Anyone financing? What rates are you getting?

[Nate Train]

I paid in cash. Won't ever do another auto loan.

Sponsored

 

[RHeinz]

...The current inflation rate which came out this morning is a tick over 3%...

Yup….exactly! But inflation is cumulative.

 

[BroncoA512021]

If the inflation is 10% to 20%, your investments are not beating a 6% or 7% rate.

Current inflation rate is @ 3.2%

 

[BroncoA512021]

Wow! make additional on your payments if you can!

Based on 50K loan:

Total of 84 monthly payments	$64,919.38​
Total interest	$14,919.38​

84 months = Can not afford the car in the first place.....

 

[BroncoA512021]

My Fidelity account managed over 11% in 2023. But I have a money manager making the decisions, I don't have that skill.

And I paid cash for my Bronco. I don't like owing anybody anything. It gives me peace of mind.

Gratuitous photo of mine out in Middle-of-Nowhere Idaho:

so far, 2024 is even better!

 

[prospectfour]

My Fidelity account managed over 11% in 2023. But I have a money manager making the decisions, I don't have that skill.

And I paid cash for my Bronco. I don't like owing anybody anything. It gives me peace of mind.

Gratuitous photo of mine out in Middle-of-Nowhere Idaho:

I know it's not "smart" to turn down cheap money and put yours to work elsewhere. But my grandfather was the same way, never wanted a loan for anything. He had a Gen5 Bronco that belonged to him and not the bank!

 

[prospectfour]

Sure it does. If I can make more money with my cash invested than I can save through finance rates, then I'll gladly pay later. The depreciation of the vehicle is less important than the devaluation of the dollar. Sure, I like paying for stuff up front, but I like making money even more. Kinda like the people who think getting a tax refund is a good thing, not everyone manages their money to make money.

It's not wrong to pay cash, but it's not always the correct choice if you are concerned about wealth. For many people, being debt free is more important than having more money. That's not a bad thing. Many people can't handle debt. For those that can though, using your money to make money will grow your accounts far more than just paying cash for stuff.

Let me put it to you this way. If you knew you could invest everything you had and make 10% returns, wouldn't you borrow as much as you could at 3% to invest? I know, it's a gamble, but it takes money to make money and giving all your money to Ford only makes Ford money.

You're 100% correct in your definition of opportunity cost. I think there's a human element to debt we can't quantify. I chose to pay off my student loans at 2.X% interest not because it made financial sense but I wanted to put that part of my life behind me now that I have a family. I'm sure I could have dragged it out another 10-15 years but I was done with it...

 

[Rspayde]

You're 100% correct in your definition of opportunity cost. I think there's a human element to debt we can't quantify. I chose to pay off my student loans at 2.X% interest not because it made financial sense but I wanted to put that part of my life behind me now that I have a family. I'm sure I could have dragged it out another 10-15 years but I was done with it...

There is a huge amount of discipline that it takes to just pay off the loan rather than taking the "well it is only x $ per month approach". Most people just stretch themselves so thin with payments that they cannot afford to lump sum a payment on a loan anyways. If you are truly able to leverage the market and better your financial position by borrowing then great. But for 95% of people the opportunity excuse argument is just an excuse they feed themselves.

 

[RHeinz]

Current inflation rate is @ 3.2%

Yes, for the last 12 months. Thank god it is going down somewhat… If you go back to the previous 12 months, the inflation rate was 9%(?). 9+3 =12. So If you go back over the last 24 months, the dollar has dropped in value around 12%, probably more. Go back farther and it’s worse. A car loan is typically 4 to 5 years. What is the cumulative inflation rate over that period? Ugly!

 

[Fmuguira]

Negotiate best purchase price or whatever agreement was if you ordered and; Write the Check …….!

 

[Onestepmore]

So I need to take delivery on my Bronco this week. I've financed all my more recent vehicles as the rate has always been below 2% which I can easily beat even with conservative investments. However its now looking like ~6% is the going rate which I could only beat by being more aggressive which I don't really have the stomach for. Is anyone getting much better than 6%? I'm thinking about just writing a check for this one.

I'm in St. Louis, MO and the local dealer gave me 5.25% for 5 years...

 

[Mjasi3]

for 60mo Chase bank wanted 6.54 and credit union wanted 5.85

 

[SoDak1623]

84 months = Can not afford the car in the first place.....

This quip really gets touted a lot even though it is heavily dependent on the rates and price. I took an 84 month loan at 1.99 in April of 2022. The interest paid is peanuts over the life of the loan, and I don't plan on selling or trading my bronco at all.

 

[WLDCATR]

3.99%

 

[BroncoA512021]

This quip really gets touted a lot even though it is heavily dependent on the rates and price. I took an 84 month loan at 1.99 in April of 2022. The interest paid is peanuts over the life of the loan, and I don't plan on selling or trading my bronco at all.

1.99 is way better than what folks are getting today... Sadly most people think they are entitles to expensive cars and do not do the math..... 84 months is good at less than 2% but insane at 7 %

Sponsored