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Don't take out car loans...buy a car you can afford. It is a real simple rule to follow for life. Bottom line is if you own it the bank cant take it back. When the car industry started they never allowed car loans...it was forbidden. Then Chevy (if I recall correctly) started allowing auto financing...Ford held out the longest but eventually had to succumb to the changing industry to stay alive.
Car loans and car leases are just dumb and bad for the consumer. Why do you think every freaking car commercial shows lease payments. Because it is best for us? No...I dont think so.
Swear to pay cash for cars and in the long run you will have come out ahead...always.
At 0%? Yes.
Took out car loan, on a car a could afford, kept my investments where they were. Doesn't matter to me if bank can take it back. I tend to actually pay my obligations so that's a non-issue. If you're not responsible enough to make the payments I can see how that would be a big advantage, however.
Loans are great, leases are great for some people. Use what's best for you. I drive too many miles for leasing to be a good option.
And no, you wouldn't. You'll always come out ahead paying 0% interest simply due to inflation, however. Opportunity cost also should be considered.
Uh, yes. It's called trading on margin and its done all the time.
Paying with cash certainly has its place, but the reasons you're listing are rooted in emotion and psychology, not economics.
If you can get a promotional 0.9% APR, you'd be pretty silly to pay cash for a vehicle instead of financing it with nearly free money.
Put all that capital that would otherwise be tied up in your car (an asset is generally a pretty bad place to be storing money anyway, which is exactly what you're doing when you pay with cash) and invest it in a reasonable index fund. You'll be paying 0.9% in order to make 6% or so. That's a no brainer.
Exactly how many people qualify for that 0%? Its a great strategy if you have the money. Someone who has 30k cash to buy a car already allocated that money to the purchase and most likely has other investments making them money.
Sure if you can get a 0%-.9% interest rate ok buy as you stated.
pay off early or not, you will be paying full amount. The total out of the door price already factored in the 7.5% interest rates. So whether you pay it today or in the future...the total amount is what you paid.
The key of getting a good deal when purchasing new car is the total value of the car after all financing is DONE. If you need me to put into math, let me know.
The deal is already sealed. I would learn a lesson and pay the car monthly, don't have to give them the fat check instead use the money you have to invest to make some % back.
pay off early or not, you will be paying full amount. The total out of the door price already factored in the 7.5% interest rates. So whether you pay it today or in the future...the total amount is what you paid.
The key of getting a good deal when purchasing new car is the total value of the car after all financing is DONE. If you need me to put into math, let me know.
The deal is already sealed. I would learn a lesson and pay the car monthly, don't have to give them the fat check instead use the money you have to invest to make some % back.
Eh? Unless you're borrowing from a lender that requires the full interest amount due if you pay off the principle early (and unless you're borrowing from Fat Tony, that shouldn't be an issue), you are absolutely saving a clear and quantifiable amount of money by paying off a non-0% interest loan early.
The question is whether or not it's worth it. If you have a very low interest rate, then I would say you're not doing any good by paying it off early as the money is practically free. You can take that large lump payment that you would have used to pay off the car and instead invest it in a modest index fund and get returns that more than cancel out your interest rate.
Although if your interest is in the 4% or 5% or higher, that's where it becomes better to simply pay it off faster.
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