I am not saying a new quality box is off the table, but I will continue to chip away money for "toys" through overtime and supplemental income and use financing for items for everyday and full family use. My kid can't sleep in a tool box. I will wait till I have cash in hand if at the time I still want the box I will then consider it.
To follow up with some of the other post. If I am going to buy I will stay with the 1022, or a good price on a 7022. I am maxed out on five 26" home owner chest that are give or take 6,500 square inches. A 722 does not giving me a lot of future room. I will wait until I can Pay cash. I may consider paying 90% cash and finance 10%. Of course if there is a great used one I have no problem going that route and financing at a lower rate other necessities of life to build credit. Also, I think some people are out of touch with the rates on credit interest. I am not finding anywhere near 17% I have a good steady job, that pays decent, but old mistakes are still hurting me. I called my credit card company and was able to up my credit line and get 0% interest until august 2013 from my current credit card company for paying early every month. I only use that card for household needs, but I now have a smaller percentage of my available credit used monthly which I learned, among other things from this post, can help for future borrowing. Sincere Thank You to everyone on this forum. Thank You for calling me out and opening my eyes. You guys helped me exert a new level of fiscal responsibility.