Did you finance or pay cash?

[Wolfeman]

Traded in my paid for Raptor - dealership wrote me a check after the deal was done.

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[710-oil-614]

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.

JFC guy.

7.12% x 10,000 = $712.

Less 3 months of interest because of taking it out before 5 years (75% * $712) = $534

Less 15% short term capital gains on $534 ($534 * .85 = $453.90)

Less the $149 I paid in interest for 1 year on $10,000 loan ($453.90 - $150 = $303.90)

Less than 2% origination fee for my loan (2% x $46k) = $92 ($303.90 - $92.00)

So for all my hassle I am going to make $211.90 on my 10k in 12 months.

I probably made more money doing that math for you than I will putting it in the treasury bond.

 

[NaturalFlorida]

Due to inflation and GOV policy, the value of printed cash will continue to plummet.

It's in your face everyday, costs of goods are rising and they are not going back down.

Cash earning xx% in a savings account will not out pace the loss of buying power due to inflation. FYI , inflation is up 7% over the last year.

We only use borrowed $ for Real Estae assets which historically outpace inflation and debt service.

 

[Bongo Fury]

Was.....probably still will...........CASH
Point to consider

• Inflation skyrockets (great, my pymt's stay at $XXX.XX / month)
• deflation (crap, just dumped a pile of FRN's)

Right now I'd guess the inflationary pressures may alter my plans. The only hold back is I hate inserting another player in the mix.
Bought and paid for has always been a stress reliever.

 

[notbuildingrockets]

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....

That's a straight up lie. They want you to finance because that's how F&I managers and the dealership make money. lol

 

[RClark82]

At the end of the day no matter how the math is done I just sleep better knowing that I don't owe anyone anything. If I was paying cash and not investing because of that it would be an issue but I max out all tax advantaged investments every year. I know I'm missing out on taxable gains but it becomes more emotional than monetary for me at a certain point.

 

[KompressorV12]

JFC guy.

7.12% x 10,000 = $712.

Less 3 months of interest because of taking it out before 5 years (75% * $712) = $534

Less 15% short term capital gains on $534 ($534 * .85 = $453.90)

Less the $149 I paid in interest for 1 year on $10,000 loan ($453.90 - $150 = $303.90)

Less than 2% origination fee for my loan (2% x $46k) = $92 ($303.90 - $92.00)

So for all my hassle I am going to make $211.90 on my 10k in 12 months.

I probably made more money doing that math for you than I will putting it in the treasury bond.

I'm thoroughly impressed. You clearly understand numbers, but think the opportunity cost of not having $40,000 to $60,000 available is less than $1156 (the cost of a 1.49% loan spread over 36 months). My friend, if you can't make $1156 on $40-60k in 3 years then we will never come to agreement. But what we can mutually agree to is you should definitely stick to paying cash.

 

[710-oil-614]

I'm thoroughly impressed. You clearly understand numbers, but think the opportunity cost of not having $40,000 to $60,000 available is less than $1156 (the cost of a 1.49% loan spread over 36 months). My friend, if you can't make $1156 on $40-60k in 3 years then we will never come to agreement. But what we can mutually agree to is you should definitely stick to paying cash.

I think what we can agree on is that you should not come in here dick swinging like you are more intelligent than everyone else.

I'm sorry it bugs you I can pay cash for my Bronco.

 

[KompressorV12]

I think what we can agree on is that you should not come in here dick swinging like you are more intelligent than everyone else.

I'm sorry it bugs you I can pay cash for my Bronco.

The reason I can pay cash for my bronco, is because of not paying cash for things like a bronco lol. Super ironic. Carry on my man.

 

[Kos]

I'm paying cash...

Bonuses hit first week of February at work. Parking garage will be full of in-transit stickers the 2nd week of February

 

[Brianstrange]

I had a hefty down payment, but 2% is a really cheap loan right now when considering inflation. I chose to pay cash for a complete solar setup at our house which has a stupid ROI, but the financing is about twice the rate, plus appraisal and app fee's. This way, I eliminate power bills for 25 years while purchasing a depreciating asset.

 

[notbuildingrockets]

I saw a thread earlier today with people comparing interest rates and it had quite a few members active in the conversation. I also had read an article talking about a high number of bronco owners paid cash. Curious what the percentage really is......

Votes do not display publicly

I know this wasn't the question but what about leasing? Is leasing not an option in the US?

I'm leasing mine, in Canada, with 10 security deposits (lowers my interest rate by 1.5%), for a few reasons. a) the Bronco's strong resale value and my low mileage means I'm going to do very well when I trade it in, and b) have you seen the residuals?! The Bronco's residual value on a 2-3 year lease are nearly 10% higher than any other vehicle in the Ford line-up. That means, my $60k+ 4 door Bronco has lower bi-weekly payments than a similar Bronco Sport worth $22k less!

But you don't own it! If you're financing, you don't own it either. Miss a few payments and see who owns it. My logic is: I'll be under warranty for the entirety of my ownership of the vehicle, and when I trade it in for the next one, I should make between $5-10k depending on market conditions, essentially, giving me a fat down payment on the next vehicle, on top of my security deposits! Keep flipping vehicles and making money until you don't have payments any more.

I do this for a lot of my F150 customers. I have one customer who has built up over $17,000 in positive equity over the years. At any point she can cash out, but she keeps putting it into the next one, so every 18 months she gets a new truck, makes a little money, and lowers her payments!

EDIT: Also, for those of you getting private loans, line of credit loans, etc to finance a vehicle, do so with caution. Interest rates through Ford Credit may be a few points higher, but at least they have a schedule for finishing payments. A line of credit requires financial discipline to pay it off in a timely manner, and if it's got a variable interest rate, be careful. Interest rates are almost certainly going to go up 3-4 times in the next 18-24 months.

 

[StopsForTacoTrucks]

JFC guy.

7.12% x 10,000 = $712.

Less 3 months of interest because of taking it out before 5 years (75% * $712) = $534

Less 15% short term capital gains on $534 ($534 * .85 = $453.90)

Less the $149 I paid in interest for 1 year on $10,000 loan ($453.90 - $150 = $303.90)

Less than 2% origination fee for my loan (2% x $46k) = $92 ($303.90 - $92.00)

So for all my hassle I am going to make $211.90 on my 10k in 12 months.

I probably made more money doing that math for you than I will putting it in the treasury bond.

Just out of curiosity, why are you comparing it with the assumption you'd cash out your bond at 12 months? Did you pay your loan off at the 1 yr mark?

I've still got I-bonds from 2004. I have I-bonds paying as low as 4.56% and as high as 8.36%

 

[RalBronco]

Perfectly ok if one wants to pay cash, but under little to no circumstances is this a good financial move overall. It would be if interest rates were north of 10% as they were in the 80s.

Math is simple. If you can finance a vehicle with cheap money (ex 3%) and have a half decent investment advisor, take that 40k you were going to pour into a vehicle and put it in the market. If you average 10% annually, in 5 years you’ll have over 60k sitting there.

Again, if you want to pay cash, do it. But let’s not pretend it’s a good financial move.

 

[Jim Walter]

Plan to put down 50% from my investments. Then finance through Navy Fed or USAA for 3 yrs. Financial institution will make monthly deposits in my banking account prior to the "auto" payment coming due every month till paid off.

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