To Finance or not to Finance
08-30-2023, 10:36 PM
#31
For sure! At a 8 or 9% rate why would you eat all that interest? No car is that important to set money on fire IMO. Even at the 3-4% rate it's still money you're losing albeit much less. Makes me feel the sting when I have to write the check which makes me really consider how bad I want the car.
a lot of different life circumstances out there
08-30-2023, 11:03 PM
#32
Rennlist Member
Sure I get it different strokes for different folks. I just view these cars as not a necessity. It’s not like you’re financing a car that you need to get you to work or your kids to school. It’s a sports car. It’s also a lot easier to get rid of a car if the title is in hand if you find yourself between a rock and a hard place (God forbid).
09-01-2023, 04:30 PM
#33
Pro
It is about lost opportunity costs.
Looking at simple numbers. $250K loan, BofA is at 6.19%, but you should get a platinum rewards discount, thus less than 6%, but lets use 6 as a whole number. Car loans are simple loans, thus cost to finance will be $39992 ($40k) at 6%.
Vanguards Money Market fund current yield is 5.28%. Thus, if you are extremely conservative, and took your $250K and plunked it down in the money market fund, your spread is <1% (yes there are tax implications). If the money market fund drops yield in the next months-years, you can pay down the loan if you wish, as most loans have no pre-payment penalties. If the money market fund goes up, it makes less sense to pay down the loan. Same would apply to the market. If you are more adventurous, take that $250K and buy all/whichever FAANG (and MS) stock you want, and ignore it for 5 years. Best/realistic case scenario, you at least double your money (thus making your GT car almost free), worst case scenario the stock is worth less in 5 years (and if that is the case, we are all in more finacial trouble than worring about 6% car loan).
Ideally, one would have already taken that money in 2018, and plunked it in the market, and now 5 years later take those gains and pay for the car and preserve your capital for the next 5+ years.
No right/wrong answer, but that is how I look at things.
Looking at simple numbers. $250K loan, BofA is at 6.19%, but you should get a platinum rewards discount, thus less than 6%, but lets use 6 as a whole number. Car loans are simple loans, thus cost to finance will be $39992 ($40k) at 6%.
Vanguards Money Market fund current yield is 5.28%. Thus, if you are extremely conservative, and took your $250K and plunked it down in the money market fund, your spread is <1% (yes there are tax implications). If the money market fund drops yield in the next months-years, you can pay down the loan if you wish, as most loans have no pre-payment penalties. If the money market fund goes up, it makes less sense to pay down the loan. Same would apply to the market. If you are more adventurous, take that $250K and buy all/whichever FAANG (and MS) stock you want, and ignore it for 5 years. Best/realistic case scenario, you at least double your money (thus making your GT car almost free), worst case scenario the stock is worth less in 5 years (and if that is the case, we are all in more finacial trouble than worring about 6% car loan).
Ideally, one would have already taken that money in 2018, and plunked it in the market, and now 5 years later take those gains and pay for the car and preserve your capital for the next 5+ years.
No right/wrong answer, but that is how I look at things.
Last edited by Deven; 09-01-2023 at 04:31 PM.
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09-03-2023, 08:41 PM
#34
Pro
In this current market, I personally will not go for car loan. I would lock in those nice CDs / Money Market Funds etc.
Drop cash and negotiate a better deal with the dealer on the car.
One of these upcoming days, I just want to get that Dakar that I keep showing videos to my wife. Drop cash at the dealer and drive the car away (Dealer better give me free swag, I want my free swag)
Drop cash and negotiate a better deal with the dealer on the car.
One of these upcoming days, I just want to get that Dakar that I keep showing videos to my wife. Drop cash at the dealer and drive the car away (Dealer better give me free swag, I want my free swag)
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09-13-2023, 09:24 AM
#37
Rennlist Member
Or have family that is:
Family Members
We know military families also serve in their own way. Immediate family members include:- Parents
- Grandparents
- Spouses
- Siblings
- Children (including adopted and stepchildren)
- Grandchildren
- Household members
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AlexCeres (09-13-2023)
10-12-2023, 12:42 AM
#38
I would pay cash if you have it. But ... if you're financing:
Library of Congress Federal Credit Union. 3.6% this week.
