Quote:
Originally Posted by 86fanatic
Talk to your bank, there are 3%+ guaranteed rate return funds out there even today. There are plenty of relatively safe stock investments which pay 3%+ dividends a year as well. There's plenty of 1.7% 5 year CDs out now, which are considered the safest but also tend to have a lower return.
I'll say it again, if you have good credit with the lending situation what it is today, paying cash for a car makes no financial sense.
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Right. But people must still have an APR lower than these dividends, stocks, savings and CD's. Most people won't be getting under 3% APR I think.
For those getting above 2-3% APR it makes sense to pay in full rather than the gamble and hassle of the investment route and all the paperwork with it. If the returns were double the APR then t would be worth the effort.
I'd like to point out that a 1% return on a $1000 CD is mere pennies over $10 earned after a year. Using a $5k down payment and borrowing $20k means we're talking about just over $200 a year in investment returns for every 1% you were lucky enough to find. Subtracted of course from the APR %. Pocket change difference.