Did you pay cash for your Z?

JoeD · 10-06-2009, 02:11 AM

Paying cash makes sense...if you can't manage your money.

I don't think it makes much sense to tie up a liquid $40K when you can get a much higher rate of return properly invested/traded than what you pay on a car-loan. Of course, I do that for a living so others might not have the means and know-how to make money in the markets daily, but I can guarantee you almost all broad-based ETFs and non-speculative US equities will rise significantly more than 5-6% within the next year, roughly the APR one would pay on a car-loan.

With every car I've financed, however, I've put down 50% rounded up to a nice, whole number. That is of course if there isn't a good promotional lease-offer from the manufacturer, as depending on the circumstances, leasing is the best way to go...

davidyan · 10-06-2009, 02:17 AM

Quote:

Originally Posted by JoeD

Paying cash makes sense...if you can't manage your money.

I don't think it makes much sense to tie up a liquid $40K when you can get a much higher rate of return properly invested/traded than what you pay on a car-loan. Of course, I do that for a living so others might not have the means and know-how to make money in the markets daily, but I can guarantee you almost all broad-based ETFs and non-speculative US equities will rise significantly more than 5-6% within the next year, roughly the APR one would pay on a car-loan.

With every car I've financed, however, I've put down 50% rounded up to a nice, whole number. That is of course if there isn't a good promotional lease-offer from the manufacturer, as depending on the circumstances, leasing is the best way to go...

I paid cash for mine. I don't necessarily think its a bad thing. If what you're saying is that investments will likely rise
5 - 6% and if thats equal to a good APR, then paying cash for the car is sounder because its a guaranteed avoidance of the 5 - 6 % interest expense whereas with the equity investments, you'll gain 5 - 6% only if things turn out as planned, there's always some downside risk, even if its minimal. If you pay cash for a car, you should have enough reserve cash for investing anyhow.

370Zsteve · 10-10-2009, 01:36 PM

Quote:

Originally Posted by davidyan

I paid cash for mine. I don't necessarily think its a bad thing. If what you're saying is that investments will likely rise
5 - 6% and if thats equal to a good APR, then paying cash for the car is sounder because its a guaranteed avoidance of the 5 - 6 % interest expense whereas with the equity investments, you'll gain 5 - 6% only if things turn out as planned, there's always some downside risk, even if its minimal. If you pay cash for a car, you should have enough reserve cash for investing anyhow.

Um, not to mention the capital gains tax................

370Zsteve · 10-10-2009, 01:37 PM

Oh, and in just a couple of weeks, there will be a new 370z sitting in my garage, and it will be paid for in cash.

TBSS2008 · 10-22-2009, 12:10 PM

Pick up my 370z Sport/Touring/7spd in April 2009 for $40,950.00 (Price includes tax and title). Put down $20,000.00 on the car and will have it paid off by the end of November 2009. I only owe $7,160.00 on the loan right now. I've been throwing a lot of extra cash at my Z about $2,000.00 a month towards principal. I should have saved the money then bought it but I just couldn't wait to get one!

So my Christmas Present this year will be the Title to my 370z!

azn370z · 10-06-2009, 02:19 AM

I'm saving up money now and planning to finance 10k early next year then pay it off after 6 months.

BrianZ · 10-09-2009, 12:09 PM

Quote:

Originally Posted by JoeD

Paying cash makes sense...if you can't manage your money.

I don't think it makes much sense to tie up a liquid $40K when you can get a much higher rate of return properly invested/traded than what you pay on a car-loan. Of course, I do that for a living so others might not have the means and know-how to make money in the markets daily, but I can guarantee you almost all broad-based ETFs and non-speculative US equities will rise significantly more than 5-6% within the next year, roughly the APR one would pay on a car-loan.

With every car I've financed, however, I've put down 50% rounded up to a nice, whole number. That is of course if there isn't a good promotional lease-offer from the manufacturer, as depending on the circumstances, leasing is the best way to go...

