Financing an older vehicle (03 Cobra)... Who has the best rate?

[chrisheltra]

penfed 1.49%

 

[SVT_BERTO]

Car has 28k miles, would be financing a little over 20k

Loan to value should be ok and the miles are super low. Seems do-able. PM me.

 

[mustangc]

Best Rate: Pay cash. No interest, no risk of repossession, and you get to save the money you would have been paying to the bank for other things like future purchases, building wealth, and giving.

 

[Kiohtee]

Best Rate: Pay cash. No interest, no risk of repossession, and you get to save the money you would have been paying to the bank for other things like future purchases, building wealth, and giving.

Don't you think if he could afford to just pay cash for it he would? I've never understood posts like these.

Not to mention it's nearly impossible for most people to just come up with $20K cash.

 

[520Terminator]

Actually, if you can borrow at a low enough rate, even if you have the cash on hand, it makes more sense to borrow the money. (Time value of money)

 

[SVT_BERTO]

Best Rate: Pay cash. No interest, no risk of repossession, and you get to save the money you would have been paying to the bank for other things like future purchases, building wealth, and giving.

Let's say you have the chance to borrow $30k at a rate of 2% for the next 5 years, would you do it?

I would! Why deplete my liquid assets when I can invest them? The likely hood of a 2% ROI (to break even) isn't unrealistic.

 

[Sick03Vert]

720+ credit score is A-Tier right? Keep in mind we are talking about 10+ year old cars. Banks HATE to loan money on those. Trust me. I sell cars for a living.

^This....my current rate and payments shall forever be undisclosed.

I seriously question 1.9% financing on a 10 year old car. Seriously. Unless you own the bank.

 

[520Terminator]

I got 2.5% on mine, which isn't far off. The key is going with a local Credit Union, and not a large National Bank.

 

[mustangc]

Don't you think if he could afford to just pay cash for it he would? I've never understood posts like these.

Not to mention it's nearly impossible for most people to just come up with $20K cash.

I was just trying to offer a radical option that few rarely consider. Some might be bold enough to suggest that if you don't have the money to pay cash, then you can't afford what you're trying to buy. That Segways directly into my response to your second paragraph, it's easy to save money when you're not having all of your income going back to the bank in the form of payments.

This explains it pretty well:
Don't Buy Stuff | Video | Saturday Night Live | NBC

Let's say you have the chance to borrow $30k at a rate of 2% for the next 5 years, would you do it?

I would! Why deplete my liquid assets when I can invest them? The likely hood of a 2% ROI (to break even) isn't unrealistic.

That is certainly the "sophisticated" way to look at it, but no, I wouldn't. By the time you figure in taxes and risk beta, the potential rewards aren't worth it. Besides, I'd rather take the advice of millionaires than broke finance professors. I can't remember the direct source, but Dave Ramsey quotes a study where some of the wealthiest Americans were asked about the keys to building wealth, and the top response was to get out of and avoid debt. I'm not saying that what you are proposing is wrong, I'm just explaining why I choose not to do that.

 

[SVT_BERTO]

I was just trying to offer a radical option that few rarely consider. Some might be bold enough to suggest that if you don't have the money to pay cash, then you can't afford what you're trying to buy. That Segways directly into my response to your second paragraph, it's easy to save money when you're not having all of your income going back to the bank in the form of payments.

This explains it pretty well:
Don't Buy Stuff | Video | Saturday Night Live | NBC



That is certainly the "sophisticated" way to look at it, but no, I wouldn't. By the time you figure in taxes and risk beta, the potential rewards aren't worth it. Besides, I'd rather take the advice of millionaires than broke finance professors. I can't remember the direct source, but Dave Ramsey quotes a study where some of the wealthiest Americans were asked about the keys to building wealth, and the top response was to get out of and avoid debt. I'm not saying that what you are proposing is wrong, I'm just explaining why I choose not to do that.

Very good point. That's probably why most who are trying to buy homes here in Las Vegas are losing bids to those with large cash down payments or the ability to pay cash for the purchase (mostly investors).