josht
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Do you pay cash for your vehicles, lease, or do you finance your vehicles through a bank?
Josh Thompson
Infinite Banking
You Be the Bank
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Fri Dec 24, 2010 11:23 pm |
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oldguy
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We finance ours, we get a loan for 100% of the vehicle, then sell our old car privately.
We keep a taxable SP500 Index Fund, it grows tax-deferred until we sell some of it. If we sold $33k out of the fund we would use $3k to pay the capital gains tax on our profit and $30k to pay cash for the car.
Instead, we leave our $33k in the fund, and finance the car. Plus we sell the old one for about $4k or $5k and put that with the $33k. The goal is to double the $37,000 in 6 years to $74,000 (an 11% return). And over the past 35 yrs that has been about the average.
We drive them close to 200,000 miles so they are pretty well 'used' when we sell them.
We avoid leases, that is the most expensive type of ownership, you are continually paying the depreciation on a near-new car - using only the top 60,000 miles, and then turning it over to the second owner. Plus, we put regularly drive more than 12,000 miles a year so the over-mileage fines would be expensive.
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Fri Dec 24, 2010 11:54 pm |
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GotCommonCents
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That's extremely risky. You must ask yourself, where would you be if the fund goes down and you lose your job?
My recommendation would be to pay cash for the car. Make sure the total value of all your cars is less than 50% of your take home income. Also, I would suggest buying a slightly used car so you do not take as great of a hit on the loss of value.
For more advice about how to handle your personal finances and manage your life in a way that will be prosperous, check out my blog:
www.GotCommonCents.com
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Wed Mar 30, 2011 2:13 pm |
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littleroc02us
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We save up money and pay cash for used vehicles that already have depreciated for 3 years, they are all usually low milaege and in great condition.
Romans 13:8 “Owe no man any thing, but to love one another: for he that loveth another hath fulfilled the law.”
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Wed Mar 30, 2011 3:41 pm |
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oldguy
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quote:
That's extremely risky.
Well, 'extremely risky' certainly is scary. But how about doing a risk anaylsis, quantifying the risk, evaluating it against other known investments, and looking at risk mitigating measures? Then we could have a useful debate about an investment. The "sky might fall" doesn't add much light?
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Wed Mar 30, 2011 5:40 pm |
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RichS
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That's a tough question to answer because it depends on your own personal situation. If you don't have a down payment maybe you want to lease. If you do have a down payment but don't like car payments maybe you want to buy cash. And so on.
I don't think there is any right way or wrong way only what's the best way for your situation. 
Rich CFP(r)
Writer/Publisher/Speaker
Author "Your In Simple Language Guide to Basic Investments"
www.insimplelanguage.com
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Wed Mar 30, 2011 8:24 pm |
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littleroc02us
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IMO
leasing a car= stupidity, because you are renting a vehicle with payments because you can't afford it.
Financing a car=stupidity, because you can't afford the car or you planning on using the money you would have used to invest in something that may lose money.
Cash for a used car=Smart, because you have no debt and you can buy something cheap if that's all you can afford.
I'm just more of a lower risk type guy. Others like to gamble more.
Romans 13:8 “Owe no man any thing, but to love one another: for he that loveth another hath fulfilled the law.”
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Thu Mar 31, 2011 2:48 pm |
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siymenthomas
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If you are planning to buy a vehicle then you should know how to drive it. In today time the demand of vehicle is increasing day by day. Another thing is that you should know the traffic rules before driving the vehicle.
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Fri Nov 18, 2011 10:51 am |
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Dos
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Though i get my current car thru bank financing i prefer paying it in cash if i have enough money.
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Fri Nov 18, 2011 11:28 pm |
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littleroc02us
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I'm currently saving up to buy a used car with cash and as always it feels great to pay for it immediately and have no bills come in the mail. I guess if you enjoy paying bills and having debt do something else.
Romans 13:8 “Owe no man any thing, but to love one another: for he that loveth another hath fulfilled the law.”
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Mon Nov 21, 2011 2:31 pm |
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nature
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It depend actually, when I have adequate finance, i dont go for loan.
online Car Insurance
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Tue Nov 22, 2011 2:43 pm |
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kelseyahunt
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quote:
Originally posted by littleroc02us
IMO
leasing a car= stupidity, because you are renting a vehicle with payments because you can't afford it.
Financing a car=stupidity, because you can't afford the car or you planning on using the money you would have used to invest in something that may lose money.
Cash for a used car=Smart, because you have no debt and you can buy something cheap if that's all you can afford.
I'm just more of a lower risk type guy. Others like to gamble more.
I think littleroc20us is of a more "rich" mindset than most <--- I agree with him.
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Sat Nov 26, 2011 2:16 am |
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randykk3
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I just love to purchase vehicles of Honda
Its providing best facilities in all over the world and spare parts also available everywhere
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Tue Feb 21, 2012 3:19 am |
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