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re: Dave Ramsey's advice to pay off a car loan, rather than invest
Posted on 1/15/20 at 3:29 pm to yatesdog38
Posted on 1/15/20 at 3:29 pm to yatesdog38
Depreciation is going to happen if you own the car outright or finance i'm not sure how that is relevent. If you are selling your car financed you may have to pony up some more money after selling the car to pay off the note. All i'm saying is paying cash for the car causes you to buy something you can actually afford and that buying a car cash has more reasons than simply the generic investing it and getting 8%. You can buy cash and lock in your car price and have it paid. You could finance and if in a bind need to sell your investments that have hopefully grown in value and not suffered losses.
1
Posted on 1/15/20 at 3:33 pm to tigersfan1989
quote:
All i'm saying is paying cash for the car causes you to buy something you can actually afford and that buying a car cash has more reasons than simply the generic investing it and getting 8%.
More of the "more personal than finance" stuff here, which is true.
Also, this is where Dave's other steps come into play. You aren't paying off any debt without a $1000 emergency fund, and you aren't investing unless you have a much larger emergency fund.
You have to look at it all together, not just parts of his advice.
Posted on 1/15/20 at 4:03 pm to LSUFanHouston
While we are at it let’s finance the living room furniture, refrigerator, washer and dryer bc we can get a great rate and invest that money in the market too. I’d hate to see all those payments.
Posted on 1/15/20 at 4:15 pm to tigersfan1989
quote:
While we are at it let’s finance the living room furniture, refrigerator, washer and dryer bc we can get a great rate and invest that money in the market too. I’d hate to see all those payments.
If Best Buy is giving me interest-free financing for 60 months for something that I'm already planning on buying, you better believe that I'm taking advantage of that free money.
Posted on 1/15/20 at 4:18 pm to tigersfan1989
Why would you not take interest free financing?
Posted on 1/15/20 at 4:29 pm to jimbeam
quote:
Why would you not take interest free financing?
I agree. Just because some people cannot control their discretionary spending or live within their means doesn't mean I have to ignore really good deals. Not everyone has a spending or debt problem. Some folks can happily use credit to take advantage of good deals without overextending themselves.
Posted on 1/15/20 at 4:32 pm to hungryone
Mathematically nothing is wrong with a interest free loan. I guess like the other poster said the personal finance part comes in to play where I personally wouldn’t like it for me. But each to his own. As long as you’re happy with it that’s all that matters at the end of the day.
Posted on 1/15/20 at 9:52 pm to tigersfan1989
quote:
While we are at it let’s finance the living room furniture, refrigerator, washer and dryer bc we can get a great rate and invest that money in the market too. I’d hate to see all those payments.
That’s exactly what I did when we bought new furniture for our new house (up to $8,500). Bought it in July of 2018 and it’s interest free through July 31st of this year. Of course, the big catch is that if it’s not paid off completely, the interest is retroactively put back on the entire amount. So I can see how it’s a bad idea for some people. That being said, I would do it every time if I had the chance. 
Posted on 1/15/20 at 11:29 pm to buckeye_vol
The majority of people that take interest free loans on household goods do not pay them off in time and get hit with the retroactive interest, that’s why these loan terms exist, it would be a poor practice for the lender otherwise. Have a family member that owned a string of appliance stores and their success depended on this lending model.
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