Wednesday, January 10, 2007

Should You Buy A Car For Cash Or Finance It?

Some people say "why spend $30k cash when you can invest it and make 15% on your money and use your gains to pay the 8% APR Loan". Easier said than done. No one can guarantee you'll make money investing it, and a car is not an investment, so stop obsessing over the loss. However I subscribe to the view that you can't put a price on not having a payment. I did not have $47k to put down on my first Lexus, so I borrowed $30k and sent in extra principle payments, paying it off a year early, saving on interest. That is more financially sound than people who invested in Enron at $60.

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