Great nugget of advice. ...Really delivered in a persuasive manor, too.

 

This was the first and hopefully last car that was financed. For the next car, hopefully I'll be paying cash.

 

as opposed to...a victorian or hampton manor?

 

I hear this silly advice all the time.

If you have the cash just sitting around to buy a car, you are either a fool or so rich that you can afford to waste your money. Your cash should be off working to make you more money, not sitting around in huge piles by the thousands.

So that means that if you are going to buy anything (car, house, lawnmower, wedding, best dinner ever), then you have to decide "can I borrow this money for less than I lose if I take it from my investments?" If the answer is "yes", then borrow it. If the answer is "no", then take it out of your investments.

If you have no investments, then maybe you ought to think twice about buying the car.

It's not whether you borrow or pay cash that's important, it's actually just the question of whether you can afford the purchase at all.

 

Many factors.

- What kind of interest rate you can get. Borrowing money can be cheap or very expensive.

- Do you plan to make big purchases soon and don't want to have debt on your credit.

- Do you need to complete a loan to improve your credit history?

- and foremost, if shit hits the fan will you be upside down on a loan?

Overall, I dont think borrowing money to pay for a luxury item such as a two seater convertible is a best idea, especially if you will be paying on it till 20012. Borrowing money for a year or two on a slightly used car at half the cost of a new one will make much more sense.

Problem with borrowing on a new car is so much money gets wasted. You have a tremendous depreciation, and you are paying thousands in interest on top of that. So once its all set and done, you will probably be waisting about 25K in 3 o 4 years of financing a new car. (15K in car depreciation, 6 - 7 K in interest, and sales tax)

My .02

 

So basically you're saying that everyone in this world needs to be driving around in a $3000 POS, because the average person probably couldn't save more than that to purchase a car when they need one.

People like you amuse me. You're probably one of those people that had a hard time understanding why the people in New Orleans didn't just leave.

When you've been around money for too long, you loose touch with the realities of real life.

I still remember when I only made enough money to pay my bills and at the end of the month, I only had $200 left for gas and food and emergencies.

 

But all that money is wasted if you don't borrow, too. The depreciation has nothing to do with the borrowing, it's just a fact of life of buying a new car. So it's only the interest that's a function of borrowing. And if you are making 10% on your investments but it costs 6% to borrow, then you would be silly not to borrow.

If it's the other way around, then of course you shouldn't borrow.

 

Only reason people borrow money, cause they are impatient. Instead of saving for 3-4 years they want it all now. What if you put savings into a CD, and save up for 3 years. Have money earn interest and then buy car cash payed? Dont you think thats a better idea?

 

Ditto

 

I guess it doesn't matter when my sugar mom paid all at once for me...
well i'm paying back little by little... except with 0% interest.














*warning* I'm not spoiled