I really needed mine! Male menopause cure.:bonk:

I'm with you Brother!

I had also hoped it would cure baldness, but that didn't happen. Might have needed an LSA for that.

Hey, I'm not trying to beat you up here (sometimes it's hard to not come off as rude when rebutting), but...
In both situations, you own the depreciating asset. The car is going to drop say $15,000 over the next 5 years, regardless of whether you borrowed on it or not. If you borrow the money, you'll pay $1,886 in interest on the loan, and your $25,000 will earn you $1,612. Can you explain precisely where you're picking up the $274 difference, plus whatever additional return that makes borrowing the money the smart thing to do? Granted, the difference isn't all that great, but I still don't follow your math...

Reading this really struck close to home.

My advice, if you don't have a spare 500 dollars coming in to the bank each month...don't do it. That being said, you can probably figure out a good way to do it lol. Priorities.

It is all in time value of money. A 3% inflation rate (slightly below average historically) makes your money worth less and less as time goes on. So in effect, a ~3% interest rate is offset by the fact that the present value of the car payment is nearly 16% lower 5 years in the future. Investing that money protects against the inflationary drop (CDs are ripoffs, there are better ways to invest your money that are extremely safe, liquid, and can still get a 4-6% return).

Don't get stuck on CDs here. That is the wrong way to look at the issue. The issue is sticking your money in something that loses 10% a year or putting your money in something that gains __% a year and pay off a loan that costs $X in interest per year. There is a crossover point where one is more advantageous than the other. It can vary greatly through the percentages and the years involved. So one person that gets a 1% interest rate on the loan for the car and can get 4% return on investment has a different answer than a person who gets a 6% interest rate on a loans, but can only get a return of 2%.

This is getting pretty far off topic here, I have thread jacked enough. I will quit discussing this publicly for the sake of this thread and OP. The theory is out there, if people want to absorb it and use it that is their choice. If they want to ignore it that is there choice. I don't care either way, not my life. If any of you want to continue discussing this with me, PM me.

Agreed, if you can get a return on your money that's higher than the rate at which you're borrowing, it's a no-brainer. I thought the original question was phrased based on crappy CD rates... If you've got a safe place (FDIC insured) to stick money that will yield better than 4%, go for it!!

I still don't see what the rate of inflation has to do with this calculus though... Can you show me the actual mathematical formula that shows where you're money ahead? I understand that the payment will be relatively less in 5 years due to inflation, but how it actually impacts your return is beyond me.

For example, here are my formulas (I used the 1.25% return, just to keep it simple). Perhaps you could add in the missing variables.

Option 1: I purchase the car with cash and every month, instead of making a payment, I deposit an equivalent amount into an account yielding 1.25%. At the end of the 5 years, I have a car worth say, $10,000, and I have $27,728 in cash.
Option 2: I borrow on the car, and invest my $25,000 at 1.25%. At the end of the 5 years, I have a car worth $10,000, and I have $26,608 in cash.

Add the inflation to my #'s, so I can see what I'm missing...

Don't do it. You have living expenses that seem to outstrip more than you can save. Adding the car will only make you that much more in debt.

I like the car but didn't buy it strictly because I didn't want more than 50% of my after tax income to be eaten by expenses.

Seriously, don't do it OP.

+1 please do yourself a favor,and don't buy this car.
it's just a car.you car is fine for you,and you own it! you are way ahead of many,many
people,why would you f**k this up! stay out of debt as much as you can,because you do NOT know to a certainty WHAT lies ahead! don't f**k up your life over a car! think this through!..ok?