How did you purchase your car? Finance or cash?
 

With my 2014 model, I paid in cash.

There are only a few things in life worth getting into debt over (just speaking for myself), and a car is not one of them. But that's a much deeper discussion...

Not everybody can shell out about $25k cash... Just sayin, I financed my 2014 whiteout

Parent threw in the down payment, I'm paying for it through work while going to school =)

Yes, I'm well aware that most people finance new car purchases. But as I grew up I developed my own philosophies regarding personal finances. Within the topic of debt, I promised myself never to go into it over a car, no matter how much I liked a particular model.

If couldn't afford to pay cash for my FR-S, I would've waited until I saved up enough, or just purchase a cheaper car.

Why would you pay cash when the loan is at 2-3%* and any decent investment will give you 5-10%+ return.


[* or lower if you have a great credit score; which you should if you can afford to pay cash]

Yes, I'm aware that investing money to the point that it can outrun debt interest is a legitimate strategy. However, I think with matters like this, it's a very personal choice given factors that are specific to each individual situation. Well, I've thought about it, and cash was the way to go for me.

I got 1.9% financing so I financed, to me it's not smart to throw in $25000 into a depreciating asset, I'd rather finance it at a low rate so that if there is ever some sort of an emergency I still have more than enough funds in the bank to deal with it.

Ah yes, I always keep a comfy reserve of liquid cash as well. My account certainly did not drain down to zero after I bought my car. :thumbsup:

I bought two of them with cash, and drove one into a lake just because I felt like it.

It's not about being close to zero, I wouldn't have been either, I just don't see it being a good thing dumping that much cash into a depreciating asset when I got 1.9% financing. I would rather have more money in the bank making money, then to put $25k into something that loses money by the day. I come from a very well off family and my parents won't even buy cars cash because there are better things to do with that money, anyone with good credit can get a good enough rate to cancel out the risk of losing funds, especially if you know how to make smart investments. I guess to each his own, it all depends on how you manage your finances, but with $25k cash in my account, I can make more than 1.9% through investments to cancel out what i'm "losing" by financing the car.

I put 10k down, financed the rest at 1.9%

I agree completely. I have the exact debates with my mother-in-law all the time (she purchased a Hyundai Santa Fe for cash, because she didn't want the "debt looming over her head" as she's going into retirement. My argument was that they were offering 0% financing for 4 years at the time. Why you wouldn't take advantage of a free loan is beyond me.

Wow... she's going into retirement? That is the worst time to dump that much cash into something that's losing value...

To be fair, this will probably be her last car so resale is not an issue, and she has plenty of money in the bank (and a completely paid off house). It still just irks me to see free money being thrown away, regardless of ones situation. To each their I own I suppose. It's all about comfort levels.

i put 12k down, financed the rest at 1,9

If you have more than enough cash for the car, mortgage, daily living, emergency funds and does not feel comfortable being charged interest for nothing (albeit you can invest and earn more but that's not 100% guaranteed), then why not?

How did you purchase your car? Finance or cash?
 

I'd say finance to the shortest term lowest interest rate possible. Put down enough cash so that you are not upside down on your loan when you roll off the lot. Blowing all your cash on a depreciating asset is not a good idea to me.

Finance. I'm young and don't have stacks of cash :iono:

I hope the last car I drive before I die is more exciting that a Santa Fe. If I couldn't do a sports car in old age I'd probably go for some kind of truck and lift it so I can do oil changes from my mobility scooter.

She's a 65 year old woman that couldn't care less about cars.

I waited and saved it up, since I'm going to school I cant have insane monthly payments. :)

Where the heck are you getting 5-10% guaranteed return over the same period time as a car loan?

I can't stand when people say stuff like this.

You aren't going into debt. Your car is an ASSET. The only way you're going into debt is if you put 0 down.

there is no guaranteed 5-10% anywhere. we'd all be rich if there was.

there are definitely ways to confidently get 6-7% yearly, and relatively safely

That is an incredibly financially irresponsible reaction to OP's post.

