Did you finance or pay cash?

[gocats132]

Financed through my credit union for 1.2% after putting 20% down. It’s free money

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[Stewdee55]

I did cash because I have lived that Dave Ramsey ( ish) life for so long that I don't have a credit score to be able to even get financing.

Same here. Lol. So long 6 figure checking acct.

 

[FlyingBronco]

Yes, but often nigh net worth people and high cash on hand people have zero credit because they don't have cards or mortgage. Can't get those rates with sub 800 credit scores that come with utilization of debt

Not having credit cards in the very least is kind of dumb. Those people can easily get a card that gives reward points and pay it off in full, every month. It’s a win-win, you build credit and also collect rewards. If you are rich and spend a lot, you get even more rewards, would be crazy not to do it! Lol

 

[DrewBronc21]

The only circumstances where you should pay cash for a new car:

1. You have cash to burn and it doesn't materially impact your financial situation
2. You have poor credit and can't get decent financing - at least 5% or less. Most can get 2.5% rn.
3. You are not good at budgeting and default risk is high

Outside of that, you can get a much better return on your cash through other investment options. I'm a financial planner and that is always the question to ask yourself - where do you get the best return on your cash?

Nobody wants to listen to this unfortunately. I’m guilty of it too having almost paid off a low interest 6 year loan on my Subbie in like 18 months. It’s purely emotional. People don’t want to feel like they owe even if they have the cash working for them and can pay off that debt at any time .

With the Bronco, I’m gonna stick with the math and keep the cash.

Yes there’s risk but my 5 year returns have been good, like 8%+.

 

[Stewdee55]

If there are people that paid cash I'm going to question their intelligence level with penfed giving 0.99% APR loans there are literally high yield savings accounts with higher than 0.99% return. Unless you're keeping your DTI low for other reasons, have terrible credit, or enjoy throwing money down the drain it makes zero sense.

Edit: Retirement is the worst excuse one could have for paying cash for the car lol. In retirement, any income no matter how small is even MORE important than those working.

I understand this is a generational thing. Many boomers grew up to 12% mortgages and 15% auto loans, but times have changed. Borrowing money is nearly free these days, and inflation is at record levels. You absolutely should have a significant rainy day fund, but keeping tens of thousands or hundreds of thousands of dollars in cash (instead of safe CD's, high yield savings accounts, or bonds) is the best way to get left behind in 2022.

Your opinion. I have a 6 figure cash based biz. No income tax like you pay ever year to the feds. At 20 to 30% of your income. And droending on the state, state tax. No credit and lack of showing an income means..I pay cash! Not about intelligence. My math is fine.

 

[M&M Beer]

I did cash because I have lived that Dave Ramsey ( ish) life for so long that I don't have a credit score to be able to even get financing.

If your going Dave R then why did you buy new?

 

[M&M Beer]

Cash. Getting ready to retire. most likely my last vehicle.

Same with me

 

[DrewBronc21]

Your opinion. I have a 6 figure cash based biz. No income tax like you pay ever year to the feds. At 20 to 30% of your income. And droending on the state, state tax. No credit and lack of showing an income means..I pay cash! Not about intelligence. My math is fine.

Where do you live that you don’t have to pay taxes? That’s amazing

 

[Stewdee55]

Where do you live that you don’t have to pay taxes? That’s amazing

WA. No income tax. Sales tax .

 

[‘21OBX]

I wanted to pay cash, but my dealer said I wasn't "allowed" to do that here in Canada because it'll be flagged for money laundering....

Lol friends tried to tell me the same thing when I sold my ‘17 superduty to buy the bronco. Oh you don’t Want to put over 10K in your account it will get flagged. . I called my accountant and asked. They laughed a bit and asked where would I be getting the money followed before I could even answer is it a legitimate source? I said yes selling my truck. $43k getting wired in. They said no problems. Keep a sales record. They said your friends are conspiracy theorist if it’s all legal you have nothing to worry about. They did say it could get flagged for tax reasons because the government always wants more.

 

[AZ_BRONC]

My 4Runner will get me over half way there, and the current trade-in negotiation is for more than I paid for it in 2017. Taking the trade-in off my balance will drop my sales taxes by around $2600-2700. The balance will be paid through a loan from my own whole life insurance policy, which will continue to pay me 6%+ in dividends while I pay myself back.

I make my living off understanding opportunity cost and time value of money. Paying cash when rates are this low brings a high opportunity cost, so long as you invest the money. No one who can pay cash but chooses to finance should be blasted here unless they say they will finance the Bronco and spend the “saved” cash on a bass boat to tow behind it.

Dave Ramsey has his place, for those who need a plan to get out of financial trouble that financial illiteracy and/or bad decision making earlier in life got them into. It’s a very safe way to get out of debt and achieve a million or two in the bank by retirement. But a million dollars ain’t what it used to be, and it really won’t be in 20 years. 8 figure millionaires understand how to use debt and leverage.

 

[350vudu]

WA. No income tax. Sales tax .

You don’t pay federal taxes?

 

[Plala]

Dave Ramey's 5 keys to gaining power over your purchases:
1. Wait overnight.
2. Consider your buying motives.
3. Never buy anything you do not understand.
4. Consider the "opportunity cost".
5. Seek counsel.

“Wait overnight”…? I’m waiting since 18 months ago! I’m pretty sure I want that damn BRONCO!!

 

[Plala]

I wanted to pay cash, but my dealer said I wasn't "allowed" to do that here in Canada because it'll be flagged for money laundering....

Dealers in America have to report anything over 10k in cash.

 

[Plala]

That's 7.12% of interest on $10k you're throwing down the drain because you'd rather not pay 1.49%. I'm not claiming to be smarter, I'm just questioning your thinking. It's perfectly acceptable to say paying cash and not worrying about anything else is easier than trying to maximize your money.

I got 0% financing through Ford on my 2018 Explorer. I’m going to see what it trades for when my bronco gets here (in May now) but when I didn’t have 0% financing, I always sent in an extra hundred every month and paid off the loan over a year sooner. And saved interest obvs.

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