Quote:
Originally Posted by jmg
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.
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Had this exact same conversation with a newly "monied" friend who was looking to drop $75K on a pick up before these shortages messed the market up. Dude has smoking credit and the offers were there. I hate telling the wrong people to take on debt, but he hates debt and invests well, so let that $ make you a lot of money, not save you a little. With the recent market gains he made doing so - he could pay it off now if he wanted and still be way ahead.
If you are disciplined and smart - it's a solid option. I hate debt too, but not enough to lose $ over it. I always stay semi-liquid enough to always be able to be debt free at the drop of a hat if need be, so not a ton of risk for me.