Quote:
Originally Posted by Killramos
If you are going to borrow money to invest you might as well do that in a way so as to write off the interest.
Promotional below prime rate interest rates often come at the expense of the choice of lower up front cash incentives that make a huge hit in your perceived loan-return arbitrage (the people who set the rates aren't stupid).
Beyond that, I doubt many of the people financing BMW's are doing it at actually doing it at hypothetical 0.9% interest rates. Often not even close.
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I'm not talking about borrowing money to invest, I'm talking about using the cash you might put into a depreciating car to an investment instead.
Sub prime car financing rates are just the norm today, as car prices are inflated. However, the same cash incentives, or lack thereof, are applicable to both cash and financing. There is no real advantage to paying cash as it is a loss of investment opportunity.
I have triple A credit and a low DTI so I qualify for 0.9%. Not sure what the cutoff is, but people are getting it.
I get it though, paying cash is probably what most people should do, because they tend to overlook overall cost of ownership over a monthly payment. However, that's not always the case especially when interest rates are so low.