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Posted in Auto Loans
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Soldier789

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I Just got two car loans please offer advice. or offer constructive criticism if i made a ill choice
Im 24 and i just bought a nissan versa. with that being said last october i financed a 2016 mustang im still paying the payments and decided to get a 2016 versa as well with my credit history i was approved the car dealer said it was un-heard of some one my age getting approved for two well sized auto loans. with that being said is this a good thing for my credit history or did i make a bad decision.

" I can afford my bill to debt ratio"

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While the installment loans and making on time payments every month is good; be aware paying interest is wasted money. The exception is a mortgage loan where interest can be deducted on your federal tax return filing long form. 

As young as you are, I am assuming your vehicle insurance is high purchasing the Mustang muscle car. Also with new vehicles being financed, you must have comprehensive insurance and you should also have gap insurance.  A new vehicle depreciates the moment it's driven off the lot. Purchasing a pre-owned, or end of year close out vehicle can save thousands on the purchase price.

I would like to suggest reading up on, obtaining, and utilizing reward credit cards. Only charge what you can pay off every month. You'll have monthly reported payments and you won't be wasting money paying interest.

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This is one of those "yes and no" things

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Long term, it will likely be to your benefit.  In the immediate future, it will have done a little harm.  Why?


  1. The inquiries.  Although those are only a couple of points.
  2. You've brought down your average credit age, although how much, likely only you will know.  Being 24, it likely is more than less.
  3. Given that you mention they are well-sized, your loan balances may have a slight impact on your scores, especially if they are 70% or more of the purchase price (more on that below).

Maintain the payments, though, and it will eventually be fine.

A couple of words of advice that mindjazz mentioned above.

Financing a depreciating asset isn't always the best choice, particularly when the rate of interest is higher than the inflation rate and the depreciation rate is as high as it is on a new car.  You've doubled down on this, with two cars.  Moreover, if you missed the "magic number" on the down payment, >30% down, you are paying higher interest than you should.  While cars are fun and it is nice to have both a commuter and a toy (been there, done that), you can only drive one car at any given time and you are now paying insurance and interest on both.  Lastly, circumstances change and you might find yourself handcuffed to the two cars, and, adding insult to injury, be upside down on the loans (been there, done that as well).

I, too, once had sufficient funds to put towards things like this; looking back I rather wish I hadn't as I could have put that money to better use later on in life.  You could put the money towards a brokerage account, a big ticket item (i.e. house, where 20% down makes a big difference on interest and PMI), a Roth IRA where the returns in 40 years will be spectacular AND tax free, or flush out your "emergency fund" (6 months of all expenses, in the event of an emergency).  There's lots of things you can do to put the money to work for you.

Ah, twas fun to be young and have good income.  However, a few years down the road, it is much nicer not having to remotely worry about bills, or the cost of purchases; always have a 5, 10 and 30 year financial plan, much like a car loan, a student loan, and a mortgage.

Good luck, and enjoy it!

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Ha, 

You Young Folks kill me.  

You want someone to tell you that you are ok.   Won't Happen Here.

Are you NUTS!,  2 Car Payments at 24?     Seems like you like to Have TOYS!

I Challenge you to Sell both Cars and buy a beater 3k to 4k  car for Cash.   Then save your Monies you would be making car payments for 2 years. then and only then go out and upgrade your Car.  NOT New,  but a Newer Used Car.

How much are you saving now?

Do you have 401K  or IRA?

Do you have a Monthly Budget?

etc etc etc. 

Google Dave Ramsey and start Reading. 

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