Reply to How much are you paying for your car?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]It's not a question of risk aversion.  If you are offered a 0% loan, you can take the cash and invest it in a 1% CD and are guaranteed to make money.[/quote]
1% return is not what PP is talking about. For 1% I don't to deal with a situation when I have to sell the car quickly and the title is still with the bank, or failed autopay, because your loan was sold and they changed rules.[/quote]

Usually the 0% financing deals are offered by the manufacturer's finance arm (like VW Credit when you buy a VW), and they don't sell the loans. It's not like a mortgage.

ALso when you finance the car, you still get the title right away. It just has a lien marked on it. When you pay off the loan, you get the lien release letter in a few days.

If you did 0% financing and put the money in the bank at 1%, you'd never have a need to sell the car quickly to raise cash -- use the money already in the bank at 1%!

[/quote]
The need to sell the car because of the need to sell, not the need for the money. The title without a bank name on it helps with the sales price and speed. Clean title can easily offset 1% interest.
I am giving a reason why would people pay cash instead of 0% loan. It's for simplicity and less obligations. It's the same with how much money people keep in their "emergency fund". Some keep couple of months, some keep couple of years. Whatever makes people sleep better.
I remember getting my first 0% loan. I lasted two months and paid it off. It was bothering me. [/quote]

We usually finance if the offer is 0%, even though we can easily pay in cash. We've always had the loan long paid off by the time we go to sell, but I suppose other people may need to sell quickly and still have the loan.[/quote]

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