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Started By
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Finance a car? or pay in cash?
Posted on 9/13/19 at 1:25 pm
Posted on 9/13/19 at 1:25 pm
What would be your threshold for paying for a car outright vs. financing it?
Is it ever a good idea to pay for a car in cash?
What do the Money Talk experts think?
Is it ever a good idea to pay for a car in cash?
What do the Money Talk experts think?
4
Posted on 9/13/19 at 1:34 pm to Uhtred
quote:what rate can you get?
What would be your threshold for paying for a car outright vs. financing it?
quote:depends.
Is it ever a good idea to pay for a car in cash?
If you can get a low enough interest rate, then it's a matter of personal preference. If you can't get a low interest rate, then you should pay cash. But then again if you can't get a low rate, the odds of having enough cash for the purchase are low.
Posted on 9/13/19 at 1:39 pm to Uhtred
cash if the VIN numbers are scratched off and there isn't a title.
sorry if this feels like a troll, but need more details... a carload more. What type of car... new, used? How is your driving record? outright title and you will likely have lower insurance rates. who much will this affect your debt to income ratio.
I'd recommend buying a more expensive car like a buggati and never driving it putting it in you temperature controlled car collection parking garage... 30 years from now it will be worth 10 times as much
sorry if this feels like a troll, but need more details... a carload more. What type of car... new, used? How is your driving record? outright title and you will likely have lower insurance rates. who much will this affect your debt to income ratio.
I'd recommend buying a more expensive car like a buggati and never driving it putting it in you temperature controlled car collection parking garage... 30 years from now it will be worth 10 times as much
This post was edited on 9/13/19 at 1:48 pm
Posted on 9/13/19 at 1:56 pm to yatesdog38
quote:not sure yet. nothing fancy, though. i view automobiles more for function over fashion. pricing probably in the 30 - 40k range.
What type of car... new, used?
quote:haven't had a ticket in 12 years
How is your driving record?
quote:not much
who much will this affect your debt to income ratio.
I'm just curious. I hear people discussing the merits (or bragging) about paying for a car with cash. But I think the money invested will earn more over the 3-5 years relative to the rate of the loan... therefore, it may not be worth it to pay in cash.
I've never been fortunate enough to have this decision to make before. So I'm in unchartered territory here.
This post was edited on 9/13/19 at 1:58 pm
Posted on 9/13/19 at 1:59 pm to Uhtred
I like doing 3 year loans at 1.99% through Jefferson Financial. Makes sense to me.
Posted on 9/13/19 at 2:03 pm to Uhtred
Financed the last two though I could have paid cash. One was a zero percent deal through VW. Not gonna turn down free money! Other one was 2.3% through USAA, for a 36 month loan I paid off in 24. For the very small amount of interest I paid, it was nice not to pay for the whole thing upfront.
Posted on 9/13/19 at 2:11 pm to Uhtred
I paid cash for my last car but think of it as "self-financed". I calculated the 60 month payment schedule using a 6% interest rate and set the auto transfer to my brokerage account for the 15th of every month. Sure the rate is above market but I get the benefit. And it prevents me from feeling like it is "paid off" because I've only paid myself back about halfway at this point.
I know I'm playing a bit of a mind game with myself and that this is essentially a self-enforced savings plan. But if you have the cash and don't see any other attractive investments, this could get you over the mental hurdle of buying a depreciating asset vs making an investment.
I know I'm playing a bit of a mind game with myself and that this is essentially a self-enforced savings plan. But if you have the cash and don't see any other attractive investments, this could get you over the mental hurdle of buying a depreciating asset vs making an investment.
Posted on 9/13/19 at 2:41 pm to Uhtred
take the 40 grand put it in something high risk like Prospect capital PSEC and use the dividends to pay for a lease. :)
just kidding this is all really a subjective thing. Some people hate debt. Some people are great with it. If you can get like 2% like someone else mentioned that is dirt cheap finance the shite out of it.
just kidding this is all really a subjective thing. Some people hate debt. Some people are great with it. If you can get like 2% like someone else mentioned that is dirt cheap finance the shite out of it.
Posted on 9/13/19 at 3:30 pm to Uhtred
My main issue with financing a car is I feel it generally leads people to spend more than they need/should.
The interest on auto loans is generally low enough that they make sense so if you're trying to decide between taking $30-40k out of stocks/savings and paying cash vs. financing, go for financing if you can get a good enough rate. If you're trying to decide between spending $20k on a car in cash or putting $20k down on a $60k car and financing the $40k, I'd go for the cash option at $20k.
If I can't buy a car in cash, I'm not going to buy it. That doesn't necessarily mean I'm going to pay in cash though, if that makes sense.
The interest on auto loans is generally low enough that they make sense so if you're trying to decide between taking $30-40k out of stocks/savings and paying cash vs. financing, go for financing if you can get a good enough rate. If you're trying to decide between spending $20k on a car in cash or putting $20k down on a $60k car and financing the $40k, I'd go for the cash option at $20k.
If I can't buy a car in cash, I'm not going to buy it. That doesn't necessarily mean I'm going to pay in cash though, if that makes sense.
Posted on 9/13/19 at 3:44 pm to yellowhammer2098
quote:
If I can't buy a car in cash, I'm not going to buy it. That doesn't necessarily mean I'm going to pay in cash though, if that makes sense.
This is my sentiment as well.
Posted on 9/13/19 at 3:52 pm to Uhtred
quote:
i view automobiles more for function over fashion
quote:
30 - 40k range.
Posted on 9/13/19 at 5:55 pm to Powerman
I have a family. Look up prices for a Honda Odyssey, haha
Posted on 9/14/19 at 9:21 am to Uhtred
Since becoming debt free, I only pay cash. Money in the bank doesn’t make enough to worry about plus interest is not tax deductible. I don’t buy crazy priced vehicles. Goes against my grain. I try to stay under 40k.
Posted on 9/14/19 at 10:11 am to Popths
I’ve never financed a car that didn’t have 0% financing. Not sure why anyone would ever pay interest on a car.
Posted on 9/14/19 at 2:57 pm to Powerman
quote:
Powerman
$30-40K isn’t a crazy amount for a vehicle. Yes, there are always cheaper options but that’s not an unreasonable range.
Posted on 9/14/19 at 3:52 pm to lynxcat
quote:
$30-40K isn’t a crazy amount for a vehicle.
Oh certainly not for a new vehicle
10 years ago you could make that claim but now it's tough to find a family car under 30K
Posted on 9/17/19 at 10:53 am to Powerman
Pay cash if you can
Posted on 9/17/19 at 8:29 pm to Popths
I cant stand a cra note so i like to pay in cash if i can.
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