Buying a car with cash

[IowaSkinsFan]

Hey guys,

I'm thinking of buying a car in the 20-30k range at a dealership. My initial thoughts are jaguar or a nissan altima.

What are peoples thoughts on buying a car with cash? Like, yes, people pay with checks all the time but im literally thinking bring cash and all to the dealership. Let's estimate i buy a car thats listed at 25k. How much should I bring? How much should I offer at first? Any tips would be appreciated.

Thanks,
-Danny

[BennyLaRue]

I'm thinking of buying a car in the 20-30k range at a dealership. My initial thoughts are jaguar

Are you hoping to buy new? Jags will be out of your price range...$40k and up.

[mrhappy333]

bringing that much cash to the dealership might freak them out. Alot of Dealerships a hurting for $$$ so, you should have a good position for negotiating. Also see if they offer a Cashback rebate.
There are so many variables as what you can negotiate. Floor matts, Sattelite radio, Oil Changes, Gas cards, simonizing, all kinds of shit. Alloy rims, tinted windows.
so to just say 20% less wouldnt work here.

[will641]

plz dont buy a jag. buy the lexus isf!!! its so +ev for so many reasons.

[ensign_lee]

Yes, dealerships are hurting for cash, but bringing a buttload of cash like that is just taking an unneccessary risk of getting robbed.

You'll hav ejust as much negotiating leverage even if you don't bring a suitcase of cash.

If you want help, I run a car price negotiation service on the side (http://www.50plus50.com/) and would be glad to help you out some.

[Stacks]

Yes ISF.. We all know your ballin.. No need for this

[poker_pup]

I've only ever heard of one guy who got a discount for buying a car with $100 bills and it was years ago. The last time I bought a car, someone at the dealership told me that they prefer to finance the car.

Just guessing here, but I think paying cash would work best at a small dealership and for a used car.

[Ltrain]

Have you tried looking into ebay motors? If you have the cash, see what you can do as a price comparison before going to the dealership. You will get the best value on a car about 4-5 years old with a regular service history; at that point most of the depreciation has been absorbed.

[givememyleg]

gives you a lot more power to make an offer, make sure you talk them down a good amount yo

[thizzSantaCruz]

just get a cashiers check, its a lot more wieldy than bricks of cash. and you still retain negotiating power, write it out for as much as your willing to pay and show it to them. tell them to take or leave it.

[mixchange]

always walk always at least once

[Jack Sawyer]

http://www.autowp.ru/pictures/audi_r...y_rieger_5.jpg

[flomo]

always walk always at least once

this

and figure out which exact model you want before handling any money--look online at what the best offers(such as E. Lee's site) are for that particular model(such as Honda Civic Coupe EX)

don't forget any amount of cash over $10,000 will be reported to the feds

i'll stop for now

[Galapogos]

Pay them with 20's.

[andy-akb]

wait, so your car finally died?

[boost]

nissan altima is fine, but extremely unballa. Jag's are trash now-adays imo. The new styling looks awesome from select angles, but all together its just an misguided leap into a more modern styling. Also jags are not known for being reliable. And on top of that if you want to buy new, they are out of your price range.

Also, dont bring a bag of cash. Its cool in the movies, but in reality it would just be awkward and they probably would tell you to go get a cashiers check. They have no interest in handling all that cash imo. And like someone else said, they prefer to finance. You should probably prefer to finance too if you have decent credit. Tying up 30k in a depreciating asset is not smart. You should be able to out earn the interest you pay. Just like you almost always take the lump sum lottery payment because of the earning power the lump sum has over installments.

[will641]

wait, so your car finally died?

either that or he decided to stop being a donk and just buy a new one. i'm hoping its the latter although if i were to bet i would say the former.

[mcatdog]

What everyone else said, just bring a cashier's check.

You should probably prefer to finance too if you have decent credit. Tying up 30k in a depreciating asset is not smart. You should be able to out earn the interest you pay.

I'm not sure what you mean by this but I'm pretty sure it's wrong. Danny has enough money that he doesn't need that 30K for his poker bankroll. In today's economy, if you invest the 30K in something else outside of poker, it's gonna be real tough to out earn the interest you're paying on the loan.

