Carrying Cost?

[zelio]

The gas/credit card financing idea leaves me scratching my head. Why would someone use it to put gas in their Elio at 3X the price when they can fill it up with a different card or cash? There has to be a minimum payment, so why the weird gas payback thing? I just don't see why anyone would use it since there has to be a minimum payment anyway.

I gave up credit cards 10 years ago and find the idea of carrying one unpleasant. I would be afraid of the card being sold to a different financial institution and the interest rates either being very high to begin with and/or going very high. I think I will go to my credit union today and show them pictures of the Elio to find out whether it would be financed as a car or a motorcycle. I understand interest rates on car loans are lower than on motorcycles. I figure by showing them the pictures now gives them at least a year to figure out how to handle a loan request for my Elio. :-) Z

 

[goofyone]

The gas/credit card financing idea leaves me scratching my head. Why would someone use it to put gas in their Elio at 3X the price when they can fill it up with a different card or cash? There has to be a minimum payment, so why the weird gas payback thing? I just don't see why anyone would use it since there has to be a minimum payment anyway.

The theory behind the credit card idea is that Elio is supposed to get 3x the gas mileage of the average car so theoretically if you pay 3x as much when you fill up your Elio you are only paying what the average person pays for gas but you are getting a new car also.
From a marketing perspective this is a pretty neat idea as a way to sell cars, what you save in fuel pays for the car, however we all know there is a difference between marketing and the realities of financing a purchase.

 

[Craig]

The gas/credit card financing idea leaves me scratching my head. Why would someone use it to put gas in their Elio at 3X the price when they can fill it up with a different card or cash? There has to be a minimum payment, so why the weird gas payback thing? I just don't see why anyone would use it since there has to be a minimum payment anyway.

There will be. I think someone on here figured around $127.00

 

[Autoxdriver]

The theory behind the credit card idea is that Elio is supposed to get 3x the gas mileage of the average car so theoretically if you pay 3x as much when you fill up your Elio you are only paying what the average person pays for gas but you are getting a new car also.
From a marketing perspective this is a pretty neat idea as a way to sell cars, what you save in fuel pays for the car, however we all know there is a difference between marketing and the realities of financing a purchase.

Thanks yes I understood that. My point was, what is to stop someone from just not using the card or use it very little as a way to get out of making their payments or pay very little. It gives the owner complete freedom as to how much they want to pay per month, if any, so linking it to fuel payments really doesn't work since you can buy fuel without using the card.

 

[BlioKart]

Thanks yes I understood that. My point was, what is to stop someone from just not using the card or use it very little as a way to get out of making their payments or pay very little. It gives the owner complete freedom as to how much they want to pay per month, if any, so linking it to fuel payments really doesn't work since you can buy fuel without using the card.

A minimum payment would be required. Nothing would stop you from not using the card. I am sure those who use this type of financing if it does happen will skip using the card at times. I don't blame them so would I to a certain degree. Its a good marketing tool to sell the autocycle

 

[Ty]

I would bet that the interest rate on the loan, paid off by your purchases of fuel at a 2 for 1 rate would be high enough to discourage delaying paying off the car. $6800 * 8% = $544. $544/12 months = $45.34 per month in interest.
In theory, someone could pay $45.34 a month and NEVER get their Elio paid off. Of course, they could pay less and they would owe more on their Elio than they started off owing. There will be a minimum payment. It will be through a finance company that will give Elko the funds up front plus a share of the interest. It won't be cheap. Most would come out ahead securing their own loan. However, it will enable some people to get one who otherwise would not have been able to. That's my story and I'm sticking to it.

 

[goofyone]

Thanks yes I understood that. My point was, what is to stop someone from just not using the card or use it very little as a way to get out of making their payments or pay very little. It gives the owner complete freedom as to how much they want to pay per month, if any, so linking it to fuel payments really doesn't work since you can buy fuel without using the card.

My point was that this is nothing more than a good marketing idea designed to sell cars. The difference between how it is being marketed and the reality of how the financing will have to play out is that there will be a minimum payment each month just like any other financing offer.

 

[lafrisbee]

I gave up credit cards 10 years ago and find the idea of carrying one unpleasant. I would be afraid of the card being sold to a different financial institution and the interest rates either being very high to begin with and/or going very high. I think I will go to my credit union today and show them pictures of the Elio to find out whether it would be financed as a car or a motorcycle. I understand interest rates on car loans are lower than on motorcycles. I figure by showing them the pictures now gives them at least a year to figure out how to handle a loan request for my Elio. Z

Really? you are hurting yourself. I try to buy everything on my credit card. Not only does it afford me more protection than any other monetary transaction insurance/protection. it has several advantages. I get a minimum of 1% paid back to me for all my purchase. I get the ability to cancel a payment if a seller doesn't fulfill his side of the transaction. And i also get a detailed history of the account to let me understand where and when the money went. And I get it for absolutely NOTHING/FREE. All the lending institutions will give you a CC and set up an automatic payment for it at the end of the cycle. If paid off then there is NO additional expense at all. And it is also quicker to pay by CC at the checkout than almost any other form of payment. Even faster than a debit card because most CC have an automatic payment below a certain amount so you don't even have to type in your PIN. I actually make a few hundred by using a CC.

 

[JP]

The gas/credit card financing idea leaves me scratching my head. Why would someone use it to put gas in their Elio at 3X the price when they can fill it up with a different card or cash? There has to be a minimum payment, so why the weird gas payback thing? I just don't see why anyone would use it since there has to be a minimum payment anyway.

My feelings exactly! If the minimum payment for the gas credit card is say $100/ month, if I put down a $2000 down payment, which seems reasonable for most people, at $6800, I will be paying off the remaining $4800 plus interest for close to 4 years. On a vehicle this cheap, I down want to finance it for long. I'm hoping to skip the gas card and put down about 4-5k so I have a nice little payment to help my credit rating

 

[Craig]

My feelings exactly! If the minimum payment for the gas credit card is say $100/ month, if I put down a $2000 down payment, which seems reasonable for most people, at $6800, I will be paying off the remaining $4800 plus interest for close to 4 years. On a vehicle this cheap, I down want to finance it for long. I'm hoping to skip the gas card and put down about 4-5k so I have a nice little payment to help my credit rating

Use the gas card, make high payments when you can (no limit), when times get hard, make the lowest payment.