/dev/null Posted October 30, 2010 Share Posted October 30, 2010 So hypothecially speaking, and this is hypothetical as I have not gotten an estimate on damages yet... If you had to absolutely positively had to buy a new car. And you had the money in the bank to pay cash (not hypothecial because I can) Would you pay cash or finance? Link to comment Share on other sites More sharing options...
erynthered Posted October 30, 2010 Share Posted October 30, 2010 So hypothecially speaking, and this is hypothetical as I have not gotten an estimate on damages yet... If you had to absolutely positively had to buy a new car. And you had the money in the bank to pay cash (not hypothecial because I can) Would you pay cash or finance? No offense. But use yourmoney on something that appreacites rather than depreacites. Sorry for the spelling, I'm not checking it tonight. If you have enough money as you've eluded to, you can set up an account, or a CD securing the debt and take a loan out against the debt, at maybe 1 or 2 % of the earning of the account that been set up. Right now money is cheap. You're a smart guy Dev, do your home work. Link to comment Share on other sites More sharing options...
Just Jack Posted October 30, 2010 Share Posted October 30, 2010 New new? Or new to you? Personally, if you can swing it with cash and not hurt yourself financially, why not pay cash? If you finance, there's interest on the loan to be paid. Plus you may get a better price going all cash. I did see an article a couple weeks ago that new car pricing was better than a 1-2 year old used car, I just can't find it right now. Found it.... Some New Cars Now Cheaper Than Used Cars Link to comment Share on other sites More sharing options...
erynthered Posted October 30, 2010 Share Posted October 30, 2010 New new? Or new to you? Personally, if you can swing it with cash and not hurt yourself financially, why not pay cash? If you finance, there's interest on the loan to be paid. Plus you may get a better price going all cash. I did see an article a couple weeks ago that new car pricing was better than a 1-2 year old used car, I just can't find it right now. Found it.... Some New Cars Now Cheaper Than Used Cars WRONG!! Keep your cash. Use their MONEY. Who taught you people anything about financing anything, Christ!! Link to comment Share on other sites More sharing options...
Just Jack Posted October 30, 2010 Share Posted October 30, 2010 WRONG!! Keep your cash. Use their MONEY. Who taught you people anything about financing anything, Christ!! As someone who has financed a lot over the years, I'd rather not have the monthly reminder in my mailbox that I owe money, if I can buy something outright instead. Link to comment Share on other sites More sharing options...
erynthered Posted October 30, 2010 Share Posted October 30, 2010 As someone who has financed a lot over the years, I'd rather not have the monthly reminder in my mailbox that I owe money, if I can buy something outright instead. We're talking about a car. IT loses its value. You can have all the experence in the world with regard to financing but still not know ****. Like you. Taking your cash and paying for a car with cash is foolish. It loses its value. Do I need to give you an economics lesson? Link to comment Share on other sites More sharing options...
boyst Posted October 30, 2010 Share Posted October 30, 2010 I bought a F350 cash. I decided at my age, 29, it was safer for me to purchase the vehicle with cash rather than finance it. I buy everything on credit card, never missed a payment. So, if it was a smaller payment or I wwas more financially stable I would have used someone elses money. Just my $.02. Link to comment Share on other sites More sharing options...
Just Jack Posted October 30, 2010 Share Posted October 30, 2010 (edited) Taking your cash and paying for a car with cash is foolish. It loses its value. Do I need to give you an economics lesson? Go ahead. Explain to me how if I have the cash available to pay for something outright, I shouldn't. Edited October 30, 2010 by Just Jack Link to comment Share on other sites More sharing options...
erynthered Posted October 30, 2010 Share Posted October 30, 2010 Go ahead. Explain to me how if I have the cash available to pay for something outright, I shouldn't. I though I kind of touched on that a couple of posts ago, guess you didnt catch that drift. Though you do have a history. Check with your financial advisor, as I'm not allowed to give any more advice than I've already given. Though comon sense does help. Link to comment Share on other sites More sharing options...
eSJayDee Posted October 30, 2010 Share Posted October 30, 2010 Depends on the rates/terms. I just got a CPO w/ 0.9 for 2 yrs. For that, yes. When I looked seems like "fair" rates were ~5%. At 5%, no, I'd use cash. Link to comment Share on other sites More sharing options...
erynthered Posted October 30, 2010 Share Posted October 30, 2010 Depends on the rates/terms. I just got a CPO w/ 0.9 for 2 yrs. For that, yes. When I looked seems like "fair" rates were ~5%. At 5%, no, I'd use cash. WHAT!!!!!!!!!!!!!!!!!!!!!!! <Just Jack> Link to comment Share on other sites More sharing options...
Dr. Fong Posted October 30, 2010 Share Posted October 30, 2010 Go ahead. Explain to me how if I have the cash available to pay for something outright, I shouldn't. If you might want to buy something else with that money. If you might be able to invest it in something that could earn higher interest than you pay on your auto loan. If you run into bad times financially and might need a nice lump of cash to get you through the tough times. Link to comment Share on other sites More sharing options...
