Anyone else paying in cash/full?
 

I started a thread somewhere here a year ago about who else was saving up for the FR-S/BRZ. I had about 10k then, and now I'm a little over 24k and still saving. I'm still waiting for a test drive, and I've been patient since 2009 so I'm almost there!

Anyways, is anyone else going to pay for their FR-S/BRZ in full? I'm not sure which options I'm getting but i think I'll buy something off the lot at about $27-28k. What are your thoughts?

Take out a loan at 2%. But your $30k in to an S&P index mutual fund, Apole stock, or whatever you prefer and make much more than then 2% you're payin. I purchased 29 shared of AAPL last month. It's gone up 20% already.

YMMV!

Brett

I have enough cash to cover around 25k, but now it seems I will have to finance.

If I finance I might as well finance a nicer car - soo... duno.

Unless you're independently wealthy, never pay cash for a car that is depreciating.

Like the above user commented, invest it. It will more than cover your interest rate and your loan will help you establish credit. You sound young, so it will help you in the long run. GL.

I hope you all understand that investing carry with it certain risks. Don't make it sound like its a sure thing. Trust me.

been saving since 2008 5k each year and its 2012 its like 400 a month or something like that, easy to save :D

ill prob be buying in full. made 40k from sept-dec 2012.

+1

Take that $30K and by some Apple stocks (AAPL) like he said. It's going to be $1600 a share by 2015! Why spend $30K on a depreciating object like a car. Finance or lease it.

In my 1.5 years of employment since college I've racked up a mere 4k for my car fund, what can I say, other stuff takes priority like student loans.

I would caution anyone about taking financial advice especially about which stocks to invest in from an internet forum.

While which specific stocks to invest in may not be the wises idea of which to listen to, overall, the advice is sound. There is no point in NOT financing when interest rates are as low as they are when you can take the 20k and get more than 2-3% return.

I agree, I've said in other threads look at CDs which are one of the safest investments you can make, and compare with your auto loan. Talk to your bank they will assign you a financial adviser and might point you towards funds which have guaranteed rate of returns above 2%.

The premise of losing opportunity cost by spending capital on a deprecating asset is sound. But the advise that should be followed is to educate yourself about the financial situation and not invest in Apple and get rich.

Please, tell me, Sensei, your investment secret to 100% GUARANTEE the ROI never fails to exceed the interest rate of borrowing money. I could retire tomorrow if I had that secret.

i used to buy all my cars cash (even bought my bmw cash) but since then ive been better off investing and then financing at .9-2% depending on the deals at the time. plus it keeps more cash available for random stuff if needed.

Duh. Like I said: YMMV!

However, the S&P has averages about 12% per year for about 80 years. If that tanks faster than the value of your car, we have major problems, and I hope you can all garden, hunt, and build a fire! :)

Brett

The S&P is currently below where it was in 2006, and is also below the peak in 2000. It is simply incorrect to say that anyone can expect 10% average returns over any length of time with the S&P. Past performance does not indicate future returns.

past performance is not an indicator of future returns...wait a minute.

You're right. I picked a lousy example. Guilty as charged. I still stand by the concept. Its not the path for everyone, but it has worked for me.

There is certainly risk, and you should invest according to your risk tolerance. If you did this in about 2008 you would've been most unlucky, and probably wouldn't have done well at all. Again your mileage may vary!

Brett

There is no 100% guarantee, but you know you will lose a huge chunk of your "investment" in your car immediately. If we had 100% guarantee of ROI then we'd all be rich(or poor since we'd all have money). You can probably take 20k and invest it in some funds that will give you more than a 2-3% yield. I PERSONALLY am not a stock trader, I just know there are wiser ways to spend 25k. I'd personally rather spend it on my house.

Why do people consider buying a car an investment? Its not. If you end up making money selling your old vehicle then you got lucky. Of course you should expect losing some money as soon as you drive the car off the lot because it is now used. Do you expect to make money on a TV set after you take it out of the box and used it?

Brains

Toyota stock is pretty strong. Starting just a few months after the rumors and leaks hit the internet (thanksgiving) the stock climbed by almost 40%. Alot of that gain is from the success of strong sales such as the prius and speculation about the FRS.

The question to ask yourself is "Do you see the FRS as a game-changer for toyota?" or do you think that they shot themselves in the foot with the newly released pricing.


The leaks on this forum are a gold-mine for investors looking to increase their odds. It is important to gather intel.

I think financing with a good down payment is the best way to go, at least for me.

A mid 20s dude who has a job and is finishing college.

