Lorne34
Project Hidalgo
I don't pay for my cars in cash, but what I always do is purchased used to avoid the up front depreciation hit (bought my 2016 used) and then put a good sizeable down payment on the vehicle so that it stays right side up and my payments are low. I put 10k down and my payments are approx $300/moRisk? It's far more risky to dump $50k+ cash in a depreciating asset, lose 10-20% within the first 90 days and then tie the rate of depreciation of the rest to the amount you use it - all the while losing out on interest you could be making on the cash you just dropped on said asset for no reason.
We're car guys so - we're wasting the money either way.. Unless you're buying something like a Ferrari or GT3 RS and parking it.
But if you're thinking about paying cash for a car - consider this:
You're not saving a dime paying cash, you're losing money.. because the market will pay you more for your cash than the bank will charge you for their credit. So what's the point of swapping your cash for a less liquid depreciating asset?
https://www.kiplinger.com/tool/investing/T041-S001-top-performing-mutual-funds/index.php
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