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Posted by
Message
Take out car loan at 3.9%?
Posted by kywildcatfanone
on 3/13/23 at 4:45 pm
6
0My credit score is 822. Buying the wife a new car. After trade in, cost is $15k. I could just pay it off and spend $15k, but should I just do a loan for 36 months? Looks like interest rates are about 3.9%. My only other credit is a few cards that I pay off each month.
Just trying to decide if I should keep the cash and do they payment, or pay cash and be done.
How do you guys decide?
Just trying to decide if I should keep the cash and do they payment, or pay cash and be done.
How do you guys decide?
re: Take out car loan at 3.9%?Posted by Hussss 
on 3/13/23 at 4:52 pm to kywildcatfanone
on 3/13/23 at 4:52 pm to kywildcatfanonePut the money in gold and gold miners and make the payments on the car.
Headed for a decade long breakout.
Headed for a decade long breakout.
re: Take out car loan at 3.9%?Posted by DawgCountry on 3/13/23 at 4:59 pm to kywildcatfanone
Many savings accounts are paying 3.5% and higher. So in theory, you could put that money in a high yield savings account and cancel much of the car interest out, but $15K isn’t a ton. If you value the car being paid off, there is nothing wrong with that
And if you don’t know, don’t listen to Husss
And if you don’t know, don’t listen to Husss
re: Take out car loan at 3.9%?Posted by Double Oh on 3/13/23 at 5:21 pm to kywildcatfanone
Damn 3.9% is nice these days
re: Take out car loan at 3.9%?Posted by Big Scrub TX 
on 3/13/23 at 5:29 pm to kywildcatfanone
on 3/13/23 at 5:29 pm to kywildcatfanonequote:It's obviously entirely situational, but from what it sounds like, I'd be a lean to taking it. Inflation is at 7% ish. You're still borrowing at negative real rates.
Just trying to decide if I should keep the cash and do they payment, or pay cash and be done.
How do you guys decide?
re: Take out car loan at 3.9%?Posted by Jag_Warrior 
on 3/13/23 at 5:53 pm to kywildcatfanone
on 3/13/23 at 5:53 pm to kywildcatfanonequote:
a loan for 36 months? Looks like interest rates are about 3.9%.
quote:
How do you guys decide?
I picked up a new Mazda last week. For a 36 month loan, they offered a .9% rate. I could have written a check or taken the loan and put the loan amount in a 3 year treasury at something around 4.5%. I didn’t hesitate to take the loan. Even though treasury yields have crashed during this banking kerfuffle, you can still come close to meeting or exceeding that loan rate in a safe investment. No offense Husss, but…. come on, man!
re: Take out car loan at 3.9%?Posted by kywildcatfanone on 3/13/23 at 6:01 pm to Jag_Warrior
on 3/13/23 at 6:01 pm to Jag_Warrior0.9. Nice. Honda is at 3.9 and so is my credit union.
And yes, I'm about to dump a bunch in either a HY account or some 6 month to a year bond.
And yes, I'm about to dump a bunch in either a HY account or some 6 month to a year bond.
re: Take out car loan at 3.9%?Posted by tigerstripedjacket on 3/13/23 at 8:33 pm to kywildcatfanone
on 3/13/23 at 8:33 pm to kywildcatfanonequote:
How do you guys decide?
Do I have an investment that will yield more than the amount of interest? If yes, take loan. If no, spend cash.
And FWIW if I have 15k I can always find an investment that yields greater than 3.9%.
re: Take out car loan at 3.9%?Posted by bbap on 3/13/23 at 8:36 pm to tigerstripedjacket
T-bills are yielding more than that right now. Could always reevaluate in a year or so.
re: Take out car loan at 3.9%?Posted by Joshjrn on 3/13/23 at 8:42 pm to kywildcatfanone
on 3/13/23 at 8:42 pm to kywildcatfanonequote:
Honda is at 3.9
They must have finally ticked up a bit. I got 2.9% from them a few months ago.
