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I would hate to take 20K cash and buy a car and a emergency comes up and all my cash just went into that car. I think its better to just pay the car off over 1-2 years at a very low APR than just give out cash like that upfront.
What if you pay $15k cash for a car and it gets wrecked and the insurance company thinks its only worth $11-12K, you loose $2-3000 automatically. Cars are deprecating assets, cash isnt.
Even if you do, you'd rather invest it on something that would appreciate in value rather than dropping that $ on a depreciating asset.
Me, I'd rather dribble out $200 a month for a lease of the same car and make the $20k (hopefully) turn into $23k after 3 years.
Cash is king. Payments are for chumps and the ignorant.
Paying cash for ANYTHING is always better than being in debt! I don't care what someone has to argue. The whole point of being in debt is OWNERSHIP! Until you've paid off the debt, you don't own a damn thing. Miss a couple of payments and see who winds up with it.
If you are a smart saver (that means you know how to manipulate living below your means), then you shouldn't concern yourself with driving right away. a smart saver is fine with waiting or even knows how to earn extra cash to expedite the saving process. Problem is, we live in a society of entitled people who think that just because they have a job and good credit, then they are entitled to have a new car.
No wonder there are so many repossessions in this country and these are people who had great credit, otherwise, they wouldn't have been able to get financed. They think that just because they have been at their jobs for some years, everything will be fine, NOTHING is guaranteed in life and NOONE is irreplaceable. This is even worse if you pay down payment, and then it gets repossessed.
Well I for one am glad that doctors across the country didn't save up to pay for med school before they went. Can you imagine how many years you'd have to spend saving the $200,000 it takes to get your MD? What ten years? That's ten less years you get to use that medical education, and forgetting the issues that would have on healthcare, the economic impact to the individual is great.
I'd trade $200,000 in debt and a $200,000 salary for 40 years over zero debt and a $200,000 salary over 30 years.
New cars are depreciation machines. Buy a 3-5 year old car for less than half the cost of an equivalent new one, for cash, and then you're talking. Unless you can write it off, a new car (purchased, leased, or financed) is nothing but you paying a whole lot of money for new car smell.
New cars are depreciation machines. Buy a 3-5 year old car for less than half the cost of an equivalent new one, for cash, and then you're talking. Unless you can write it off, a new car (purchased, leased, or financed) is nothing but you paying a whole lot of money for new car smell.
You need to run the numbers each and every time. That old adage doesn't necessarily apply in the post-cash for clunkers environment. There are certain vehicles (some Hondas and Toyotas which do not depreciate much, so the 3 yr old version is only 5-10% less than the brand new one).
In 2010, I was able to buy a 5 yr old Ford Expedition for 30% of MSRP (doubt initial purchaser paid MSRP though). Fast forward to now and in order to pay 30% of MSRP, I'm looking at 7-8 yr old versions with 125K miles.
Cash is king. Payments are for chumps and the ignorant. Anyone who can buy outright should. The whole financing process is a mess and they look at EVERYTHING including how much money you make, how long you have been at your job, whether you pay rent, live free or mortgage, your credit report needs to be flawless. You are expected to pay a downpayment, but what if 1 year down the road, you lose your job? Good bye car and down payment down the drain.
Let's say you want a Camaro, Mustang or $20,000 type of car, and your credit and income doesn't measure up? You cannot afford it and it will leave you frustrated, but with cash you can buy ANY car you want, you are not constrained by their stupid rules, you simply have to be patient.
They say with financing you usually buy a "better" car than you would have while using cash, but in reality, with financing you usually buy a more expensive car than you can afford. When you commit to a long term payment over paying cash, you are not factoring risk. When you pay cash, you pay for what you can afford, but when you finance, you typically commit to more than you can afford.
Paying cash for ANYTHING is always better than being in debt! I don't care what someone has to argue. The whole point of being in debt is OWNERSHIP! Until you've paid off the debt, you don't own a damn thing. Miss a couple of payments and see who winds up with it.
If you are a smart saver (that means you know how to manipulate living below your means), then you shouldn't concern yourself with driving right away. a smart saver is fine with waiting or even knows how to earn extra cash to expedite the saving process. Problem is, we live in a society of entitled people who think that just because they have a job and good credit, then they are entitled to have a new car.
No wonder there are so many repossessions in this country and these are people who had great credit, otherwise, they wouldn't have been able to get financed. They think that just because they have been at their jobs for some years, everything will be fine, NOTHING is guaranteed in life and NOONE is irreplaceable. This is even worse if you pay down payment, and then it gets repossessed.
New cars are depreciation machines. Buy a 3-5 year old car for less than half the cost of an equivalent new one, for cash, and then you're talking. Unless you can write it off, a new car (purchased, leased, or financed) is nothing but you paying a whole lot of money for new car smell.
But that's just that.
I'm not buying an investment, I'm buying a car.
Be it for commuting or for leisure, the car is a tool.
And why pay cash for something that has no advantage to paying cash?
This is a tool that will last seven years no problem, and if I could get zero percent for those seven years I would have the loan last seven years, but the best I can count on is 0% for 60 months.
Now if it was $4,000 cash back or 0% apr I certainly would pay cash, but rarely is it that way, plus dealers get kickbacks for financing and thus you'll get a better deal financing. Of course in theory with cash you could skip the who F&I transaction, but those guys are slick and will try and get ya anyways.
ANYONE that thinks they are "making money" buying a new car is CRAZY!
Car dealerships cover their overhead, their rent, their payroll and their equipment and buildings based on the money they collect!
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