If you are going to owe anyone money, you're going into debt. An asset is something you own. In fact, one of the definitions of "asset" is something that has value that can be used to repay debts.

"Relatively safely" equates to there being some risk, though. If you cannot guarantee a return, then you can't make the claim (I realize it was another poster and not you) that 5-10% interest is available for you without throwing in the disclaimer that you may actually lose money.

wut.

Yeah you owe someone money.. but you turn around and sell the car and you have the money to pay for it..

your last sentence. Asset (car) has value, can be used to repay debt ( car loan )

Financed - I think that I got a fantastic rate on the APR, and even if I could pay in full with cash I wouldn't do that in case of a medical, or other emergency/disaster where paying a lot at once may be my only option. Since I have options with my car, and this is my first major purchase, I'm glad that I'm financing it and therefore I have the opportunity to establish/build good credit (I'm 26).

Shouldnt credit be good enough if you got a fantastic APR?

I was financing a new BRZ at 1.75% apr. Totaled the car. Got a slightly used one that is much newer than the one I totaled and paid in full, since it was a private deal.


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My parent co-signed with me to get me a 2.54% APR.

I'm leasing.

Could have paid cash but financed the last 10k, I need to build credit as I don't have any because I always buy everything in cash lol...

How did you purchase your car? Finance or cash?
 

And how much money do you lose in that process? Your $25k car will turn into $27k or $30k whatever the terms of the loan are. You are paying more for something because you can't afford it, so you keep yourself in that loop by constantly going into debt for things you can't afford.

If you have the money to pay for a car in full and you have some guaranteed way to make more interest on that money than you'd pay in financing, hell, perfect, go for it. Otherwise, no one should be kidding themselves that going into debt for a new car is a good idea when there are plenty of reliable used options.

mine went a little something like this :lol:http://i274.photobucket.com/albums/j...ps562d0412.jpg

For those distracted by the irrelevant, you should realize that the fact that the car depreciates or loses value is not a factor that enters into the cash or finance decision. The loss from depreciation is realized by the owner buying the car whether by cash or debt proceeds. The cash or finance choice does nothing to change that. In this decision scenario, the ownership of a depreciating car is a given and not one of the decision factors.

It is true that you should weigh your potential investment returns by not paying cash against the potential interest savings by not financing. The interest savings by not financing are guaranteed. You would be hard pressed to find an equally guaranteed rate of return in a 5 year investment. Forget the zero % or other discount financing fallacies, the financing costs are then built into the price of the car. Always. The pure price guarantee notwithstanding, these cars are selling for under sticker every day. So yes, you can negotiate a cash price.

That said, we are free to take our chances and the investment risk may pay off. I bought mine for cash, because I had enough (enough cash and enough of my 10 year old Camry). Then I also had to replace a 13 year old 4 Runner with a new Highlander. I financed that, but for none of the above reasons except I didn't have the cash on hand. I contribute to a 401K and a Roth IRA. I'll probably (only probably) earn investment returns at or better than the cost of the debt. However, I will enjoy tax benefits that could not be regained if I skipped and missed out on tax sheltered retirement contributions to purchase a vehicle for cash. Now there's a sure reason to finance.

put down 7,500

financed 21k @ 4.5%

lifes too short to worry abt money

Financed the Frs then paid it off a few months later. Wanted to build credit.

Good point, but...
Perhaps he has no credit. If you pay cash 24/7, no credit.

This is more then just whether you can pay for it all at once or finance. Either way in the end as you get older you realize strong credit rating is as or more important then your balance. Everyone has a different view on such things and needs also of course. A car is not an investment and not always a need either.

That said I really love these little cars overall and they're worth their money IMO compared to what else it out there in that range.

Stocks... if you know what to do.
I get a guaranteed return of at least 5%