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[quote=Anonymous][quote=Anonymous]I don't know why the financial acumen on this board is so terrible. Is everyone just a government drone who majored in poli sci or grievance studies? The economic answer is NOT "only finance when it is a low rate like 0% or 0.9%" as several people have parroted. The answer is that you finance when the finance rate is lower than the rate of return you would earn by investing the money.[/quote]

No one is "parroting" that answer -- it's just what a lot of people choose to do. Personally I would still not take out a car loan at 3-4% even if that was was lower than the average rate of return on investment. Why? Because even if I could put the money in an investment vehicle at 6 or 7%, now I have to make a monthly payment on the car and that money is going to come out of my income most likely, which means it's money from my income that isn't going into savings/investments. The difference in what I could make off that income if I continued to save/invest it instead of using it for a car payment, and what I will earn by putting the cash lump sum I was going to spend on the car into an investment vehicle, is usually negligible. Plus there are advantages to keeping my monthly costs down in terms of financial flexibility, which has both tangible and intangible benefits.

So for me, if I can't finance at less than 1%, I won't finance at all. I also generally buy practical, used (2-3 years old, low mileage) cars and drive them until keeping them is more expensive than trading them in. So we're talking about 25k, not 60k. I'd rather just buy the car and not worry about a payment -- it is not a big factor in my investment strategies and the money for the car usually comes out of an emergency fund that gets fairly quickly replenished anyway.

But by all means, lecture people on "financial acumen."[/quote]

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