Also I agree with you on new Jaguars being trash, they used to be such nice cars, so sad that they ruined them.

[kb coolman]

You should probably prefer to finance too if you have decent credit. Tying up 30k in a depreciating asset is not smart.

This is completely wrong. Financing is for people who don't have the money to afford the full price of the asset at the time, period. It should be used sparingly, for homes only, IMO. And you're money isn't 'tied up' when you make a purchase. You're money is clear, and so is the asset. You're money is only 'tied up' when is it obligated towards future payments, i.e., a loan.

And there's nothing wrong with driving a $1000 beater, and I don't car what your financial status is. Some of the wealthiest people I know, who are also some of the wisest money managers I've ever met, buy only used cars to avoid the initial depreciation.

[Alexos]

Lexus ISF... I mean, you have no other choice rly, sorry.

[Alexos]

You should probably prefer to finance too if you have decent credit. Tying up 30k in a depreciating asset is not smart.

This is completely wrong. Financing is for people who don't have the money to afford the full price of the asset at the time, period. It should be used sparingly, for homes only, IMO. And you're money isn't 'tied up' when you make a purchase. You're money is clear, and so is the asset. You're money is only 'tied up' when is it obligated towards future payments, i.e., a loan.

And there's nothing wrong with driving a $1000 beater, and I don't car what your financial status is. Some of the wealthiest people I know, who are also some of the wisest money managers I've ever met, buy only used cars to avoid the initial depreciation.

I disagree with most of this. Your money is "tied up" when u make a cash purchase. If you take financing at 2% and use that money to invest at 8% instead, how are you losing money?

Yeah there are advantages to not having a loan, but having your money tied up isn't one of them.

[kb coolman]

Your money is "tied up" when u make a cash purchase. If you take financing at 2% and use that money to invest at 8% instead, how are you losing money?

Yeah there are advantages to not having a loan, but having your money tied up isn't one of them.

The math is logical, right? Spend 2% here for 8% there, right? The problem is that it doesn't take into account risk. Investments are risk. Just take a look at the current stock market if you need further proof.

And FWIW, I've made this argument over and over in the past, and came to understand that it was flawed. What I learned is that personal finance is much more driven by behavior than math. If all your purchase decisions were truely driven by math, you would never finance anything. Paying cash is always the cheapest way to aquire anything, be it goods or services.

There is a reason why car companies prefer to finance. It makes them more money. It benefits them, not you, but for some reason the general public makes purchases based on monthly payments, not on total cost of ownership. The fact that most people make purchases of any magnitude with credit just shows how well financing companies market thier services. The argument could easily be made that the larger the purchase, the more ignorant it is to finance, as it costs you more in interest.

Read books such as 'Millionaire Mind" or "Millionaire Next Door", and you'll find out that the truely wealthy among us do not make such poor financial decisions.

[Squeaky_Midget1]

Until 5 months ago I worked in the car business, and here's my take on it. Paying with cash is perfectly acceptable. (i'm sure you know that this purchase will be reported to the IRS, so I hope you claimed this money in one way or another!) On average about 3% markup in new cars and ~12-13% on used. After you decide what car you want and ready to talk numbers, the salesman and managers goal is to peel you off the ceiling number wise to make more profit. Your job is to lowball the shit out of them on your first offer and scoop THEM off the floor! Because they would rather sale a car and only make $500 then have you walk. After you negotiated price, when the salesman brings you a buyers order, which is just a list of all final numbers, there will be all sorts of fees. Make it CLEAR, you will not pay the doc fee...it is 100% dealership profit.(usually $379 or $429). Most people don't know this but the Finance Manager who does all the final paperwork is a salesman. Extended warranty's are the only thing of value he will offer and even that is negotiable. You can usually ask for ~$500 off that. If you decide what you want just post it in here and I should know someone at the kind of dealership here in town and can get some more solid numbers for you as far as markup, invoice, yadda yadda yadda.

[mrhappy333]

car salesmen = snakes IMO

[boost]

car salesmen = snakes IMO

true, my sister is one.

