Cash Vs Bank

irv0735

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It's interesting how the psychological factor plays a role for so many people. If you take the question to a financial advisor, looking at it analytically, there is a clear recommendation that they will give you. However, so many people have different risk tolerance levels and apparently psychological blocks that will skew how they look at purchasing. I'm an analytical person and never realized some of the other thought processes that people have. Interesting thread...





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BP Bronco

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To each their own, but you’d rather take your cash and put it into a depreciating asset? The Truck will depreciate the same whether you finance a little, half or all. With good credit a loan from a credit union should be less than 3% and you can easily make that on your cash just about anywhere you put it and you get to hold on to your cash So you’re not really in debt. You can make extra payments any time. The increased monthly payments come from the cash you kept for yourself, rather than tied up in the truck.

I respect the emotional position people take on wanting less payment, no debt, etc, but the math indicates we’d be better off taking out low interest loans with little down payment.

Then again, most of us are buying brand new Broncos, probably at a markup and will depreciate $5k by driving off the lot, so we aren’t making the best financial decision anyway :)
Yes I would sooner take cash and make a larger down payment. If I were to sell it in a year or two I don’t want to be writing a check to sell it. Did that once, didn’t like the feeling.
I don’t disagree with your math but everyone has their own set of reasons and way they manage their money. If I were to make the prudent financial decision I shouldn’t even buy one. I already have 9 vehicles and need another vehicle like I need another hole in my head.
 

Brocked

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I can afford to pay cash, but Always use other people’s money at low cost. Interests rates are super low. You can make more money smartly investing the cash and take a loan. Can always pay it off or more each month. IMHO
 

eastbaybronco

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This is possibly going to be my first new vehicle purchase. I plan on putting down a big down payment, then financing the balance with my Credit Union. Where do I start first, the dealer or bank?
 

LarryZiegler

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This is possibly going to be my first new vehicle purchase. I plan on putting down a big down payment, then financing the balance with my Credit Union. Where do I start first, the dealer or bank?
Get yourself pre-approved at your Credit Union first, that way you know the exact terms of the loan you are getting before negotiating the vehicle cost. When you have to sit in front of the Finance Person to sign the paperwork and turn down the offered dealer spiffs, you have just sped up the process of them going through the finance process, but they will still collect your pertinent data in case your financing were to fall through. The dealer typically gives you 5-7 days to complete your outside financing and your Credit Union typically wants a copy of the purchase contract to complete the finance of the purchase.
 

stufarmer

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I may, or may not buy anything next year. Borrowing money only remains affordable when our Economy remains Strong. Period .. If you have cash, it's foolish to spend $40,000 when your retirement investments are dwindling. We can't afford another national crisis.
 

Scohin

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I'm planning on saving about 5.5k and I have my Fusion which is completely paid off for a trade in and finance the rest
 

eastbaybronco

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Get yourself pre-approved at your Credit Union first, that way you know the exact terms of the loan you are getting before negotiating the vehicle cost. When you have to sit in front of the Finance Person to sign the paperwork and turn down the offered dealer spiffs, you have just sped up the process of them going through the finance process, but they will still collect your pertinent data in case your financing were to fall through. The dealer typically gives you 5-7 days to complete your outside financing and your Credit Union typically wants a copy of the purchase contract to complete the finance of the purchase.
Thanks for the tips, I will pay a visit to my Credit Union soon.
 

Texas Sunshine

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Any one plan to save for the purchase ?
In my country banks required 20% down payment with around 2.5% to 3.5% interest rate for cars ..
My sweet spot is to pay 40% then 4 years but in this case we know we need to wait 1-2 years so what is your plan ?

Paying cash in full ?
Sell your current car ?
Trad it with the bronco then pay the deference ? ( not good idea )
Bank ? Personal loan, car loan, property loan ...


Your idea may help someone lets share it
My current vehicle is paid for and will have some warranty left on it. If I can't get a no interest loan, I'll pay cash for the difference. Not a fan of debt.
 

AZHUND

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I found out about ~6 vehicle purchases ago that making car payments makes me hate the car.

Plus I found out paying cash upfront really helps making decisions about what options/trim/upgrades are "worth" to you when you view them in terms of $k for whatever it is versus "just $5 more a month" as the sleazy finance guy tries to trick you into thinking.
 

GABAR

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Here in the US, the vast majority of people take out a car loan for 3-7 years after their down payment.

All though there are some, very few people purchase a vehicle out right in cash.
 

MesquiteTim

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Walking into the dealer with a pre approval from any other source puts you in the drivers seat. I always go in professing a cash no trade in deal. Then I let them try to convince me to finance. I will likely use x plan and pay cash this time.
 

JonD

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Any one plan to save for the purchase ?
In my country banks required 20% down payment with around 2.5% to 3.5% interest rate for cars ..
My sweet spot is to pay 40% then 4 years but in this case we know we need to wait 1-2 years so what is your plan ?

Paying cash in full ?
Sell your current car ?
Trad it with the bronco then pay the deference ? ( not good idea )
Bank ? Personal loan, car loan, property loan ...


Your idea may help someone lets share it
20k down and 48 month finance
 

damarble

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I have a decent union job and make out pretty good but I would have had to start saving a lot sooner to bring 50k cash in. I think I can put 10k together pretty easily before delivery day though and that will make the payment a lot more comfortable.
 

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