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I agree with this, and personally would never ask or worry about how someone pay for a car in cash. It's just not my business and see it as a personal thing. And how would anybody know, I would never put that out there that I paid for my car in cash.
I don't think anyone here really "worries" about how anyone pays for anything. It's not like we sit there biting our nails tossing in our sleep hoping Happy Rider is financially secure. Just like expect from him not to have restless nights. He asked how some have the ability to pay for a car cash and where we "find" it. And when he didn't like the answer all of the sudden making payments/leasing/borrowing strategy was "better" somehow and some of our buying strategy was "wrong". I have no idea about OP his finances needs wants or desires. I really don't give a hoot if he leases a new 850I every month for the rest of his life and goes on 40k vacations.
Last edited by Electrician4you; 07-04-2014 at 02:31 PM..
"I always pay cash. Once I buy a car I start saving for the next one that I will be buying cash in 5-10yrs"
Ummm am I missing something or is this called. ." a car payment" lol. If you're putting away money every month that you're going to use for a future car purchase then no matter which way u slice it it's the same as a car payment!
"I always pay cash. Once I buy a car I start saving for the next one that I will be buying cash in 5-10yrs"
Ummm am I missing something or is this called. ." a car payment" lol. If you're putting away money every month that you're going to use for a future car purchase then no matter which way u slice it it's the same as a car payment!
Yup you are missing something. It is nothing like a typical car payment.
Yup you are missing something. It is nothing like a typical car payment.
Ok I have tier 1 credit. What the difference between a zero interest finance and saving the money myself over the course of 5yrs and paying cash?
If today you started saving $416 today per month for 60 months for a $25,000 car, while today I go and finance a $25,000 with 0% APR and pay $416/month for 60 months. Can you please explain how you dont have a car payment or how does it differ from what I'm doing?
Last edited by louie0406; 07-04-2014 at 03:12 PM..
Ok I have tier 1 credit. What the difference between a zero interest finance and saving the money myself over the course of 5yrs and paying cash?
If today you started saving $416 today per month for 60 months for a $25,000 car, while today I go and finance a $25,000 with 0% APR and pay $416/month for 60 months. Can you please explain how you dont have a car payment or how does it differ from what I'm doing?
Because I have the option of making that payment or not. You don't. I have a voluntary car payment since I'm my own bank in that sense. You HAVE to make that payment. You don't get to say I guess I don't want to make my car payment this month.And if your income stream dries up or slows due to job loss downsizing or pay reduction you will have a harder time to make all those zero interest payments. And the money I'm putting aside for 60 months is gaining interest. Your money is gaining nothing over that 60 months. And I'm speaking strictly your payment vs my payment. You simply technically "caught" up with me at the 60 month mark of your car payment and my placing money under my mattress. So yes if I simply placed 416 bucks in my mattress and you paid on a car we would be in a zero gain with you having the "advantage" of a used car that may be worth whatever thousands. Somewhat. But even then you have a depreciating asset and I still have $24,960 and my old car. That's if I put my money in my mattress. And while you have a car worth 5-6k due to depreciation and wear possibly less if the car is not popular. I would have 27,581 at a modest conservative 4% in a account. And my original vehicle. And in that 60 months whose to say interest rates don't go up?
Last edited by Electrician4you; 07-04-2014 at 04:17 PM..
When I bought my first new car, I gutted my savings account because I refused to finance the purchase. Having $25K in your bank account isn't (or shouldn't be, I should say) all that unusual for someone earning a decent salary.
Her grandfather passed and she came into 25k inheritance.
She used part for a downpayment on a new BMW and took a trip to Europe... overspent in Europe and eventually couldn't keep up on her car expenses and it was repossessed...
She did not use any of the money to pay down debt or for a rainy day fund.
That inheritance was a total waste according to her... in her words she was rich and spent accordingly.
Her rent was getting later and later and eventually I told her she had to move and she did.
$25,000 making 8% a year, is a $2,000 ROI. $2,000 x 5 years = $10,000 ROI potential.
5 year auto loans with 2.5% interest, is $625 a year. $625 x 5 years = 5 years = $3,125 in interest.
$10,000-$3,125 = $6,875 of earning potential if you invested that $25K.
So it's dumb to have $25K tied up in a car. Smart people don't pay cash for cars. They lease or finance when interest rates are low.
People who have $25K+ in liquid assets saved for a really long time, make a lot of money, or had a large windfall. Or a combo of the three.
Your idea makes sense—although your numbers are quite a bit off—yet the freedom and peace of mind that come with "owing no man anything" is absolutely priceless.
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