Auto Loan in Q2013 D

What modification are you talking about, and where is your confusion? You need to set up a loan account for amount of the loan for the X Finance corporation and do transfers monthly from your checking account to the loan account. You can do those transfers manually or automatically.

I would like the check from my checking account to be made out to "X finance Company". As it is, it uses the title of the loan account.

What is the asset account all about? It doesn't seem to do anything.

What do you mean by a transfer from my checking to loan account?

The Q web site says that the loan parts of Q2013 has all been reworked and that there are bugs in it.

You can make a check out to whomever you want. That has nothing to do with the transfer. See below.

You can also create an asset account, for the value of the car, and each month add the amount you pay for it. Also make any needed adjustments to the value, as necessary, for example, as the value of the car goes down with age. So it will always represent the value of the car to you.

But that has nothing to do with the loan and the monthly payments.

Let's say you pay $200 a month, your checking account is called Checking, and the loan account is called Car Loan. You can do this in either of two ways:

1. In the checking account create an entry for a 0 check to the payee X finance Company. In the Category field, enter [Car Loan], the name of the Loan account, in brackets.
2. In the loan account create a Decrease entry for 0 to the payee X finance Company. In the Category field, enter [Checking], the name of the checking account, in brackets.

Doing either of those has the same result: two transactions will be created, one decreasing your checking account balance, the other increasing the amount that has been paid to X finance Company

I have a car loan and do almost exactly what I said above every month, with no problems. The only difference is that I don't write and mail a check, but I have Quicken scheduled to automatically do an EFT to the finance company and make both entries. So I don't have to do anything manually.

Thanks for your responses.

Part of my problem, is that when I started, Q set up both a loan account and an asset account. I don't remember being asked about it at the time. This created some of my confusion. I don't think I want the asset account and might delete it. I have to play with this a little bit more.

"Marvin Kornblau" wrote

Part of my problem, is that when I started, Q set up both a loan account and an asset account. I don't remember being asked about it at the time. This created some of my confusion. I don't think I want the asset account and might delete it.

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Quicken does not create the asset account automatically, you must click a button on the last loan account setup dialog box to get the asset account (which is used to track the equity in the asset).

You can delete the asset account without creating any problem for the loan.

You're welcome. Glad to help.

See John Pollard's response. You are certainly free to delete the asset account if you don't want it. It's entirely up to you.

This feature of Quicken has always confused me (assuming I understand it correctly :)) If I make a car payment, it is split between principal and interest. The interset is an expense, and is assinged to a category like 'Interest:Car Loan' The principal is deducted from liability *Account* callled Car Loan. or in Quicken-speak, [Car Loan]. Why would I want to add something to the value of the car? It hasn't changed. My Net Worth has changed because that liability has gone down. But if I add (I assume the principal) payment to the Car asset account, I'll double-count it in my Net Worth Statement. Or did I mis-understand?

"Jim Nugent" wrote

This feature of Quicken has always confused me (assuming I understand it correctly :)) If I make a car payment, it is split between principal and interest. The interset is an expense, and is assinged to a category like 'Interest:Car Loan' The principal is deducted from liability *Account* callled Car Loan. or in Quicken-speak, [Car Loan]. Why would I want to add something to the value of the car? It hasn't changed. My Net Worth has changed because that liability has gone down. But if I add (I assume the principal) payment to the Car asset account, I'll double-count it in my Net Worth Statement. Or did I mis-understand?

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I'm not certain, but based on your post, I'd say you mis-understood.

The "value" of the asset is not dependent on your equity in the asset.

You could own an asset that you paid $100,000 for, and which you now have no liability for - that is: you own the asset outright. But that does not mean that the asset is worth $100,000 - it could be worth $10,000 or $1,000,000 (or much more, or much less).

Any asset you own is "worth" nothing more, and nothing less, than what someone else will pay you for it. Someone might be willing to pay you more than the asset cost you ... or they may only be willing to pay you less than what you paid for that asset.

Thanks John. Actually, we agree. The linkage in Quicken and the prospect of (as Ken Blake wrote a couple of posts back)

+> You can also create an asset account, for the value of the car, and +> each month add the amount you pay for it. concerned me. It seemed as if the claim was that you were adding to the value of the car by paying off the loan.

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Thanks John. Actually, we agree. The linkage in Quicken and the prospect of (as Ken Blake wrote a couple of posts back)

+> You can also create an asset account, for the value of the car, and +> each month add the amount you pay for it. concerned me. It seemed as if the claim was that you were adding to the value of the car by paying off the loan.

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What you can do is link the auto loan account and the auto asset account, which will allow Quicken to display a graph showing your equity in the asset. As you pay more principal on the loan, your equity in the asset increases ... though what that asset is "worth" could actually be decreasing.

Once a year or so I create a depreciation adjustment entry in the auto asset account to address the decreased value.

You are not adding to the value of the car but you are adding how much equity you have in the car.

So for example, let's say you buy a car for $20,000 and start with a $5,000 down payment. Your equity is $5,000. If you pay $300 a month on the loan, each month the equity goes up $300. So after one month, your equity is $5,300; after two months, it's $5,600, and so on.

Of course, you may also have to make adjustments to the equity, based on the condition of the car, how many miles it's been driven, etc.