Did you finance or pay cash?

[Indy951]

1.89 at USAA. Ill bow down to the evil machine. I'm also financing the sales tax, the gas to get home, and a combo at Taco Bell.

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[Blackcat]

I’m gonna boat loan my Bronco and get a 20 year 8.9% apr loan at the nearest Buy Here, Pay Here joint.

 

[Roger123]

Man....I ain't as rich as y'all. I don't have 46k in savings that I could pull out to pay cash. I am financing it and putting 20% down.

Take the payment and put in the bank for 5 years, when you get the pile of money, take it out and buy the Bronco. Or when you get the pile you may not actually want the car. Using your "own" money often changes your mind on what's really important to you in your life and what you actually want.

You often make different choices in your life when there's $50K on the kitchen table and you have to decide what to do with it. It makes personal finance much more personal.

Good luck with your new Bronco!!

 

[Roger123]

I saw this and was like SWEET!!!!! Logged into penfed, checked rates....1.99% for 60 months...
Only way for .99% is to go through THEIR buying service and only good for 36 month term.
https://www.penfed.org/auto/rates

Wait, what, you mean a financial institution has FINE print? LOL

 

[GO_SOONERS_TXSUX!]

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......

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Can we use Shib or Doge coin yet?

 

[SDBronco6]

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?

 

[SDBronco6]

I’m gonna boat loan my Bronco and get a 20 year 8.9% apr loan at the nearest Buy Here, Pay Here joint.

Why would you do this? I get that it makes your payment affordable but this will make your bronco super expensive in the long run. That rate is way higher than a car loan and your term is 4 times longer.

 

[Blackcat]

Why would you do this? I get that it makes your payment affordable but this will make your bronco super expensive in the long run. That rate is way higher than a car loan and your term is 4 times longer.

Yeah, it's a joke.

 

[SDBronco6]

Yeah, it's a joke.

Ah, sorry I missed that just joined this site!

 

[skhubbard93]

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?

Each person's financial situation is different. If you are about to borrow money for a $3m house, maybe you don't want to hit your credit rating with a car loan right beforehand? Though overall, what you said tends to be right.

 

[tater_70]

Been in the market since the 70's,. Been through all it's up's and downs, way up at times, bubble burst, and back to scratch. Back to doing well but who knows. All I know is that doesn't matter what the market will do, I'll have a paid for Bronco in the barn.

 

[Crush0205]

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.

I agree with you on this one. If you are paying $40K (low end) in cash putting that same amount into a divided stock or ETF you can easily make $300-$400 a month.

 

[DUSTYcazOREGON]

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.

I am paying cash because I can, do not want payments and have plenty to live off of. Besides.....to keep $45K in a secure CD; CD's are paying .5>1% (rates are terrible right now). A car loan would cost more than that (in most cases).....so a loan would make the overall cost of the Bronco higher. That old saying, "you can't take it with you" comes to mind here.

 

[BillieB]

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......

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I financed. 1.79% for 60 months. I did put 5k down.

 

[RWBigBend]

I paid cash. One reason is my retirement accounts are funded to the level that allows me to easily maintain my standard of living and still give my kids some when I die. The other more important reason is I want to maintain my streak of not having a truck payment for the past 25 years. I have driven only two used F150s in the past 26 years. I got a great deal on both ($10,500 for one and $15,900 for the second). Both were only 2 years old at purchase time. The few repairs necessary I did myself. I also have no mortgage. I bought fixer upper houses and did the work myself. The profits on the first two allowed a very small mortgage on the third house that was paid off in a few years. I take great satisfaction in being debt free.

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