No offense, but if you can do much better putting your money elsewhere, why would you put 50% down? Why wouldn't you borrow as much as you possibly could - my credit union will finance 110%.

To answer the OP's question, I paid cash because debt is a dumb thing to have. Debt = risk.

earwicker7 · 10-10-2009, 01:28 PM

Quote:

Originally Posted by JoeD

Paying cash makes sense...if you can't manage your money.

I don't think it makes much sense to tie up a liquid $40K when you can get a much higher rate of return properly invested/traded than what you pay on a car-loan. Of course, I do that for a living so others might not have the means and know-how to make money in the markets daily, but I can guarantee you almost all broad-based ETFs and non-speculative US equities will rise significantly more than 5-6% within the next year, roughly the APR one would pay on a car-loan.

With every car I've financed, however, I've put down 50% rounded up to a nice, whole number. That is of course if there isn't a good promotional lease-offer from the manufacturer, as depending on the circumstances, leasing is the best way to go...

I'm sorry, but this makes absolutely no sense. Paying interest is NEVER better than not paying interest. If I had a dime for every banker/broker/con man who "guaranteed" that something was going to rise by x% in the next year, I could pay cash for a Ferrari

.

And, yes, I did pay cash for my car. There is no way in hell I'm paying someone money for the purpose of keeping a car that I don't own; this is the same reason I don't "own" a credit card... if I can't afford to pay cash, I don't need it.

370Zsteve · 10-22-2009, 12:17 PM

Originally Posted by JoeD

Paying cash makes sense...if you can't manage your money.

I don't think it makes much sense to tie up a liquid $40K when you can get a much higher rate of return properly invested/traded than what you pay on a car-loan. Of course, I do that for a living so others might not have the means and know-how to make money in the markets daily, but I can guarantee you almost all broad-based ETFs and non-speculative US equities will rise significantly more than 5-6% within the next year, roughly the APR one would pay on a car-loan.

With every car I've financed, however, I've put down 50% rounded up to a nice, whole number. That is of course if there isn't a good promotional lease-offer from the manufacturer, as depending on the circumstances, leasing is the best way to go...

Quote:

Originally Posted by earwicker7

I'm sorry, but this makes absolutely no sense. Paying interest is NEVER better than not paying interest. If I had a dime for every banker/broker/con man who "guaranteed" that something was going to rise by x% in the next year, I could pay cash for a Ferrari

.

And, yes, I did pay cash for my car. There is no way in hell I'm paying someone money for the purpose of keeping a car that I don't own; this is the same reason I don't "own" a credit card... if I can't afford to pay cash, I don't need it.

LOL, big +1 for earwicker7

Matt · 10-22-2009, 12:22 PM

Since I've been investing, my 4 investment accounts have all averaged above 8%, 2 of them above 14% over the last 10 years.

The interest I pay on my car is 3.9%.

I'm no mathematician, but it appears that there are better places to allocate my capital than to a car.

370Zsteve · 10-22-2009, 12:27 PM

Quote:

Originally Posted by Matt

Since I've been investing, my 4 investment accounts have all averaged above 8%, 2 of them above 14% over the last 10 years.

The interest I pay on my car is 3.9%.

I'm not mathematician, but it appears that there are better places to allocate my capital than to a car.

Impressive, Matt. You manage your own portfolio?

Matt · 10-22-2009, 12:35 PM

Quote:

Originally Posted by 370Zsteve

Impressive, Matt. You manage your own portfolio?

I'm not a professional investor by any means. I'm a self-taught investor, and only know enough to keep good debt in check and bad debt far away. I tried day-trading for about a year, and lost my *** on it.

I don't really "manage" much. I researched which funds had the potential for the gains I wanted, at the risk that I can afford (being 26 years young). I have a few accounts with Royce, T. Rowe Price, and Fidelity, as well as a 401k with 100% match at 6%.

I wish I knew as much as some of those guys in the off-topic area that discuss investing.