One hack to join is to become a member of the American Library Association (which is $70/yr)
Library of Congress Federal Credit Union. 3.6% this week.
One hack to join is to become a member of the American Library Association (which is $70/yr)
10-12-2023, 09:18 AM
#39
Burning Brakes
10-13-2023, 03:45 PM
#40
In this current market, I personally will not go for car loan. I would lock in those nice CDs / Money Market Funds etc.
Drop cash and negotiate a better deal with the dealer on the car.
One of these upcoming days, I just want to get that Dakar that I keep showing videos to my wife. Drop cash at the dealer and drive the car away (Dealer better give me free swag, I want my free swag)
Drop cash and negotiate a better deal with the dealer on the car.
One of these upcoming days, I just want to get that Dakar that I keep showing videos to my wife. Drop cash at the dealer and drive the car away (Dealer better give me free swag, I want my free swag)
*spoiler alert* - the dealer will laugh at you.
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AlexCeres (01-12-2024)
10-13-2023, 04:33 PM
#41
In today's world cash isn't king when it comes to buying cars or any high dollar item from a store that offers financing. You can even negotiate slightly more in your favor if you take their financing.
As someone with stellar credit and great banking relationships, I never get the lowest advertised APR for some reason. To the poster above who mentioned the platinum discount through BofA, I get those too but even with my "discounted APR" it's just at, or just above the lowest advertised rate. Point: I almost always get played by BofA so although I consider them, I always shop elsewhere.
My last APR was 2.75%. I'd finance 9/10 times at that rate. With today's rates and given the cost of GT3, I'd just pay cash. The rate above in the 4's is pretty nice though for today.
As someone with stellar credit and great banking relationships, I never get the lowest advertised APR for some reason. To the poster above who mentioned the platinum discount through BofA, I get those too but even with my "discounted APR" it's just at, or just above the lowest advertised rate. Point: I almost always get played by BofA so although I consider them, I always shop elsewhere.
My last APR was 2.75%. I'd finance 9/10 times at that rate. With today's rates and given the cost of GT3, I'd just pay cash. The rate above in the 4's is pretty nice though for today.
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michaeldorian (10-17-2023)
10-16-2023, 04:58 PM
#42
Intermediate
Thread Starter
Ended up paying Cash, appreciate everyone's opinions. I must say... watching $250k+ getting debited from your account stings. I like to quantify things in terms of lap dances... $250,000.00 assuming $20 lappies... is 12,500 consecutive dances... assuming 3 minutes a song.... basically 26 full 24hr days of lappies... stings for sure.
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10-16-2023, 10:11 PM
#44
Rennlist Member
Ended up paying Cash, appreciate everyone's opinions. I must say... watching $250k+ getting debited from your account stings. I like to quantify things in terms of lap dances... $250,000.00 assuming $20 lappies... is 12,500 consecutive dances... assuming 3 minutes a song.... basically 26 full 24hr days of lappies... stings for sure.
10-17-2023, 11:59 AM
#45
Platinum Dealership
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I'd rather think in more practical calculations like rental property down payments, stock/bitcoin purchases, boxster spyders, race weekends
I think maybe my appetite is bigger than paying for something I can get for free
but realistically it's not all or nothing- you can always throw 100k down or whatever ratio that makes sense and try to race against the payment. those fiat money games are why wealthy people enjoy negotiations and finance games.
I think maybe my appetite is bigger than paying for something I can get for free
but realistically it's not all or nothing- you can always throw 100k down or whatever ratio that makes sense and try to race against the payment. those fiat money games are why wealthy people enjoy negotiations and finance games.
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