Financing vs Cash car purchases
Dave Ramsey makes a really good case for paying cash for cars. For one thing, financing and investing the capital in the stock market should consider the substantial risk that over the time frame being considered, a net loss in the stock market is not at all an uncommon result. One is essentially financing a stock investment with a short term loan which is always fraught with risk. Basically buying on margin. If one has 30K for that new Z and puts it into the stock market while financing the Z, he may well find that 30K going down to 3K--and still take depreciation hit on the Z. Safer, if he wants to invest in the stock market, to pay cash for an older 300 or 350Z and invest the rest. Then he won't lose the car if he misses a few pay checks, even if his stock picks tank.
It is funny how one hears the stock market spoke of as if it were a sure thing when it is setting new record highs and cursed as a gambling den run by thieves when it crashes.
.
|