Is it ever a good idea to pay full price for a car up front?

[Anonymous]

Anonymous wrote:This is all about your loan APR and what you presume that you can get for a return in the markets over the term of the loan.

This. There is no one right answer. And there are even times when ::gasp:: a lease makes sense.

Though right now, I’d say don’t take out a loan for the whole amount, if you can help it. Interest rates are too high.

I’ve heard mixed things on even certified, pre-owned cars, in terms of quality and reliability.

[Anonymous]

Another vote for cash, and avoiding loans on a depreciating asset.

In this interest rate environment, even more so. I could see a loan when rates are 0-2%. But it would still be a depreciating asset and would be underwater the minute you drive off the lot.

The older I get, the more I think mostly poor people get car loans. And way too many people are making themselves poor by overspending on cars.

[Anonymous]

Anonymous wrote:Another vote for cash, and avoiding loans on a depreciating asset.

In this interest rate environment, even more so. I could see a loan when rates are 0-2%. But it would still be a depreciating asset and would be underwater the minute you drive off the lot.

The older I get, the more I think mostly poor people get car loans. And way too many people are making themselves poor by overspending on cars.

For the love of god please stop typing "depreciating asset"! A car in this context isn't an investment so the comment makes zero sense. There are reasons to and not to get a loan or pay cash. None of them have anything to do with whether a car depreciates.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Of course. The rich don’t get car loans.

The rich i know lease cars!

What? No one with any financial savvy lease cars.

My MC SIL and her husband with financial problems lease cars; lower up front costs and lower monthly payment.

[Anonymous]

I paid cash for my last car. The sales guy got rude when he found that out; didn't like it at all.

[Anonymous]

I’m getting my first new car ever and paying half in cash to keep the payment under $300. I’m getting good rates/dividends on my cash rn and got a good rate on the loan

[Anonymous]

Some people lease because it’s easy, not because it’s the best deal.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The car is cheaper, generally, if you finance it. Pay off the loan with cash the next month.

This.

Why is this true? Thanks for explaining.

-Single divorced woman here who hasn't bought my own car before (inherited family car, was car-less in urban area for many years, then exDH bought all cars).

[Anonymous]

Anonymous wrote:

Anonymous wrote:The car is cheaper, generally, if you finance it. Pay off the loan with cash the next month.

This. The last two cars I purchased each had a several thousand dollar discount for financing the purchase. I financed and then paid it off (although the last one, I just paid out more than the minimum payment over time because the interest rate was so low).

I assume you financed from the dealer to get the discount? And not a bank loan?

[Anonymous]

Anonymous wrote:The car is cheaper, generally, if you finance it. Pay off the loan with cash the next month.

This! Oftentimes you can get discounts for financing. I just pay off the car loan in month 1 so no interest.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The car is cheaper, generally, if you finance it. Pay off the loan with cash the next month.

This.

Why is this true? Thanks for explaining.

-Single divorced woman here who hasn't bought my own car before (inherited family car, was car-less in urban area for many years, then exDH bought all cars).

If you get your financing through the dealer, they may get some sort of kickback from the lender. This is why dealers like offering financing and dislike manufacturer captive lender's special rates.

[Anonymous]

Anonymous wrote:I’ve was taught as a child that the best thing to do is buy cars with cash and then drive them as long as possible.

But I also never questioned this wisdom and the source is for sure unreliable.

+1. We always buy cash. And we keep them for 12-14 yrs. DH is driving a 2009 Toyota Rav4 with about 135k miles on it. I have a 2017 Honda CRV with about 55k miles.

We aren't using cars as status symbols. We are using them to get around where we need to go. We have the means to buy expensive cars, but we choose not to.

[Anonymous]

Anonymous wrote:Another vote for cash, and avoiding loans on a depreciating asset.

In this interest rate environment, even more so. I could see a loan when rates are 0-2%. But it would still be a depreciating asset and would be underwater the minute you drive off the lot.

The older I get, the more I think mostly poor people get car loans. And way too many people are making themselves poor by overspending on cars.

What if you get a loan so you can keep the cash and get a better return on it in another investment?

[Anonymous]

We have a good HHI (800K+) and replace cars after about 10 years of use. There's no need for a car loan, so we just pay in full.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The car is cheaper, generally, if you finance it. Pay off the loan with cash the next month.

This. The last two cars I purchased each had a several thousand dollar discount for financing the purchase. I financed and then paid it off (although the last one, I just paid out more than the minimum payment over time because the interest rate was so low).

I assume you financed from the dealer to get the discount? And not a bank loan?

Yes. I’ve been told that many (all?) dealers make more money off financing than they do the cars themselves.