How did you purchase your car? Finance or cash?

[TM]

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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[Ammunition]

Originally Posted by ZionsWrath

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

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

[whoster]

I'm leasing.

[carbonBLUE]

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 (just speaking for myself), and a car is not one of them. But that's a much deeper discussion...

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...

[Prog]

Originally Posted by trevorovert

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 )

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.

[marky]

mine went a little something like this

[Ocala FR-S]

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.

[dro]

put down 7,500

financed 21k @ 4.5%

lifes too short to worry abt money

[FRSoxfan]

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

[stock]

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]

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

[OICU812]

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.

[Andrew025]

Originally Posted by Prog

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

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

[humfrz]

Well, like they say in the "old Army" ..... "depends on the situation".

I paid cash ($200) for my first car, which was used (drove it for 10 years); paid cash for my second car, which was new ($1,300) (drove it for 12 years); financed a bunch of cars in between; paid cash for my last car (my FR-S).

No, WAIT ..... It can't be my LAST car ...... I haven't had a BUICK yet ..... !!!




humfrz

[OICU812]

Originally Posted by humfrz

Well, like they say in the "old Army" ..... "depends on the situation".

I paid cash ($200) for my first car, which was used (drove it for 10 years); paid cash for my second car, which was new ($1,300) (drove it for 12 years); financed a bunch of cars in between; paid cash for my last car (my FR-S).

No, WAIT ..... It can't be my LAST car ...... I haven't had a BUICK yet ..... !!!




humfrz

You're far too young for this to be your last car soldier!!!