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Just pay cash. No need to deal with banksters. god forbid you miss a payment by a day - they will fleece you with late fees.
Also, car finance forces you to buy full coverage insurance instead of liability - extra $600/year. If you can pay cash for a car - you can afford to "self insure" - which is much much cheaper.
So, in two years you'll save about $400 in bankster fleece, plus $1200 in insurance fleece = $1600, or 13.3%.
don't worry about the probability of totalling your car and that being your fault - if you didn't have your-fault accident in last ten years, chances are you won't have the same in next 10 years. Insurance companies know the probability much better than you, and looking at their high-rise cushy buildings downtown - they are not exactly losing money on your policy.
CL
2012 Jul 18, 8:07am
Finance the car, buy in the money AAPL call LEAPS with the cash.
Agreed. If your money can beat 2% in investing, why not?
If you finance & the dollar collapses then you can pay off the loan with worthless cash. As for me I'm against debt.
FortWayne
2012 Jul 19, 12:37am
I'd pay cash. There is no benefit out of paying interest, you only lose money that way.
It would be worth it to finance if what you got from your CD/savings was higher than the interest rate. But it's not, so you are better off paying cash. Besides it's a lot less things to worry about.
What kind of Honda is it? Have you kbb'd the value of it? Also I'd suggest you have someone inspect the basics. Or at least plug in a scanner into it to see if it's throwing any codes (just in case)... any local mechanic can probably do it for free as it doesn't cost anything.
Guys, you keep ignoring the insurance cost increase and risk.
Financing a depreciating asset that must be fully insured is never a good idea.
Cars seem to get better mileage when not dragging the payment book - quoting Dave Ramsey :)
joshuatrio
2012 Jul 19, 1:41am
What kind of Honda is it? Have you kbb'd the value of it? Also I'd suggest you have someone inspect the basics.
CR-V. One owner. Low mileage. Seems legit, meet with them today. VIN came back clean and the owner has all the oil change records.
I worked in a body shop for a few years, know how to look for body work, turned bolts, etc... Plus, I've been a Honda nut my whole life, so I'm pretty familiar with how they should sound.
Alright guys. After being without a car for a year, I need to buy one.
Found a good deal on a low mileage, 2006 Honda. $12k.
Should I pay in cash, or finance @ 2.x% interest rate for a couple years just for credit purposes sake. It would only work out to a few hundred bucks in interest over the life of the loan, and bump my credit score up a few more points.
Either way, I can comfortably pay for the car outright... but it's not like a couple hundred bucks in interest bothers me over a couple years.
Any input appreciated.