How did you purchase your car? Finance or cash?

[tzhu07]

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...

[mac3194]

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

[Vincenttam]

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

[tzhu07]

Originally Posted by mac3194

Not everybody can shell out about $25k cash...

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.

[whatsinaname]

Originally Posted by tzhu07

With my 2014 model, I paid in cash.

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

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]

[tzhu07]

Originally Posted by whatsinaname

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.

[Mallow]

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.

[tzhu07]

Originally Posted by Mallow

...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.

[tobin]

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

[Mallow]

Originally Posted by tzhu07

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.

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.

[funwheeldrive]

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

[Burrcold]

Originally Posted by Mallow

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 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.

[Mallow]

Originally Posted by Burrcold

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...

[Burrcold]

Originally Posted by Mallow

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.