[boost]

as for people advocating a cash purchase, you could be right, but I think ts heavily dependent no several factors. One being the current economic climate, this one works in your arguments favor. The other that immediately comes to mind is the buyers net worth in relation to the cost of the item. Not sure what this is for Danny.

Oh and just because it is good for the dealership to finance doesnt make it bad for you. Its good for the dealership to sell cars, does this make buying a car bad for you? They are selling you a service, it doesnt make that service a negative thing.

If you do decide to go with cash, DO NOT under any circumstances reveal that you are buying with cash until you have settled on a price you are happy with. And I mean completely settled. Dont let them give you a price, find out youre paying cash, then try and tack on docking fees and transport fees. You get the number you are happy with, out the door, then tell them you will be paying cash instead of financing. You may have to lead them on and let them believe you are financing to get the best deal. This works because they will be willing to possibly sell at invoice because they are raping you on financing.

[wufwugy]

just work for an extra four hours this week

[a500lbgorilla]

invest a few k in the nicest suit you can find. Walk into the dealership with bitches on each arm and a few in reserve if possible (im assuming this will be no problem). The first person to walk up to you is gonna be king of the hill 'round the dealership. Take out about a grand in 20s and slap him right in the face with them. Find the doe-eyed trainee in the back corner and send one of your ladies to fetch him. Tell him that you're buying a car for your jewish friend and personal confidant who would just die if you paid more than $15,000. When hits you with 25k or whatever price, tell him you'd be willing to tip 5k plus whatever you just rained all over that douche bag that tried to get in your way. If he's not willing to budge on his price, fold up a c-note in the palm of your hand and slap him across the face. Try to leave a mark. On your way out, tell your ladies they can keep any loose cash you left laying around in the dealership. Fire up an expensive cigar and laugh as those bitches tackle salesman and make them wonder how their lives managed to come to this.

You won't save money, but sometimes you just need to realize that years from now when poker is as dried up as bigred's mom, all you'll have are the stories. It's worth the investment.

[a500lbgorilla]

car salesmen = snakes IMO

true, my sister is one.

Can she unhinge her jaw?

[Squeaky_Midget1]

If you do decide to go with cash, DO NOT under any circumstances reveal that you are buying with cash until you have settled on a price you are happy with. And I mean completely settled. Dont let them give you a price, find out youre paying cash, then try and tack on docking fees and transport fees. You get the number you are happy with, out the door, then tell them you will be paying cash instead of financing. You may have to lead them on and let them believe you are financing to get the best deal. This works because they will be willing to possibly sell at invoice because they are raping you on financing.

I love reading your posts man, but this is pretty far from the truth. Your method of payment has no effect on the price of the car. They can't legally just add random shit onto your bill. Sales and Finance are 2 completely different departments. The F&I manager will be pissed your paying cash and stress warranties and undercoat snake oil to make money, but the sales department will be happy just to send one over the curb. Dealerships aren't as shady as most think.

[boost]

epic

[IowaSkinsFan]

Squeaky Midge,

I was planning to go over to falls church to start looking. What place near DC do you recommend going? I will def be in contact with you when I decide on something.

[Squeaky_Midget1]

Squeaky Midge,

I was planning to go over to falls church to start looking. What place near DC do you recommend going? I will def be in contact with you when I decide on something.

I can't really recommend a specific dealership since I'm not familiar with the area. Once you figure out exactly what kind of car you want and if you want new or used just pm me. I can make a few calls and find you invoice price, wholesale value, dealer cash,holdback, etc. all the good inside info

[mrhappy333]

invest a few k in the nicest suit you can find. Walk into the dealership with bitches on each arm and a few in reserve if possible (im assuming this will be no problem). The first person to walk up to you is gonna be king of the hill 'round the dealership. Take out about a grand in 20s and slap him right in the face with them. Find the doe-eyed trainee in the back corner and send one of your ladies to fetch him. Tell him that you're buying a car for your jewish friend and personal confidant who would just die if you paid more than $15,000. When hits you with 25k or whatever price, tell him you'd be willing to tip 5k plus whatever you just rained all over that douche bag that tried to get in your way. If he's not willing to budge on his price, fold up a c-note in the palm of your hand and slap him across the face. Try to leave a mark. On your way out, tell your ladies they can keep any loose cash you left laying around in the dealership. Fire up an expensive cigar and laugh as those bitches tackle salesman and make them wonder how their lives managed to come to this.

