Paying cash for your Bronco Raptor?

[RHeinz]

Interesting posts….. With a current annual inflation rate of 7% and apparently rising, it‘s hard not to finance as much as possible and for as long as possible.

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[JDMD]

Interesting posts….. With a current annual inflation rate of 7% and apparently rising, it‘s hard not to finance as much as possible and for as long as possible.

That’s my plan. I can make enough APY on the the money I would put down as cash to cover my monthly payments.
But yes with that 7% inflation staring you in the face, if you’re not making more than that in interest a year then you might as well get rid of the money and use it while it’s worth more.

 

[Lucky]

I assume anyone paying cash either is really smart financially and knows this, or is maybe someone that sold a house last year and is flush and have no idea how to invest.

That’s what I couldn’t figure out about this whole thread - anyone who can pay cash should be smart enough to know it’s not the best move for 90% of people in that position. For me, I would say the discussion changes when the lowest APRs are over 6%, which isn’t likely to happen in 2022.

 

[DrewBronc21]

Def not.

Why would anyone in their right mind pay off 80k in cash rather than take a 3-4% interest loan.

I will not be, and i presume most wont either.

2.39% at a credit union. I wont be buying a Raptor but if I did I would finance for as long as possible at as low a rate as possible and make some money on my cash instead of sticking it all in an automobile.

 

[JDS]

Just checked USAA and they are advertising 2.54% as of 30 sec ago. So, it would stand to reason if your fairly liquid investments are making more than that, take the loan.

 

[Krieger]

2.39% at a credit union. I wont be buying a Raptor but if I did I would finance for as long as possible at as low a rate as possible and make some money on my cash instead of sticking it all in an automobile.

Agreed. My last car was an Alfa Romeo Giulia Quadrifoglio- I bought it in 2018 and put nothing down and financed all of it for 8 years with USAA at 2.99% and my family said I was crazy. Meanwhile I invested all that extra money during the pandemic.

Last year the dealership called me and offered me more than I paid for it. I jumped on that. I couldn't have leased the car that cheap and pretty much broke even after all was said and done with 3 years of ownership.

Obviously had no clue the used car market was going to turn psycho but here we are.

 

[FLSTFI Dave]

I will be Financing most likely. At this point we do not know what the auto loan rates will be this summer. Hopefully still in the low 2% area. So I will put down enough to get the note under 1K a month. Just finished paying off the 18 Grand Sport and the 19 CVO Road glide. Those two notes together were 1340 a month.

Doesn't make sense to take money out of investments when they earn more in interest than you pay in interest on the car note. I could have paid cash for the Grand sport, chose not to. The returns on my investments were more than the cost of the car in those four years. Hopefully it will be the same with my Raptor.

 

[Bituman]

You guys are much better investors than me. Most of my mutual funds are DOWN for the first quarter of 2022. Last one I looked at the rate of return was around -7%. Of course, last year everything I had was way up. I think we’ve gotten spoiled on double digit returns. But right about now, not sure I want to depend on return on my investments to offset APR on a car loan. On the other hand, never take investment advice from internet Bronco geeks like me!

 

[bajabronco57]

You guys are much better investors than me. Most of my mutual funds are DOWN for the first quarter of 2022. Last one I looked at the rate of return was around -7%. Of course, last year everything I had was way up. I think we’ve gotten spoiled on double digit returns. But right about now, not sure I want to depend on return on my investments to offset APR on a car loan. On the other hand, never take investment advice from internet Bronco geeks like me!

Everyone person's situation is different, but I would say if you knew how to invest in a way to capitalize on APR of a car loan you are already going to do it... and if you don't now is probably not the time to experiment.

 

[FLSTFI Dave]

You guys are much better investors than me. Most of my mutual funds are DOWN for the first quarter of 2022. Last one I looked at the rate of return was around -7%. Of course, last year everything I had was way up. I think we’ve gotten spoiled on double digit returns. But right about now, not sure I want to depend on return on my investments to offset APR on a car loan. On the other hand, never take investment advice from internet Bronco geeks like me!

Half of my investments are down. The other half are up ever so slightly. The returns have been good for many years, last couple were great.

The last market crash I had one 401K with 101K in it when it tanked. Got all the way down to 44K. I never touched it, didn't add to it, nothing. 3 years ago it was 212K when I moved it into an IRA. They will come back, its just how long can you weather the down. Half my investments are very safe and secure, no big gains and no losses. The other half are moderate to high risk. These have had great gains. I am still way up over what I had 2 years ago, but am down for the year.

More than likely I'll still finance most of the Raptor, just take enough out to make the payment under 1K a month. Hopefully the market will go back up before I need to get into the high risk in 6 more years when I turn 65. I am not contributing to any investments as I medically retired December 2019. On disability insurance and SSDI until 65.

 

[Bituman]

Half of my investments are down. The other half are up ever so slightly. The returns have been good for many years, last couple were great.

The last market crash I had one 401K with 101K in it when it tanked. Got all the way down to 44K. I never touched it, didn't add to it, nothing. 3 years ago it was 212K when I moved it into an IRA. They will come back, its just how long can you weather the down. Half my investments are very safe and secure, no big gains and no losses. The other half are moderate to high risk. These have had great gains. I am still way up over what I had 2 years ago, but am down for the year.

