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[quote=Anonymous][quote=Anonymous][quote]Why is financing at less than 2% foolish, when it allows me to keep money invested elsewhere making 10%? And if done in his name, it helps him with credit.[/quote]

If you pay cash, you can negotiate a better deal on the price of the car and that could very well (in fact most likely will) amount to more than 10% invested for the period of time of your paying off the car.  We have done this many times.  The dealerships are more than happy to do this as they get the 10% interest you are talking about.  Cash is king.

As far as your son's credit, that should not be a problem if he has a credit card that he pays off or if he can prove income from a job.  I never needed my parents to buy me a car in order to get "credit".  That's a red herring.

Hey, if you want to buy your son a car, buy him a car.  Don't ask about it on DCUM.  I think you are asking because you don't really have enough money to buy a new car without the financing and that concerns you.  As it should.  [/quote]

That's the thing.  I'm not asking whether or not to buy him a car, I'm asking if anyone else has done it, and how did they structure it, including how they handled insurance.    I've got about $30,000 short term savings that goes to things like vacations, and just to "have."   I don't feel comfortable pulling $20,000 of that out.  I feel fine doing $10,000.

As far as whether I get a better deal on a car with cash or not, I negotiate the price first without discussing trade-ins or down payments.  Otherwise, I know they definitely build in padding one way or the other.    Are you saying that if I then tell them I'm paying all cash, they will then lower the offered selling price?  Everything I've read says you get a better price with financing.   And if I can get financing at 2% or under, I'd be paying $311 over the life of the loan in interest.  Compared to the $3,500 I'd make just letting the $10,000 sit in the Vanguard account.[/quote]

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