I probably wouldn't advise anyone to take all their cash and put it in a car. If that is your position, finance it. Do it so that your monthly payments do not impact your ability to continue saving.

At the very least, you should continue to put the max in your 401k (that your employer will match).

You need to get approved for those low APR's. Not everyone has good credit, while others have little or no credit history.

That side of the coin also isn't as black and white a you make it sound.

All my other cars are paid in full, this will be my first financed car, im only financing if i dont sell my 240sx before i need to pay the dealer. If i sell it i will be paying cash.

damn I think dropping $25k cash is retarded on a car specially with this economy. Unless you have tons more cash to spare but if you only have $25k mmmm. I'd rather end up paying more due to financing and have all that money in my pocket in case something happens.
to each their own.

I like how everybody is always saying " invest your money" like it's a sure thing. It's a gamble period.

If I buy a car in cash I make sure I have a good amount of money left over. Like when I bought my RSX for 12k used I had a couple extra thousands in my savings. I'm so good with money I don't even remember asking anybody for money since I was a kid with no job and now I am 27. I love to save regardless.

If a person is diligent enough to save enough to purchase a new car, chances are good that they also have stellar credit.

Brett

I'm sorry, but suggesting someone to the only purchase one stock with their potential years of savings is idiotic. Apple isn't the second coming of whoever you believe in. Diversification is the key to any well balanced portfolio.

I actually like to do long calls and puts on the S&P 500 because of this. Fairly predictable to generate a decent return most of the time. That said, not like i haven't lost it all on a bad play.

DISCLAIMER: Options are extremely risky to those considering it.

well it's better (could be. diversify suckas) than throwing all of it into a depreciating commodity such as an automobile

Assumptions much?

Financing the car as others have suggested is by far the best financial move. There are investment options out there where you can geta guaranteed rate of return which will probably cover your interest rate.

That said, if you are the type of person who has a hard time being responsible with your money then financing may not be a good idea. Some people just can't help themselves....they would see this pile of cash sitting in the bank and then go blow it on things they don't need or can't really afford, thus spending the money they were supposed to use to make the car payments.

If you fall into the latter category don't finance it, but my guess is that if the OP has saved 24k in the time period he specified then he probably has enough self control and should finance the car.

Financing the car as others have suggested is by far the best financial move. There are investment options out there where you can geta guaranteed rate of return which will probably cover your interest rate.

That said, if you are the type of person who has a hard time being responsible with your money then financing may not be a good idea. Some people just can't help themselves....they would see this pile of cash sitting in the bank and then go blow it on things they don't need or can't really afford, thus spending the money they were supposed to use to make the car payments.

If you fall into the latter category don't finance it, but my guess is that if the OP has saved 24k in the time period he specified then he probably has enough self control and should finance the car.

A gamble with incredibly good odds, especially if you are young and have tax free investment opportunities.

I don't know of any 30 year period where the market declined, and that seems to be the minimum that most of those asking about cash/financing appear to be looking at for retirement.

I was talking about the people that could. I think even in the case of bad credit it might be a good idea to get a car loan anyways to help build it. If you can afford the car flat out and you have bad credit, I would take the opportunity of a car loan to help improve your credit and pay a lot more than the payments and put enough towards the principal but make it so it would take about 1-2 years to pay off the car so that you don't pay 10k in interest but still get a nice boost to your credit score.

That's a matter of opinion and personal preference/philosophy.

Alternatively, you could pay cash for the car, take the "car payment' and dollar cost average it into a good set of mutual funds, and in the end, end up with more money because you can put it in higher yielding investments. Do that long enough between cars and your next car may already be paid for by the time you need it, including paying taxes on the earnings, which you did not mention.

Also, its almost never a good financial decision to purchase a new car. Buying a 1 to 2 year old car, which will most likely still be under warranty, is nearly always a better option. In fact, it is typically cheaper to repair your existing car than to ever buy a new car.

Example, I could swap the engine with a new crate engine (and probably upgrade it to a V8) in my 2001 Chevy Astro every year for the annual car payment cost that folks will pay on the FR-S if they finance it and make monthly payments.

But before you do either of these methods, you need to have an emergency fund to get you through, well emergencies. If you don't, you need to do that first, before you save 1 penny towards either method (cash for a car or financing).

Again, there's nothing wrong with either method and arguments can be made on both sides that its the "best financial decision". In the end the best financial decision is the one that lets you sleep at night.

Two things I follow:

1. Never buy brand new car- especially the first year... Unanticipated problems, immediate depreciation, dealer markups, etc

2. Finance big expenditures- like others said, keep cash for emergencies and investments. A diversified portfolio is key.