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Credit unions around here are doing 5.49% up to 48 mos. One is even doing 3.99% but only for 24 mos. I wasn't going to finance (half of mine is already paid through an early trade-in) but at that rate I can keep my cash working at 5.35% and just deal with a payment for a couple of years.
Make sure you have a refi plan for later in the term when rates are less. Some credit unions for example, will not refi their own loans. So if you take a loan at 7% now, and in two years the rate is 5%, you can't refi it through the same lender. You have to be prepared to refi with a second lender.
Credit unions around here are doing 5.49% up to 48 mos. One is even doing 3.99% but only for 24 mos. I wasn't going to finance (half of mine is already paid through an early trade-in) but at that rate I can keep my cash working at 5.35% and just deal with a payment for a couple of years.
Technically that 5.35% your cash earns is less than that since you need to pay taxes on it. So 5.35% is reduced by anywhere from 10 to 37% depending on your income.
Technically that 5.35% your cash earns is less than that since you need to pay taxes on it. So 5.35% is reduced by anywhere from 10 to 37% depending on your income.
With the loan above, one would pay $3,009.97 monthly and the total interest paid over 5 years would be <!--td {border: 1px solid #cccccc;}br {mso-data-placement:same-cell;}-->$22,598.09 with the following interest rate breakdown:
<!--td {border: 1px solid #cccccc;}br {mso-data-placement:same-cell;}-->Interest in year 1 $7,823.97
Interest in year 2 $6,260.58
Interest in year 3 $4,610.82
Interest in year 4 $2,869.91
Interest in year 5 $1,032.80
I ran a laddered CD scenario as well as a scenario with FTABX (no federal income tax). CDs interest earned have to pay state and federal taxes in the year of the earnings, not at maturity.
Assumptions for investments:
12 month CD ladder with staggered investments every year reduced by $36K ($3K * 12 months)
CD rate of 5.61% APY right now, reducing by 1% by end of 2024 (see fed notes from today) and reducing further 1% by end of 2025
For CD assumes 37% federal and 11.3% CA state income tax
FTABX dividend yield of 3%, does not account for returns when selling FTABX
Am I missing something, or is this just a cash grab by the dealer?
CPO 36 Mo Lease - 2020 C4S 9K miles
$136K
54% Residual (seems like excessive depreciation from year 3 to 6)
.0045 Money Factor (10.4% interest)
I have never seen a used car closed-end lease I thought was a good deal (at least on cars a mortal like I can afford). Using your figures that is about $2,700 a month for a car that will be out of warranty. No thanks.
July 714th 2023 when I got my loan for 120k I had a rate of 5.85
I will need to refinance as soon as rates go down to under 3
This is with USAA, and Tier 1 credit.
12-13-2023, 05:10 PM
