View Poll Results: did you pay Cash Finance or Lease
Paid cash
62
53.91%
Financed
28
24.35%
Leased
25
21.74%
Voters: 115. You may not vote on this poll
did you pay Cash Finance or Lease
03-11-2019, 04:10 PM
#137
Three Wheelin'
I paid cash...........
03-11-2019, 04:31 PM
#138
Drifting
I financed my Nissan Xterra when I was living paycheck to paycheck as a resident. I leased my next three cars and leased to owned the last of those three (my GTS). For my totally unnecessary cherry on top car (GT3T), I am buying it outright. I agree with superdog and the others - there is no right or wrong answer with this topic. Just what works best for you, your financial situation and your peace of mind.
03-11-2019, 05:02 PM
#139
You're talking out both sides of your mouth.First you say... Interest on a car loan is good because you have more money in the market making 10% to 20%, Then you say ... interest on a margin account is bad, too much interest for the long-hall.
Why is paying interest on a 100K car loan any different than paying interest on $100K margin account? You are making way more than the margin interest.
Whether you pay cash for the car or take a loan your net worth does not change. Of course the car is depreciating so your net worth is going down if all else stays the same.
Enjoy your car. Drive safely and be happy.
Why is paying interest on a 100K car loan any different than paying interest on $100K margin account? You are making way more than the margin interest.
Whether you pay cash for the car or take a loan your net worth does not change. Of course the car is depreciating so your net worth is going down if all else stays the same.
Enjoy your car. Drive safely and be happy.
I personally don't use margin, though I have a margin account so that I can buy and sell without waiting for money to settle. I'll buy stocks with money I know I can afford to lose, however buying with margin you can get really screwed owing more than you put in.
Net worth = assets (including cash). I consider a car a liability. Dropping 100k on a car = net worth dropped 100k. 2k per month payment = 2k per month net worth drop.
03-11-2019, 05:29 PM
#140
I said sometimes it doesn't make sense to margin longer term. Depends on the interest rate you have on the margin account... its going to be more than car loan for sure. If you're trying to get 10% from a stock and margin is 9%... Using margin for investment is COMPLETELY different than buying a car with cash or using a loan. With margin you're using bank's money to increase your capacity to buy... with car loan you're increasing your ability to have cash to do the former.
I personally don't use margin, though I have a margin account so that I can buy and sell without waiting for money to settle. I'll buy stocks with money I know I can afford to lose, however buying with margin you can get really screwed owing more than you put in.
Net worth = assets (including cash). I consider a car a liability. Dropping 100k on a car = net worth dropped 100k. 2k per month payment = 2k per month net worth drop.
I personally don't use margin, though I have a margin account so that I can buy and sell without waiting for money to settle. I'll buy stocks with money I know I can afford to lose, however buying with margin you can get really screwed owing more than you put in.
Net worth = assets (including cash). I consider a car a liability. Dropping 100k on a car = net worth dropped 100k. 2k per month payment = 2k per month net worth drop.
Net worth is assets - liabilities. You can have your own opinion but you can't have your own facts. a car is an asset, a depreciating asset, but an asset.
Person one
500K savings. the buy a Porsche for $150K cash.
Net worth = $500K ($350K savings and a car worth $150K)
Person two
$500K savings. they buy a Porsche for $150 loan.
Net worth = $500K ($500k - $150k loan + car $150K)
Exact same after the purchase. Where people cheat on their net worth is they have a $150K Porsche for 5 years, and they put its value at $140k when its more like $70k. Again in both cases the depreciation is the same.
You might want to check the interest charged on margin. If you are paying 9% you need a new brokerage account.
03-11-2019, 05:35 PM
#141
Pro
The only remaining question then is: If your car has a nubbin, should you lease, finance or buy outright?
Actually - don't answer that - I'm just joshing.
03-11-2019, 05:36 PM
#142
I'm going to put my earlier response another way.
I'm retired and we live off a "large" age 70 Social Security income, plus 4 little pensions, plus RMDs from our IRAs. I have a chunk in shorter term bonds, but don't like longer term bond interest rate or credit risk, so I lean a little toward lower volatility ETFs with higher dividend rates, along with our base Total Stock Market, commercial REIT (but not shopping mall), and healthcare/biotech ETF investments. My thinking is that tech has already had a very strong run and already is well represented in our VTI ETF base investment.
