Originally posted by BitBackShot
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Cash or Loan?
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Originally posted by White Falcon View PostWell it will be a car for my wife. Both are in our 70's, good health, and retired. The cash will not be missed. Have always paid off loans early, guess that is why I don't like loans. Never lived over my means, but very comfortable. Just wanted some thoughts and different opinions. Thanks all!
Cash it will be.
But what if you pay cash for a vehicle and then need the money? Get a loan and use the vehicle for collateral.
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Originally posted by M16 View PostWhen you get a so called 0% car loan the interest is figured in the price. Do you really think you are getting something for free? Usually you can choose between a rebate or an "interest free loan." What ever you do don't finance it if you intend to pay it off right away. If you do you paid for the interest upfront.
People a "0% loan" is not interest free. You just pay interest upfront.
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Originally posted by White Falcon View PostWell not a rich guy with a Rolex on my wrist. (Don't own a watch or cell phone) But you can't take that money with you. Can't see having payments. Thought I would ask. At my age I don't buy GREEN banana"s.
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This may not be relevant to the OP, but enough of y'all are here that maybe someone will know. I have never financed a car so I don't know.
If you finance a car, does the bank require a certain level of insurance coverage to be maintained?
If you finance a car, can you still modify it with aftermarket parts while it's being financed?
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Originally posted by White Falcon View PostWell it will be a car for my wife. Both are in our 70's, good health, and retired. The cash will not be missed. Have always paid off loans early, guess that is why I don't like loans. Never lived over my means, but very comfortable. Just wanted some thoughts and different opinions. Thanks all!
Cash it will be.
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Originally posted by Throwin' Darts View PostYou can explain this over and over and some people will never get it.
People a "0% loan" is not interest free. You just pay interest upfront.
Now do the same math assuming you carry the term out over a 5 year term and you stand to gain $7446.14 if you take the 0% interest loan and invest the 36k at 5% gain/year.
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[QUOTE=35remington;13488894]This may not be relevant to the OP, but enough of y'all are here that maybe someone will know. I have never financed a car so I don't know.
If you finance a car, does the bank require a certain level of insurance coverage to be maintained?
If you finance a car, can you still modify it with aftermarket parts while it's being financed?[/QonUOTE]
If you owe on it you’re required to carry full coverage. And yes, you can modify it.
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Originally posted by westtexducks View PostSo just for giggles some quick numbers on a 40k truck and a 38.5k cash payment. This will be assuming a 0% interest rate loan and a 5% rate of return on an investment over a 3 year period. So if you are getting 5% on a 36k investment assuming you put 4k down on the truck you are looking at $5674.50 return over the 3 year term interest compounded annually. Subtract out the $2500 difference from paying cash and your still $3174.50 in the black that you miss out on by paying cash for your truck. And that is assuming a modest 5% gain and compounded annually so if it compounds more frequently you stand to make more money.
Now do the same math assuming you carry the term out over a 5 year term and you stand to gain $7446.14 if you take the 0% interest loan and invest the 36k at 5% gain/year.
That's great. If there is no risk involved. Otherwise you also have to assume you could lose money as well. So where are you getting the 5% return with no risk? inquiring minds want to know.
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Originally posted by westtexducks View PostSo just for giggles some quick numbers on a 40k truck and a 38.5k cash payment. This will be assuming a 0% interest rate loan and a 5% rate of return on an investment over a 3 year period. So if you are getting 5% on a 36k investment assuming you put 4k down on the truck you are looking at $5674.50 return over the 3 year term interest compounded annually. Subtract out the $2500 difference from paying cash and YOU'RE still $3174.50 in the black that you miss out on by paying cash for your truck. And that is assuming a modest 5% gain and compounded annually so if it compounds more frequently you stand to make more money.
Now do the same math assuming you carry the term out over a 5 year term and you stand to gain $7446.14 if you take the 0% interest loan and invest the 36k at 5% gain/year.
Also, did I miss where you adjusted for the IRS's cut of those stock market gains?
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