Better to pay cash, finance or lease a new car now?

always pay cash for a depreciating asset if you can afford it

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I recently qualified for 3.75% w zero down through Ft Liberty FCU. They offer 3.49% w large down payment. I'm not paying cash that I'll keep invested when rates are available below 7%.

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on one hand you COULD make more money invested than you are spending in interest, but on the other hand you KNOW you are spending more on the car than you would have otherwise. its a risk that you dont necessarily have to take if you have the unencumbered cash

it will depreciate either way

I typically always carry a balance for a little while vs paying straight cash. Sometimes it’s 90 days and sometimes it’s almost 3 years depending on the rate.

it depends on the rate.

At standard rates of about 6-7%, I’m paying cash.

If a manufacturer subsidized rate of 3.5% or lower is available, financing is a no brainer.

Wife got a 1.9% on a used car a couple months ago.

I didn't even know those rates were available these days.

I got 0.9% on a 3 year new car loan last summer. Paying cash in that scenario would be stupid

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i would not finance shite if you get locked into the interest owed regardless of early payoff like a precomputed interest loan. get a simple interest loan and payoff early.

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Are there any mainstream retails loans structured this way?


I see it on seller financing deals, but not normal consumer loans through a traditional lender.

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Wife got a 1.9% on a used car a couple months ago.

I didn't even know those rates were available these days.

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Where!

Lowest I am seeing is sub 5% for 24 months on used. I am not buying new, its insanity right now, but have been looking. I was just going to do something for 12-15k cash, but if I can get a decent rate used I would get something newer, nicer. Surprising I have found some nice cars in the 12-15k range, but a lil more opens up more options.

If you can get a very low interest rate, financing is better and keep the cash in a HYSA/invested.

We got 1.49%/36mo on wife's '22 MDX this past summer. The savings that would have paid that car off easily is making us 4.25% still. If you can make the spread, might as well make the spread.

Unless you get some leashackr deal, I wouldnt tend to lease anything with an gas engine. It's almost always going to be the most expensive way to have a vehicle.

Electric is very different as they get the $7,500 rebate applied to the lease and it makes a lot of them very reasonable. Like $300-$500/mo with no down payment for a $40k-$50k vehicle in a lot of cases.