Some pretty cool info
7/20/04, 06:04 AM
#61
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When deciding between cash and financing you have to compare what your money could be doing if you didnt throw it all down to the car. You could make interest back on another investment. Here is a quick example of what could happen if you did have that much cash laying around:
Option A)
You buy $25000 car in cash. You have paid $25000
Option B-good credit)
You finance $25000 car at 3.9% for 4 years. After 4 years you have paid $27041.28. So financing cost you $2041.28. Here is the catch...If you do have the money up front but qualify for a low interest rate, you can then take that $25000 and invest it at a rate higher than 3.9% to actually end up paying less than $25000 for the car. Since the stock markets inception...there has been an average return of 9%/year. If you invest $25000 for 4 years at 9% interest, you earn $2689 once you factor in losses from the loan payments. So now you have paid a total of $24352 for the same car.
If you do the same exercise with different rates, you can sometimes lose money and sometimes make money. It all depends on how much liquid assests you have, the cost of investment, your credit, and if you actually invest the money or just end up letting it sit and spending it(this is what 90% of americans do when faced with this situation).
So the difference is ~650 bucks which doesnt sound like much when you are talking about a 25k car, but if $650 is nothing to you, you can send me an email requesting my mailing address and I will be expecting a check for $650 made payable to CASH.
Option A)
You buy $25000 car in cash. You have paid $25000
Option B-good credit)
You finance $25000 car at 3.9% for 4 years. After 4 years you have paid $27041.28. So financing cost you $2041.28. Here is the catch...If you do have the money up front but qualify for a low interest rate, you can then take that $25000 and invest it at a rate higher than 3.9% to actually end up paying less than $25000 for the car. Since the stock markets inception...there has been an average return of 9%/year. If you invest $25000 for 4 years at 9% interest, you earn $2689 once you factor in losses from the loan payments. So now you have paid a total of $24352 for the same car.
If you do the same exercise with different rates, you can sometimes lose money and sometimes make money. It all depends on how much liquid assests you have, the cost of investment, your credit, and if you actually invest the money or just end up letting it sit and spending it(this is what 90% of americans do when faced with this situation).
So the difference is ~650 bucks which doesnt sound like much when you are talking about a 25k car, but if $650 is nothing to you, you can send me an email requesting my mailing address and I will be expecting a check for $650 made payable to CASH.
7/21/04, 05:48 PM
#66
Originally posted by scottie1113@July 19, 2004, 4:41 PM
Which ain't gonna happen.
And I will tell you that anytime someone calls me dude in a business environment, the deal, whatever it was, is history.
Yes, I'm old.
Which ain't gonna happen.
And I will tell you that anytime someone calls me dude in a business environment, the deal, whatever it was, is history.
Yes, I'm old.
7/21/04, 05:55 PM
#67
Originally posted by ManEHawke@July 20, 2004, 12:09 AM
If I had 40k and a good stable job i'd pay cash. I'd just haggle a good deal close to invoice but definatley below MSRP. In the long run you pay more if you pay in payments, unless its 0%. with the remaining money you'll have after purchase, you can use it in anyway.
If I had 40k and a good stable job i'd pay cash. I'd just haggle a good deal close to invoice but definatley below MSRP. In the long run you pay more if you pay in payments, unless its 0%. with the remaining money you'll have after purchase, you can use it in anyway.
7/21/04, 07:18 PM
#68
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Originally posted by kevinb120+July 21, 2004, 5:51 PM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (kevinb120 @ July 21, 2004, 5:51 PM)</td></tr><tr><td id='QUOTE'> <!--QuoteBegin-scottie1113@July 19, 2004, 4:41 PM
Which ain't gonna happen.
And I will tell you that anytime someone calls me dude in a business environment, the deal, whatever it was, is history.
Yes, I'm old.
Which ain't gonna happen.
And I will tell you that anytime someone calls me dude in a business environment, the deal, whatever it was, is history.
Yes, I'm old.
[/b][/quote]kevin, sure you can. I wear the title proudly. And I wasn't kidding about the dude thing.
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