370Zsteve · 10-22-2009, 12:40 PM

Quote:

Originally Posted by Matt

I'm not a professional investor by any means. I'm a self-taught investor, and only know enough to keep good debt in check and bad debt far away. I tried day-trading for about a year, and lost my *** on it.

I don't really "manage" much. I researched which funds had the potential for the gains I wanted, at the risk that I can afford (being 26 years young). I have a few accounts with Royce, T. Rowe Price, and Fidelity, as well as a 401k with 100% match at 6%.

I wish I knew as much as some of those guys in the off-topic area that discuss investing.

You are one smart 26-yr old investor, don't talk yourself down. I started when I was 25 yrs old. Your attitude and ability alone will make you a ton of money over the years. Good luck to you.

10-10-2009, 01:37 PM	#4 (permalink)
370Zsteve A True Z Fanatic Join Date: Sep 2009 Location: Gold Coast CT Posts: 10,599 Drives: 2019 Corvette G.S. Rep Power: 43	Oh, and in just a couple of weeks, there will be a new 370z sitting in my garage, and it will be paid for in cash. __________________ SOLD MY Z MARCH 2018 - another Core OG moves on - new ride 2019 Z Corvette Grand Sport - no mods necessary but already have eyes on HFC and intakes LOL IT NEVER ENDS.

10-22-2009, 12:10 PM	#5 (permalink)
TBSS2008 Base Member Join Date: Apr 2009 Location: Texas Posts: 195 Drives: 11 Corvette GS 6spd Rep Power: 17	Pick up my 370z Sport/Touring/7spd in April 2009 for $40,950.00 (Price includes tax and title). Put down $20,000.00 on the car and will have it paid off by the end of November 2009. I only owe $7,160.00 on the loan right now. I've been throwing a lot of extra cash at my Z about $2,000.00 a month towards principal. I should have saved the money then bought it but I just couldn't wait to get one! So my Christmas Present this year will be the Title to my 370z! __________________ 2011 Black Corvette Grand Sport 6spd \| NNP Daul Mode Exhaust 2008 Trail Blazer SS Black \| SuperChips Tune 2009 370Z Black 7AT Touring Sport (TRADED)

10-06-2009, 02:19 AM	#6 (permalink)
azn370z A True Z Fanatic Join Date: Nov 2008 Location: Seattle Posts: 1,722 Drives: z34 - R1 Rep Power: 490	I'm saving up money now and planning to finance 10k early next year then pay it off after 6 months. __________________ 2010 k23 H&R sport springs / Spc rear camber arms / SSR SP1 / Berk cbe / Varis cf lip / Nismo S-Tune side skirts

10-22-2009, 12:22 PM	#10 (permalink)
Matt A True Z Fanatic Join Date: Oct 2009 Location: Augusta, GA Age: 42 Posts: 1,680 Drives: 2010 Avalanche LT Rep Power: 19	Since I've been investing, my 4 investment accounts have all averaged above 8%, 2 of them above 14% over the last 10 years. The interest I pay on my car is 3.9%. I'm no mathematician, but it appears that there are better places to allocate my capital than to a car. Last edited by Matt; 10-22-2009 at 10:50 PM.

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10-06-2009, 02:11 AM	#1 (permalink)
JoeD Banned Join Date: Aug 2009 Location: CA Posts: 495 Drives: Z Rep Power: 0	Paying cash makes sense...if you can't manage your money. I don't think it makes much sense to tie up a liquid $40K when you can get a much higher rate of return properly invested/traded than what you pay on a car-loan. Of course, I do that for a living so others might not have the means and know-how to make money in the markets daily, but I can guarantee you almost all broad-based ETFs and non-speculative US equities will rise significantly more than 5-6% within the next year, roughly the APR one would pay on a car-loan. With every car I've financed, however, I've put down 50% rounded up to a nice, whole number. That is of course if there isn't a good promotional lease-offer from the manufacturer, as depending on the circumstances, leasing is the best way to go...