Paying in cash vs. financing?

[shirker]

I got to wondering since I'm going through the process right now, how did everyone else pay for their BRZ?

I'm pretty excited about my $254 under-invoice price and 0.74% 48 month financing (especially considering this is a college graduation present to myself)

[kALMIGHTY]

How did you get that crazy low 0.74%. I haven't seen anything lower than 4.99% here in Canada where I live.

[Kelbyat07]

If you don't mind me asking, how much extra are you paying by the end of 48 months?

[chaoskaze]

0.74%? Do it.

[shirker]

Just realized I forgot leasing as an option...oops.

Originally Posted by kALMIGHTY

How did you get that crazy low 0.74%. I haven't seen anything lower than 4.99% here in Canada where I live.

PenFed (Pentagon Federal CU) offers a 0.74% rate on new cars bought through their free "car buying service" that are financed for 48 months or less

Originally Posted by Kelbyat07

If you don't mind me asking, how much extra are you paying by the end of 48 months?

Don't mind at all - just a dollar shy of $380 in total interest

[jimmillion]

I take it NoVA doesn't stand for Nova Scotia the small easterly province on Canada's coast...

[mav1178]

No two people can offer you the right answer. It all comes down to what your "time value of money" equals.

If you have nothing better to do with your money and see a car as an investment, buy it outright. You take the risk of keeping it in good running order and/or avoiding damage, and you can sell later and get back your investment (minus depreciation.)

If you can invest the money and can get better than a 2% return, finance it. Any ROI percentage over your "time value of money" (interest plus inflation, rounded to 1% for sake of simplicity here) would be better off in the long run.

Everyone's answer will be different. YMMV.

-alex

[mav1178]

Originally Posted by jimmillion

I take it NoVA doesn't stand for Nova Scotia the small easterly province on Canada's coast...

NoVA = Northern Virginia.

-alex

[forzajuve]

I put 10 down and financed the rest over 6 years, however, I am planning on paying it off in 3-4 years. Making it 6 years just made my monthly payments dramatically lower. I know some people finance over 7-10 years, but over 6 years seems a little much.

[Sc0ob_do0D]

10(ish) down, financed the rest over 60 months

[suaveflooder]

I financed the car because I was stupid at the time. I started reading some financial books right around the same time I bought the car that opened my eyes to how stupid it is to finance. I'm at 2.49%, paying somewhere around $2000 a month right now. Just trying to pay her off ASAP. I should have just been patient and paid cash. The car really is cheap enough to pay for in cash with a little patience.

edit: Damn....margaritas own me (cinco de mayo). I have an FRS. Sorry guys

[a2cpc]

Financed a car thru a second mortgage deal a few years ago. 2.9% and I can right it off taxes.

[Mitch]

Originally Posted by suaveflooder

I financed the car because I was stupid at the time. I started reading some financial books right around the same time I bought the car that opened my eyes to how stupid it is to finance. I'm at 2.49%, paying somewhere around $2000 a month right now. Just trying to pay her off ASAP. I should have just been patient and paid cash. The car really is cheap enough to pay for in cash with a little patience.

edit: Damn....margaritas own me (cinco de mayo). I have an FRS. Sorry guys

Jesus. Did you finance over 12 months with no money down?

[rmjjensen]

DO NOT PAY CASH! DO NOT DO NOT DO NOT - it is completely foolish right now.

The cost to borrow money is so cheap now you need to take advantage of it (assuming you can actually afford the car). Assuming you borrow $27.5k @ 0.74% / 48 months ...you'd pay $580 in interest over 4 years - that's $12/mo ...in the meantime, take your $27.5k and buy some corporate bonds (perhaps the new Apple issuance) - you'll make a lot more than $580 over 4 years...