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WWYD?

Anonymous
Posted by Anonymous
  • 11 Replies

Buying a car, you have two choices.  Assume you pay the same price for the car, just say $40,000.

1) Pay all cash for the car, no car payment

2) Finance the car at 1% interest or less for 5 years.....meanwhile you take the $40,000 and put it into a brokerage account that earns at least 6% interest per year....your car payments come out of the brokerage account.

I'd rather pay cash for a car, just me, I hate car payments.  DH would rather make some extra $$ and finance the car around 1%......figuring we could profit and earn a little more interest.

Posted by Anonymous on Aug. 10, 2014 at 7:01 PM
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Replies (1-10):
Anonymous
by Anonymous 2 on Aug. 10, 2014 at 7:10 PM
Now a days if you can make 6% on an investment in 1 year - you are extremely lucky, cause you rarely find those deals.
MixedCooke
by Ruby Member on Aug. 11, 2014 at 1:51 AM

im with your husband on this decision.  Most people lose money when they purchase a car and this time around you could actually earn some!

Yellow_Lileigh
by Gold Member on Aug. 11, 2014 at 1:53 AM
1 mom liked this
That's what I'm wondering. How are you guaranteed 6%? Seems like a risk to me if you're counting on it to make your car payment.

Quoting Anonymous: Now a days if you can make 6% on an investment in 1 year - you are extremely lucky, cause you rarely find those deals.
Anonymous
by Anonymous 1 - Original Poster on Aug. 11, 2014 at 1:54 AM


Quoting MixedCooke:

im with your husband on this decision.  Most people lose money when they purchase a car and this time around you could actually earn some!

I came to a compromise with DH, I agreed we could finance the car provided that we put the cash value of the car into a brokerage account....we agreed all the car payments will come out of this account and this $$ will be set aside for the car only, in case we needed to pay it off right away.

Anonymous
by Anonymous 1 - Original Poster on Aug. 11, 2014 at 1:57 AM


Quoting Yellow_Lileigh: That's what I'm wondering. How are you guaranteed 6%? Seems like a risk to me if you're counting on it to make your car payment.
Quoting Anonymous: Now a days if you can make 6% on an investment in 1 year - you are extremely lucky, cause you rarely find those deals.

It's not a guarantee, but if you pick a good mutual fund it will have it's ups and downs, and eventually, you hope, will make you a little money.  

MixedCooke
by Ruby Member on Aug. 11, 2014 at 2:03 AM

 I hate to carry debt myself, so if anything, the closer you get to paying it off, start making double payments on it.

Quoting Anonymous:

 

Quoting MixedCooke:

im with your husband on this decision.  Most people lose money when they purchase a car and this time around you could actually earn some!

I came to a compromise with DH, I agreed we could finance the car provided that we put the cash value of the car into a brokerage account....we agreed all the car payments will come out of this account and this $$ will be set aside for the car only, in case we needed to pay it off right away.

 

Yellow_Lileigh
by Gold Member on Aug. 11, 2014 at 2:04 AM
That's why I probably wouldn't be relying on it to make my car payments. I'd just pay cash and then focus on accumulating enough money for a good mutual fund later. Separate from the car. That's just me though.

Quoting Anonymous:

Quoting Yellow_Lileigh: That's what I'm wondering. How are you guaranteed 6%? Seems like a risk to me if you're counting on it to make your car payment.

Quoting Anonymous: Now a days if you can make 6% on an investment in 1 year - you are extremely lucky, cause you rarely find those deals.

It's not a guarantee, but if you pick a good mutual fund it will have it's ups and downs, and eventually, you hope, will make you a little money.  

Yellow_Lileigh
by Gold Member on Aug. 11, 2014 at 2:05 AM
That seems like a smart compromise.

Quoting Anonymous:

Quoting MixedCooke:

im with your husband on this decision.  Most people lose money when they purchase a car and this time around you could actually earn some!

I came to a compromise with DH, I agreed we could finance the car provided that we put the cash value of the car into a brokerage account....we agreed all the car payments will come out of this account and this $$ will be set aside for the car only, in case we needed to pay it off right away.

MrsD.Duvall
by Silver Member on Aug. 11, 2014 at 2:05 AM
I'm not the gambling type. I would just pay cash for the car and be done with it.
TaylorFam02
by Platinum Member on Aug. 11, 2014 at 2:19 AM
We pay cash for everything or do without. So I would go with the cash.

Quoting Anonymous:

Buying a car, you have two choices.  Assume you pay the same price for the car, just say $40,000.

1) Pay all cash for the car, no car payment

2) Finance the car at 1% interest or less for 5 years.....meanwhile you take the $40,000 and put it into a brokerage account that earns at least 6% interest per year....your car payments come out of the brokerage account.

I'd rather pay cash for a car, just me, I hate car payments.  DH would rather make some extra $$ and finance the car around 1%......figuring we could profit and earn a little more interest.

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