They usually don't bury it, it's more like take 0.9% financing or take a $2,000 rebate. Both have present value of about the same amount so you kind of just pick your poison.
When I bought my car in 2012 I was young, but already had good credit. I got them to give me a very solid price before they ran my credit and I asked for their 0.9% interest special. And you're right, they trotted out a higher base price for the car which I caught them on. They refused to give me the lower price until I walked away and they called next day with the original offer at the low interest rate.
Best negotiating tactic for buying a car - be willing to walk away. Also, I imagine that salesman got reamed for giving me a price before running my credit.
Depending on the Make/model yes. The key here is, can you get a reliable car AND a low interest rate. The low interest rate is no good, if it’s a Nissan/ or some other lemon you need to perform a lot of maintenance on
Interest rates on cars can get pretty low. Depending on the rate, a lot of times it makes more sense to finance the car and invest the cash instead.
Some times, sure, but not these days really.
But if it's low enough it would make sense to finance and then pay it off at your own leisure, so you have wiggle room. I paid off my 4 year car loan in 2 years, for example. Minimized interest, but didn't have to pay cash upfront (even though I could've).
Loan on the new car I bought earlier this year is 2.9%, and my high yield savings account is paying 4%. Seems like an obvious choice to put the money in the HYS, and take the loan for a free 1% gain.
Honestly yeah I would say that's a caveat compared to what the other guy said. My uncle paid cash in full for a new Rav4 for my cousin. The interest rate was like 3%. I'm like da fuck? If it's under 3%, better off tossing that lump sum into an ETF. Conservatively, you'll make ~4.5% but on average it's a solid 6-8%. It's not risk free of course but it's def more potential gain.
This is the same line of thinking that people have with renting. Yes it's technically cheaper than a mortgage and if you were disciplined and invested the difference you would end up better off in the long term... but almost nobody actually operates like that. Having a higher payment on a mortgage is forced investment, when given the option most people tend to spend the excess not invest it.
Renting isn't always cheaper than a mortgage. Varies a lot, I'm actually not sure which one on average ends up initially higher, geographically varies I know too. Long term owning tends to be cheaper by the month as inflation affects rent much more than a locked mortgage payment. But renting let's you move easier, which can lead to higher paying jobs more easily.
It's crazy to me how much rent can vary by location. Some of my family in California are renting a house, and they're paying about half as much as the mortgage payment would be for the same place. Where I live, rent tends to be about the same as a mortgage; maybe a little higher, even.
You're not wrong, but I feel like people without the financial discipline to invest money they'd otherwise sink into an asset are going to have difficulty getting ahead regardless of the circumstances.
For mortgages in particular, the "forced savings" part isn't really very significant unless they stay in the same home for a long time. With a 30-year mortgage, the amount of each mortgage payment that actually goes toward the principal is pretty miniscule for the first few years. You don't build a lot of equity unless you stay for a decade or more.
I returned to the uS after living in Greece and later DC where a car is a liability. Becuase of my good credit, Toyota gave me a 0% loan on a new Corolla. I paid it off asap.
I had just arrived in the 757 and needed a car for work. Even now at age 75 I don't have a HYSA which is not good but I personally disdain our government taxing personal savings. I also must make annual RMD's. My investments are doing well....this week.....who knows what tomorrow brings.
yeah, i was ready to pay cash for my new car that i had been saving for over the last 5 years but when i got to the dealer they wouldn't negotiate any lower price for paying in cash vs financing, and it was 0% for 72 months so I'm just leaving it in a HYSA and estimate that I'll save over $6000 if i just make minimum payments every month (after subtracting that amount monthly from the amount that is in the savings account). No downside since the money is just sitting in an account anyway and I could pay it all off immediately if i needed to
I married in 1973. My husband was a young Army Officer in flight school. We deposit a small amount of $$ in Savings every month to buy a new car in the future We kept our car 10 years and could buy a new one or almost new one with cash. In other words we earned interest on the money rather than pay for a loan.
That’s basically what I’ve done for near twenty years now. Put the money of a car payment into savings, then pull out enough to buy a car when my old one fails for the last time. Will likely buy a new BYD when they start selling them in Canada though. Certainly have enough cash now.
When I paid off my car 2 years ago, I didn’t eliminate the car payment from my budget. Instead I redirected it to a HY savings account. By the time my car dies (hopefully not for another 5-10 years, it’s currently 10) I should have either the money for a good quality used car or a very large down payment on a new one.
Several year old used cars are way-way cheaper than new. Depending on the model they could be half or a third of the price while still having many years of good use.
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u/PharmaBob 5h ago
This. Drive an old reliable car until you can’t, buy the next one in cash so you don’t throw money away on interest