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re: Take out car loan at 3.9%?Posted by pwejr88 on 3/13/23 at 8:49 pm to kywildcatfanone
on 3/13/23 at 8:49 pm to kywildcatfanoneDepends on how much liquidity you have. I wouldn’t spend all my cash for sure.
You can always get a $15,000 CD, then take out a CD-secured loan for $15,000, buy the car in cash, and once you pay off the CD loan, and you’re left at the end with the car and your $15,000.
You can always get a $15,000 CD, then take out a CD-secured loan for $15,000, buy the car in cash, and once you pay off the CD loan, and you’re left at the end with the car and your $15,000.
re: Take out car loan at 3.9%?Posted by Turf Taint on 3/14/23 at 2:56 pm to kywildcatfanone
on 3/14/23 at 2:56 pm to kywildcatfanonequote:
Do I have an investment that will yield more than the amount of interest? If yes, take loan. If no, spend cash.
This
quote:
My credit score is 822.
My company's customer satisfaction score target is 8.5.
It is NOT 10.0.
Anything higher than 8.5 is incrementally greater cost for excellence than effective value for customer and our company.
Why do I share this here?
IMO, 822 is too high.
You may be leaving value on the table above a certain point, let's say 780, for example
You may want to use more credit to work your OP
ie, borrow lower interest than your money is earning and work positive spread
In doing so, you lower your credit score but you are increasing your wealth by using other peoples' money
Just reinforcing the point for consideration.
This post was edited on 3/14 at 2:58 pm
re: Take out car loan at 3.9%?Posted by Big Scrub TX on 3/14/23 at 3:29 pm to pwejr88
on 3/14/23 at 3:29 pm to pwejr88quote:
You can always get a $15,000 CD, then take out a CD-secured loan for $15,000, buy the car in cash, and once you pay off the CD loan, and you’re left at the end with the car and your $15,000.
what did I just read?re: Take out car loan at 3.9%?Posted by LSUFanHouston on 3/14/23 at 3:33 pm to pwejr88
on 3/14/23 at 3:33 pm to pwejr88quote:
You can always get a $15,000 CD, then take out a CD-secured loan for $15,000, buy the car in cash, and once you pay off the CD loan, and you’re left at the end with the car and your $15,000.
Wait... the car is free??
re: Take out car loan at 3.9%?Posted by Big Scrub TX on 3/14/23 at 3:52 pm to LSUFanHouston
on 3/14/23 at 3:52 pm to LSUFanHoustonquote:No, you pay off the loan with Shrutebucks.
Wait... the car is free??
re: Take out car loan at 3.9%?Posted by Meauxjeaux 
on 3/14/23 at 5:49 pm to kywildcatfanone
on 3/14/23 at 5:49 pm to kywildcatfanonePay off the car, put it in an LLC and carry liability insurance only?
You can save a good bit in La. like that.
You can save a good bit in La. like that.
re: Take out car loan at 3.9%?Posted by Grinder on 3/14/23 at 8:16 pm to kywildcatfanone
on 3/14/23 at 8:16 pm to kywildcatfanonePay the $15K for the car
re: Take out car loan at 3.9%?Posted by pwejr88 on 3/14/23 at 8:49 pm to Big Scrub TX
on 3/14/23 at 8:49 pm to Big Scrub TXquote:
what did I just read?
Do you not get it?
You’re basically paying interest on a CD-secured loan, which is usually the CD rate + 2.00%, to keep your cash.
You’ll have the car and your $15,000 at the end of the CD loan term.
re: Take out car loan at 3.9%?Posted by Joshjrn on 3/14/23 at 8:57 pm to LSUFanHouston
on 3/14/23 at 8:57 pm to LSUFanHoustonquote:
Wait... the car is free??
Car salesmen hate this one weird trick...
quote:
You’re basically paying interest on a CD-secured loan, which is usually the CD rate + 2.00%, to keep your cash.
You’ll have the car and your $15,000 at the end of the CD loan term.
Why would you still have your 15k cash at the end of the loan term?
How is the CD loan being paid off to release it from custody?
This post was edited on 3/14 at 9:48 pm
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