And we have significant Roth IRA accounts because I do my own investment and tax planning, and we had several occasions over the years to do Roth Conversions when our taxes would be low (or zero after Hurricane Katrina).
So, I don't mind taking out an auto loan for 1.99 or 2.49%, while leaving intact our assets in diversified ETFs paying 4% or more.
Does this help y'all understand our 'borrowing to buy a car' ??
I'm retired and we live off a "large" age 70 Social Security income, plus 4 little pensions, plus RMDs from our IRAs. I have a chunk in shorter term bonds, but don't like longer term bond interest rate or credit risk, so I lean a little toward lower volatility ETFs with higher dividend rates, along with our base Total Stock Market, commercial REIT (but not shopping mall), and healthcare/biotech ETF investments. My thinking is that tech has already had a very strong run and already is well represented in our VTI ETF base investment.
And we have significant Roth IRA accounts because I do my own investment and tax planning, and we had several occasions over the years to do Roth Conversions when our taxes would be low (or zero after Hurricane Katrina).
So, I don't mind taking out an auto loan for 1.99 or 2.49%, while leaving intact our assets in diversified ETFs paying 4% or more.
Does this help y'all understand our 'borrowing to buy a car' ??
Any debt comes with risk which no one has mentioned. Job loss, DOW tanks, sickness, injury...the list is endless.
03-11-2019, 09:22 PM
#143
Rennlist Member
This is an old thread and I'm surprised about the number of people who pay cash. Paying cash for a 100k+ car is stupid IMO.
Cash gives you a buffer if your financial situation goes to crap (lost job, medical, investment gone bad etc etc). It can be invested to earn more etc.
You can finance a car for 2-4% today...That is easy to make in the stock market in less than a week. Unless you're really clueless or pay a retard to manage your money 10-20% gains per year are easy. Dumping cash into a new car that loses 20% per year is as Dave Ramsey says 'stoooooopiiied.'
If you're buying older used cars and slowly upgrading, paying cash from 'saved depreciation' can make sense. Never will it make sense for a brand new Porsche.
Leasing is also a rip off unless you're the type that likes to trade in every 2 years and limit miles. Its never cheaper than financing longer term.
Best thing to do is to finance with the longest term (between 60-70 months today), lowest interest rate (between 3-4% today), and least down payment possible (typically banks want 20%). Save or invest your cash. Keep and drive the car 5+ years or don't buy.
Cash gives you a buffer if your financial situation goes to crap (lost job, medical, investment gone bad etc etc). It can be invested to earn more etc.
You can finance a car for 2-4% today...That is easy to make in the stock market in less than a week. Unless you're really clueless or pay a retard to manage your money 10-20% gains per year are easy. Dumping cash into a new car that loses 20% per year is as Dave Ramsey says 'stoooooopiiied.'
If you're buying older used cars and slowly upgrading, paying cash from 'saved depreciation' can make sense. Never will it make sense for a brand new Porsche.
Leasing is also a rip off unless you're the type that likes to trade in every 2 years and limit miles. Its never cheaper than financing longer term.
Best thing to do is to finance with the longest term (between 60-70 months today), lowest interest rate (between 3-4% today), and least down payment possible (typically banks want 20%). Save or invest your cash. Keep and drive the car 5+ years or don't buy.
03-14-2019, 02:38 PM
#145
Banned
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03-14-2019, 04:41 PM
#146
03-14-2019, 06:43 PM
#148
Paid cash. Although with a lease I feel that I would drive the car with less concern and not be as worried about someone crashing into me, and there is some missed 'enjoyment' value to that.
03-14-2019, 10:57 PM
#149
I find this thread amusing. I expect that the vast majority of people on this thread are financially secure, and don't require financial advice from others.
The interesting thing about Bernie Madoff is that wealthy people had to beg him to take their money. I suspect that these investors believed that it is possible to get a consistent 20% return.
The interesting thing about Bernie Madoff is that wealthy people had to beg him to take their money. I suspect that these investors believed that it is possible to get a consistent 20% return.
03-14-2019, 11:09 PM
#150
Rennlist Member
I financed and loved using other peoples money to drive such a fine automobile.
With finance rates they way they are I actually made money by keeping it in the market vs tying it up in a depreciating asset.
