Did you finance or pay cash?

[Markpf189]

I don’t see any reason to do cash when you can currently get loans through local credit unions or penfed for under 1.5%

you could put that money away and watch it grow more instead.

with that said, rates are expected to increase so I’m hoping my bronco comes in before the hikes…

As long as you’re not spending way more on a car than you should be compared to your income, you can really take advantage of the rates right now. The whole issue with financing any why a lot don’t recommend it, is because it allows essentially everyone to own a high priced vehicle, even if they can’t really afford it.

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[jlj4660]

I paid cash. I had wanted this since it was announced. I have my grandfather's 66 and have owned Ford Products all my life. I have worked hard to own my own business and be able to pay for my new toy in cash. Picked up December 10th and have not had a single regret on the decision.

 

[VGK_Fan]

After my trade, plus paying cash for the taxes, I had about $30k left to pay. My wife has monthly payment phobia and we just leased her an Audi so we would have two car payments for the first time in over a decade. I had a discussion with my money guys and they said paying cash would amount to a "rounding error" in my portfolio, so if it made life easier then just pay cash. I decided to torment the wife and finance the remainder over 5 years at 1.99%

If my money guys can't make me more than 1.99% then I have bigger problems than a second car payment!

 

[KompressorV12]

Yep, understand the principle behind it. It's more involved than that. "Sit and collect interest" at what 0.5% in my savings? Or invest it, and then pay tax on the gains to remove it and pay for my Bronco? What if my investments don't do well? Then I've lost money AND I am paying interest on my Bronco loan.

I appreciate the advice but I've got a good grasp on my finances. Enough that I can plop down $46k on a vehicle if I feel like it.

What if I told you there is a US government bond that is offering 7.12% for the first 6 months, then uses the fixed rate + inflation rate to determine future interest? Did you know that interest is state tax free, and federal if used for education? Would you concede that you were unaware of such a bond, and may rethink your strategy in this new age of high inflation? The most successful people in this world are those that are always willing to reevaluate their thinking

https://www.treasurydirect.gov/indiv/products/prod_ibonds_glance.htm

 

[Snydermann]

Your cash is king.

Never pass on cheap financing. In the event something catastrophic happens in your life you're better off with 30k+ cash in the bank than having a paid off vehicle.

 

[Heart2]

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

Me too. I've retired twice now. I realize that there are better opportunities for my money, but if that was a concern, I wouldn't be buying a new vehicle at MSRP. I expect to get $39K for my Ranger, which is all equity, leaving about $3K difference.

 

[jaruss01]

I historically have leased my vehicles, but with the low interest rate environment, and the fact that leases are absolutely horrendous (leases are up 25-40% depending on what you are looking at), I decided to buy my last two vehicles. One being the Bronco which i was going to buy anyway given I want to keep it for awhile. But put enough down on an XC90 and OBX sas that my payments were $499/mo each (to replicate a lease payment that I am accustomed to). Which was ~50% down each plus tax. It was not a fun 2 months since the purchases where almost back to back in order to shuffle around the stable to make way for the bronco....on the bright side, I've now jump started a cycle to owning both spots in the stable, with future trade-in equity, as opposed to what I was doing before, which was lease after lease.

 

[710-oil-614]

What if I told you there is a US government bond that is offering 7.12% for the first 6 months, then uses the fixed rate + inflation rate to determine future interest? Did you know that interest is state tax free, and federal if used for education? Would you concede that you were unaware of such a bond, and may rethink your strategy in this new age of high inflation? The most successful people in this world are those that are always willing to reevaluate their thinking

https://www.treasurydirect.gov/indiv/products/prod_ibonds_glance.htm

Uh, not at all because I am aware of that.

You are limited to $10k and you have to hold the bond for 1 year. Cashing the bond before 5 years costs you the last 3 months of accrued interest.

Since the sum of money I am talking about is $46k and I stated the Bronco might not be with me long term (ie could be sold within a year) you've really missed the mark.

But there's always gotta be one guy who thinks they're smarter than everyone else.

 

[prospectfour]

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.

Agree 100% on this take. Unless there's some special circumstance by which you can't finance (either DTI or former debt addict). It makes absolutely no sense to write a 50 grand check with auto loan rates at 1.XX%

There's for sure generational differences at play too. My late grandfather was an Italian immigrant who nearly starved to death in his childhood. He cut the check for his Bronco and Expedition in the 90's and refused to finance a damn thing. Didn't care about the money, the vehicle belonged to him and not the bank.

 

[Due51]

 

[idobleedblue]

Will be cash when it gets here.

 

[KompressorV12]

Uh, not at all because I am aware of that.

You are limited to $10k and you have to hold the bond for 1 year. Cashing the bond before 5 years costs you the last 3 months of accrued interest.

Since the sum of money I am talking about is $46k and I stated the Bronco might not be with me long term (ie could be sold within a year) you've really missed the mark.

But there's always gotta be one guy who thinks they're smarter than everyone else.

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.

 

[GToddC5]

What if I told you there is a US government bond that is offering 7.12% for the first 6 months, then uses the fixed rate + inflation rate to determine future interest? Did you know that interest is state tax free, and federal if used for education? Would you concede that you were unaware of such a bond, and may rethink your strategy in this new age of high inflation? The most successful people in this world are those that are always willing to reevaluate their thinking

https://www.treasurydirect.gov/indiv/products/prod_ibonds_glance.htm

This is great info, but the max kinda stinks:

 

[Heart2]

What if I told you there is a US government bond that is offering 7.12% for the first 6 months, then uses the fixed rate + inflation rate to determine future interest? Did you know that interest is state tax free, and federal if used for education? Would you concede that you were unaware of such a bond, and may rethink your strategy in this new age of high inflation? The most successful people in this world are those that are always willing to reevaluate their thinking

https://www.treasurydirect.gov/indiv/products/prod_ibonds_glance.htm

That's really interesting. I may invest in that. But, I'm still going to pay cash for my Bronco.

 

[KompressorV12]

That's really interesting. I may invest in that. But, I'm still going to pay cash for my Bronco.

I appreciate the honesty lol. I'm not trying to upset anyone, I don't know why it's a pet peeve of mine since how others spend their cash is none of my business. I help people everyday with challenging credit situations so I feel like this is just an extension of that. Carry on fellow Bronco enthusiasts!

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