Just Jack Posted October 30, 2010 Share Posted October 30, 2010 WHAT!!!!!!!!!!!!!!!!!!!!!!! Certified Pre-Owned at .9% for the first two years of the loan, while a standard used car bank loan is about 5%. If you might want to buy something else with that money. If you might be able to invest it in something that could earn higher interest than you pay on your auto loan. If you run into bad times financially and might need a nice lump of cash to get you through the tough times. I already know all that. All it comes down to is if I have the money to pay for a vehicle outright, why shouldn't I? I'm not the type to change vehicles every three years. I'm driving a 12 year old truck, that doesn't look that old, maybe 5-6 years, because I take care of my stuff. My TV is 13 years old. I could run out and buy a new 60" 3-D one, but why bother? The prices keep going down. I'll use this one till it dies. Link to comment Share on other sites More sharing options...
erynthered Posted October 30, 2010 Share Posted October 30, 2010 Certified Pre-Owned at .9% for the first two years of the loan, while a standard used car bank loan is about 5%. I already know all that. All it comes down to is if I have the money to pay for a vehicle outright, why shouldn't I? I'm not the type to change vehicles every three years. I'm driving a 12 year old truck, that doesn't look that old, maybe 5-6 years, because I take care of my stuff. My TV is 13 years old. I could run out and buy a new 60" 3-D one, but why bother? The prices keep going down. I'll use this one till it dies. Short version....... OK, I'll try it like I teach my 9 year old. If you have10K in cash, and you want to buy a car. Your bank is offering 10% on a CD You take that 10K and put in in said CD. You take a loan out against said CD at 2% lower that what you're earning. 8% That means you're paying 2% for your loan against your money. At the end of the term you have all your money plus the 2% and what ever value there is with the car that you bought. Get it? Link to comment Share on other sites More sharing options...
DC Tom Posted October 30, 2010 Share Posted October 30, 2010 So hypothecially speaking, and this is hypothetical as I have not gotten an estimate on damages yet... If you had to absolutely positively had to buy a new car. And you had the money in the bank to pay cash (not hypothecial because I can) Would you pay cash or finance? It depends. Figure a $30k car...you finance it, over the life of the loan (let's say five years), you pay $45k...but the car depreciates. At the end of the loan, you've paid $45k for a $20k asset. Pay cash, you pay $30k up front for a $20k asset in five years. Either way, you lose equity...you lose less paying cash. EXCEPT...there's an opportunity cost in paying cash, namely, that the cash is no longer available for investment. Say you invest the $30k in relatively safe muni bonds at 8%, and finance the car. At the end of the five year term, you've paid $45k for a $20k asset...but have made about $14k back on bond interest, so you've just about broken even. Obviously, those numbers are for example purposes only. Equally obviously, I've simplified things to illustrate the trade-offs - there's lots of other variables I could throw in (for example: you might pay $30k to finance, but $28k cash.) But your basic trade-off is: do you want to pay cash for a depreciating asset and save yourself the interest costs, or do you want to leverage your cash flow to purchase the asset (and I'm all for leveraging cash flow - to a point. A very low point.) And don't forget: buying a year-old used car saves a ton of money, since the first year's depreciation was already eaten by some other owner. Our truck is actually worth more now than we paid for it two years ago, partially for that reason. Link to comment Share on other sites More sharing options...
erynthered Posted October 30, 2010 Share Posted October 30, 2010 It depends. Figure a $30k car...you finance it, over the life of the loan (let's say five years), you pay $45k...but the car depreciates. At the end of the loan, you've paid $45k for a $20k asset. Pay cash, you pay $30k up front for a $20k asset in five years. Either way, you lose equity...you lose less paying cash. EXCEPT...there's an opportunity cost in paying cash, namely, that the cash is no longer available for investment. Say you invest the $30k in relatively safe muni bonds at 8%, and finance the car. At the end of the five year term, you've paid $45k for a $20k asset...but have made about $14k back on bond interest, so you've just about broken even. Obviously, those numbers are for example purposes only. Equally obviously, I've simplified things to illustrate the trade-offs - there's lots of other variables I could throw in (for example: you might pay $30k to finance, but $28k cash.) But your basic trade-off is: do you want to pay cash for a depreciating asset and save yourself the interest costs, or do you want to leverage your cash flow to purchase the asset (and I'm all for leveraging cash flow - to a point. A very low point.) And don't forget: buying a year-old used car saves a ton of money, since the first year's depreciation was already eaten by some other owner. Our truck is actually worth more now than we paid for it two years ago, partially for that reason. Nothing like taking both side of the debate. though thats nothing new with you. Pussssy., Link to comment Share on other sites More sharing options...
DC Tom Posted October 30, 2010 Share Posted October 30, 2010 Nothing like taking both side of the debate. though thats nothing new with you. Pussssy., I'm not debating anything, I'm clarifying the options so he can make his own decision. And even if I were debating, using made-up numbers as an example is not "taking both sides", it's using an example. So go have another case of beer, you !@#$ing numbskull. Link to comment Share on other sites More sharing options...
EC-Bills Posted October 30, 2010 Share Posted October 30, 2010 (edited) ...Pussssy. Speaking of which, you seem to have some sand in yours... Edited October 30, 2010 by EC-Bills Link to comment Share on other sites More sharing options...
ajzepp Posted October 30, 2010 Share Posted October 30, 2010 And don't forget: buying a year-old used car saves a ton of money, since the first year's depreciation was already eaten by some other owner. Our truck is actually worth more now than we paid for it two years ago, partially for that reason. My last two cars have been used, and I've have good results. I don't know that I'll buy new again any time soon. Link to comment Share on other sites More sharing options...
eSJayDee Posted October 30, 2010 Share Posted October 30, 2010 Certified Pre-Owned at .9% for the first two years of the loan, while a standard used car bank loan is about 5%. Yeah, what he said. (Although to clarify, it WAS a 2 yr loan. If you wanted longer duration, the rate went up.) And my reasoning is somewhat like Jacks. I paid some cash (was in a Money Mkt making 0.5%) & borrowed the rest. The 0.9% was less than I'd be making in whatever investments I'd need to liquidate to pay for the car. Link to comment Share on other sites More sharing options...
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