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

shite. I just financed a 2025 cx-50 for 0 percent for 72 months

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Given current rates. Is it always better to pay cash if you can comfortably afford it?

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I was a blue-collar worker for 46 years and worked 12-hour shifts. I haven't had a car note since 1984. When you don't pay interest and invest appropriately, you win.

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

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That much cash outlay would be dumb. Finance the car and invest the cash.

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You think the market is going to increase by less than 7 or 8% annually under Trump?

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It’s unlikely we will see anything near where the market increases have been under Biden. If you are messaging on this board then you already know that the market typically does better with democrats in office than republicans. The markets will almost certainly be greater than 8% in three of the next four years, through.

I think the guaranteed rates of return in the next administration will be less than they were under the current administration.

Any rate above 6%, I am paying cash. I think every situation is different for buying a car with cash v. financing, though. For some, their risk tolerance is not as high and peace of mind is worth more than losing a few % of gains by risking it in the market. For others, the misery of missing out on potential gains makes it worth the risk.

assuming your 943/mo is accurate then you’ll have to make 6500 on the 50000 over 5 years to break even. Seems easy enough yet the buying power of your 50000 has decreased 2-3% a year in the meantime so now you are another 5000 in the red.

so you have to make over 10K on the 50g’s over 5 years to get back to even. Now you can start making money. you’ve assumed 10K of risk at the loan close

I believe that the case for paying cash is every bit as compelling as that for rate/return arbitrage

How is your buying power decreasing if you've invested the money? Inflation actually is working against the cash buyer. Financed, you are paying the same amount over 5 years, but every year, you are giving less buying power in the same nominal amount. Inflation is only helping the financer.

If your plan is to finance and then just put that 50k under your mattress, then yea, you should probably pay cash, that's a no brainer.

If someone gives you a 2% loan today, that's essentially free borrowed money, ignoring everything but inflation. You'd want to take out every cent you could possibly take under that loan.

ETA: I don't think inflation should be a major factor in any car purchase, but my point is if anything, inflation helps a financer, not a cash payer.

In my opinion, the cost/benefit of paying cash vs financing a car is very close if someone really has the savings and discipline to safely keep the cash invested with little risk and not change their spending habits. Also there's a hard to price emotional and mental freedom that comes with less debt. So people can choose their preference and not be wrong.

And I agree, basing a loan on historic "market" performance is a fools errand. That's why I say, what is risk free rate, and I'm willing to pay maybe 2% more to keep my assets by financing; especially when you consider inflation being higher than usual. Right now you can get 4.5-5% on 5-10yr CD's, for example, so I'd look at that and say I'd probably pay 6.5% on an auto loan rather than cash, just so I can hold my assets. Meanwhile, youre making 20%+ in the "market" but basing a financing decision on that is ill advised.

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You think the market is going to increase by less than 7 or 8% annually under Trump?

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With these P/E ratios? Yes.