More than likely I'll still finance most of the Raptor, just take enough out to make the payment under 1K a month. Hopefully the market will go back up before I need to get into the high risk in 6 more years when I turn 65. I am not contributing to any investments as I medically retired December 2019. On disability insurance and SSDI until 65.

You pretty much described me re: investments with the exception I am 66 and staring at retirement in the next year or two at the most. When you say “they will come back, its just how long you can weather the down“ is what I have experienced over the last 40 years. You are so right. I have financed vehicles over the years and therefore maxed out savings in every way possible (401K, HSA, mutual funds, company stock, etc.) But about 7 or 8 years ago I became a cash payee and enjoy that paid up feeling knowing that the title is filed away in my home office. Good luck in 6 years!

 

[vrtical]

Hell no plan is 17k cash then 3k on Ford Pass whatever the max is to get the points deal. Finance rest I have two credit unions and Pen Fed to shop it.

 

[BP Bronco]

There are stocks that pay big dividends. A 4.5% loan is still free money.


Let's look at financing a 75k car. Over 60 months(5 years), you pay $8,894 in interest.

Over 36 months, you would pay $3,856 in interest.

Let's pick a random stock. I know of one that pays 5.77% annually, and today's closing price is $18.67. 75k would be worth 4,017 shares, and you'd have $2.61 left for your piggy bank.

Let's assume you do NOT reinvest dividends and the stock price never moves.

After 3 years, you'd have recieved cash dividend payouts of $12,982.04. Plus still have your 75k in stock. After 5 years, it's $21,636.74 plus your 75k.

Obviously if that stock goes to 0, everything changes. But in the past 5 years(not counting pandemic), this specific stock has bounced between $16 and $21 dollars.

There are other higher paying dividend stocks. And reinvestment is a possibility which increases things.

I assume anyone paying cash either is really smart financially and knows this, or is maybe someone that sold a house last year and is flush and have no idea how to invest.

I can afford to pay cash. Only way I am paying cash is if the immediate flip value is so high I can't turn it down. I'm 42 and will happily eat some risk for a 90% chance at a better payday.

Spending $8.9k to make $21.6k is a no brainer to me.

There are stocks that pay big dividends. A 4.5% loan is still free money.


Let's look at financing a 75k car. Over 60 months(5 years), you pay $8,894 in interest.

Over 36 months, you would pay $3,856 in interest.

Let's pick a random stock. I know of one that pays 5.77% annually, and today's closing price is $18.67. 75k would be worth 4,017 shares, and you'd have $2.61 left for your piggy bank.

Let's assume you do NOT reinvest dividends and the stock price never moves.

After 3 years, you'd have recieved cash dividend payouts of $12,982.04. Plus still have your 75k in stock. After 5 years, it's $21,636.74 plus your 75k.

Obviously if that stock goes to 0, everything changes. But in the past 5 years(not counting pandemic), this specific stock has bounced between $16 and $21 dollars.

There are other higher paying dividend stocks. And reinvestment is a possibility which increases things.

I assume anyone paying cash either is really smart financially and knows this, or is maybe someone that sold a house last year and is flush and have no idea how to invest.

I can afford to pay cash. Only way I am paying cash is if the immediate flip value is so high I can't turn it down. I'm 42 and will happily eat some risk for a 90% chance at a better payday.

Spending $8.9k to make $21.6k is a no brainer to me.

Dear CBRadio666

Thanks for the math lesson but I really didn't need it. My investment accounts are doing just fine. I'm not buying a Raptor because I NEED one, I'm buy it because I WANT one. I make it a practice to pay cash for things I want, there are more enjoyable not having monthly payments. Investments are not without risk and leverage adds risk. Yes leverage can juice your return but it can also lead to eating dog food. Your 42 and I'm 62, your in a better position to take higher risk than I. Good luck and enjoy your Bronco.

 

[markpilip]

There are stocks that pay big dividends. A 4.5% loan is still free money.


Let's look at financing a 75k car. Over 60 months(5 years), you pay $8,894 in interest.

Over 36 months, you would pay $3,856 in interest.

Let's pick a random stock. I know of one that pays 5.77% annually, and today's closing price is $18.67. 75k would be worth 4,017 shares, and you'd have $2.61 left for your piggy bank.

Let's assume you do NOT reinvest dividends and the stock price never moves.

After 3 years, you'd have recieved cash dividend payouts of $12,982.04. Plus still have your 75k in stock. After 5 years, it's $21,636.74 plus your 75k.

Obviously if that stock goes to 0, everything changes. But in the past 5 years(not counting pandemic), this specific stock has bounced between $16 and $21 dollars.

There are other higher paying dividend stocks. And reinvestment is a possibility which increases things.

I assume anyone paying cash either is really smart financially and knows this, or is maybe someone that sold a house last year and is flush and have no idea how to invest.

I can afford to pay cash. Only way I am paying cash is if the immediate flip value is so high I can't turn it down. I'm 42 and will happily eat some risk for a 90% chance at a better payday.

Spending $8.9k to make $21.6k is a no brainer to me.

Lots of if’s there, Gordon Gekko. Assuming that because you’ve got the stock market so clocked you’re a billionaire anyway, so cash or finance is a moot point.

Right?

 

[Hamhands]

This is easy
Interest rate 3.5, inflation rate 8.0.....
Finance everything for as long as possible and pay it off with inflated dollars.

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