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The problem is, you're equating "financing" with "poor".
Have you not noticed that I have never questioned your or PerfZ's logic when it comes to financing? That is because I agree that there are numerous reasons why someone would finance instead of paying cash. Outside of the net interest margin example that you gave, many people would rather have the peace of mind knowing that they have sufficient money in savings if the chit hits the fan. I have two of my cars financed for that exact reason. I work in a specialized field and replacing my job wouldn't happen overnight if I lost it. So we have 6 months worth of bills in a savings account. I could have use that instead of financing, but with so many people unemployed I wanted to play it safe.
But I don't really see what any of this has to do with my original comment to the person that said "18 when "I" bought it". I highly doubt that you, PerfZ and I are in the same financial position as an 18 year old is. Do you think he didn't want to cash in his investments to pay for his car?
Originally Posted by FineWine
Your argument really falls apart when you consider that many automakers offer 0% APR over the life of the loan on new vehicles. In your mind it's smarter to pay everything up front than it is to pay everything over 4 years and collect the interest on those tens of thousands of dollars. Im currently shopping around for 0% APR on a car for my wife. There's no point in pulling money from my investments when they're gaining interest to pay for something that's going to cost $0 to finance.
In many instances, it would be smarter to take the cash back incentive and finance with your own lender than it is to go with 0% financing. Example, let's say the dealership is offering 0% or $2,500 cash back on a $20,000 car. You would pay less by getting a 4.75% car loan at the local credit union for the 4 year term that you mentioned. You would only end up paying $19,248 and save $1,748 over the 0% option.
I thought somebody wanted to see an age group. Well I'm 58, and got the Z as a daily driver. It's my second one, 1st was a 280, then known as a Datsun............
