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Did you finance or pay cash?

Did you finance or pay cash

  • Finance

    Votes: 454 65.0%
  • Cash

    Votes: 244 35.0%

  • Total voters
    698

Kev

Outer Banks
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Your Bronco Model
Outer Banks
Financed 10K for 3 years will pay off early ( Need to keep Credit Score High )
Any Vets out there I financed with Navy Federal Credit Union 1.79%
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MJ14

Outer Banks
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Matt
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Outer Banks
Clubs
 
My plan is to finance at 60 months on a 1.96% interest rate loan. My plan was also to do that for my 2022 Explorer, but Ford offered a 0% interest rate loan for 36 months so I went for that. I know the Bronco isn't going to have an option like that. With my payment about $500 higher than expected on the Explorer, it makes sense for me to get a slightly longer term on the Bronco and lower that payment. I'd rather have some extra cash in hand per month, with the interest rates this low.

My first vehicle I purchased in 2010, I had zero credit. The bank offered me a 5 year loan at 12% interest. I paid cash for it because 12% interest is outrageous. Then I got a credit card and paid it off every month to build my credit to what it is today.
 

t3n2and4

Badlands
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Badlands
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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
Sometimes there are other requirements to manage your available credit/cash mix. e.g. D to I ratios when qualifying for mortgages too.
 

MnLakeBum

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Outer Banks
Finance your house, pay cash for your toys
Generally a good rule of thumb. All of us have different comfort levels with debt and that changes with age. I’ve paid cash for my vehicles the 15 years have and financed all my real estate except one rental property. I might finance some of my Bronco if it ever shows up as I just paid cash for a couple of Ski Doos.
 

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jaspercasidino

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USAA is currently offering 1.89% on 60 or 63 month loans. I also think you get a 0.25% discount for automatic payments which makes the deal even better. I plan on putting $10K down and financing around $35K to keep payments at what I consider a reasonable amount if those rates and my build date holds. Probably pay cash for my Streetfighter V2 that should be coming in around May since motorcycles tend to have higher interest rates and I just don't feel like having multiple vehicle payments.
 

mC.242

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Undecided
Financed. The interest rate I am paying is 3-4x lower than the rate of return I'll get keeping my money invested.
 

Barlos

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When I put in my $100 reservation I had $1500 for a downpayment. I have 30K in that envelope now. Thats how long I have been waiting and yes still getting a Basesquatch but Im not sure if to use all the money or just finance…. I guess Ill know if I pay all when I get it…. 2/28/22 build but I hear horror stories.::::
 

BroncoDude

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Financed, but put down a pretty hefty down payment. About half.
Same. Rates are very low and I get better return on my cash vs paying it all out on purchase.
 

Richtor

Badlands
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If there are people that paid cash I'm going to question their intelligence level with penfed giving 0.99% APR loans :oops: 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.
This is so wrong.

You are basically telling people to take out a $50k loan just you can invest $50k in the market in hopes to earn a few dollars.

I have met zero wealthy people that do this. I do know some people who have gone bankrupt with your idiotic advice. Why not borrow against your 401k while your at it? This is the definition of gambling.

If you have the cash beside your retirement and Emergancy funds pay cash! There’s a reason why these people can pay cash for a $50k vehicle. It’s not because they are dumb with money!
 
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UtahLars

First Edition
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Laurent
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Cash, only because after analyzing the alternatives it is always the cheapest way to buy (at least in my experience). Cash is a particularly cheap way to buy now where its value is being eroded by high inflation and bond/deposit rates have not caught up.

Its also a good affordability barometer. If you can't afford to buy a car with cash on hand, you can't afford it no matter how you finance it. Financing does not make it more affordable, it just makes it feel that way, and if your reckoning is that you'd be on the edge if you used cash, you're taking a big risk if you spend the same amount via borrowing.

I also like cash because it gives me the most optionality once I own the car - that is, its easiest to change out of it for something else if you've paid cash and own it outright.

If you think leasing is attractive because rates are low, just make sure you understand the entire lease and its terms, because a low APR can be manufactured by compensating changes in the lease terms elsewhere. And its really hard to figure this out, and I think intentionally so. In fact one reason I like cash is that cash transactions are simpler to understand. My experience is that when there's a lot of complexity in the financing of a deal, bad stuff is hiding there that's quite hard to detect.

Obviously one problem with my approach is that dealers used to like cash and now they don't. They like financing and leasing because they create more profit opportunity for them. And that's precisely why I don't like those approaches. So if its a hot, hard to get vehicle, you may have to dance to the dealer's tune, whatever that may be.
 

Roger123

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You need to take risk into the equation. How many people need a working spouse to keep making payments? Who's raising your kids while they're working? What happens if a breadwinner gets sick and has to take a leave of absence and the other spouse does too to care for the sick spouse or the children? And all of this happens in 2008? Remember being invested in '08? Go from 2 incomes to ZERO overnight, now what? Once again, no payments, not a big deal.

If a spouse gets tired of working, quit, no payments, no problem. Oh, no worries I'll just pull all the money out of my investments (that would have been a great plan in '08). Remember risk?

What if I get tired of working and just want to ride off into the sunset in my Badlands, no payments, no problem.

No one here will change each others minds in this discussion but for those of you starting out, please don't think that having a car payment is the American way and you'll just invest and watch your money shoot to the moon like it has in the last 15 years.

Take some time and think about the big picture, and risk my friends NEEDS to be factored in. Not owing anyone anything is peaceful, you have ZERO risk. Yes, you have some risk of not beating inflation and your money not growing but a good financial plan will allow for that.

I've never heard anyone with no payments say they'll have to work until the day they bury them.
 

ramblinwreck

Wildtrak
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I have the cash on hand to pay for my Wildtrak when it shows up. That is my plan. That being said, if I got a 1% interest rate, I'd certainly be tempted to borrow and invest. I am averaging better than 15% returns over the past 15 years on my investments.

I just prefer, for psychological reasons, to pay cash and have the title in my safe. It may not be the best financial decision, but it does make life a bit easier(no payment to keep up with), and I sleep a little better.

Also, funny story. When I initially reserved the Bronco, I bought a wad of Ford stock. It was somewhere around $6/share. It is now over $20/share!
 

thenewjs

Raptor
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Archie
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Raptor
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If debt is still cheap when I get it financing will be a no brainer!
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