You won't save money, but sometimes you just need to realize that years from now when poker is as dried up as bigred's mom, all you'll have are the stories. It's worth the investment.

this would be fun to watch. youtubes. EPIC

[thizzSantaCruz]

Lexus ISF... I mean, you have no other choice rly, sorry.

Plus its bad ass as fuck, fast as fuck, interior is nice as fuck, steering is real tight, no wiggle at all, AND its a chick magnet. End of discussion.

[Lukie]

why are so many people under the misguided impression that dealerships will give you a better deal if you pay with cash? (i.e. check)

It's not the case. They are getting the money through the bank either way. Or if you finance through the dealership, they are making even more money (meaning they'd prefer that you finance).

As far as literally paying in cash, that's just stupid. It's inferior in every way to just writing a check, and you won't look like a baller either. You'll look like an idiot.

[Lukie]

study before you buy:

http://www.edmunds.com/
http://www.carbuyingtips.com/carintro.html

[Xianti]

I agree with the others. What's the point of bringing it in cash?

[will641]

As far as literally paying in cash, that's just stupid. It's inferior in every way to just writing a check, and you won't look like a baller either. You'll look like an idiot.

QFT.

[DrivingDog]

Bringing cash only makes sense if you're buying a car from a private seller, as in you're getting close to making a deal and you pull out a wad of cash and say something along the lines of 'here's all the money i have - take it or leave it'. Most people have a very hard time refusing unless your offer is ridiculously low.

The dealers don't give a shit whether it's cash or a check - their commission's the same either way. So unless you enjoy the risk of possibly getting robbed, there's nothing to recommend it.

And yeah, dealers do prefer you to finance the car through them because it's another way they can add to their profits by charging you a high rate. If you need finance go to your bank.

[boost]

If you do decide to go with cash, DO NOT under any circumstances reveal that you are buying with cash until you have settled on a price you are happy with. And I mean completely settled. Dont let them give you a price, find out youre paying cash, then try and tack on docking fees and transport fees. You get the number you are happy with, out the door, then tell them you will be paying cash instead of financing. You may have to lead them on and let them believe you are financing to get the best deal. This works because they will be willing to possibly sell at invoice because they are raping you on financing.

I love reading your posts man, but this is pretty far from the truth. Your method of payment has no effect on the price of the car. They can't legally just add random shit onto your bill. Sales and Finance are 2 completely different departments. The F&I manager will be pissed your paying cash and stress warranties and undercoat snake oil to make money, but the sales department will be happy just to send one over the curb. Dealerships aren't as shady as most think.

I mean... my sister sells cars.. and tells me all about this shit.. but ok?

[BennyLaRue]

And yeah, dealers do prefer you to finance the car through them because it's another way they can add to their profits by charging you a high rate. If you need finance go to your bank.

Not sure what dealers are doing in the UK, but many in North America are offering extremely low interest rates, often 0% financing with no fees. It's usually much better to finance through the dealer than the bank but, of course, buyers should look at both options in specific situations.

[Alexos]

Your money is "tied up" when u make a cash purchase. If you take financing at 2% and use that money to invest at 8% instead, how are you losing money?

Yeah there are advantages to not having a loan, but having your money tied up isn't one of them.

The math is logical, right? Spend 2% here for 8% there, right? The problem is that it doesn't take into account risk. Investments are risk. Just take a look at the current stock market if you need further proof.

And FWIW, I've made this argument over and over in the past, and came to understand that it was flawed. What I learned is that personal finance is much more driven by behavior than math. If all your purchase decisions were truely driven by math, you would never finance anything. Paying cash is always the cheapest way to aquire anything, be it goods or services.

There is a reason why car companies prefer to finance. It makes them more money. It benefits them, not you, but for some reason the general public makes purchases based on monthly payments, not on total cost of ownership. The fact that most people make purchases of any magnitude with credit just shows how well financing companies market thier services. The argument could easily be made that the larger the purchase, the more ignorant it is to finance, as it costs you more in interest.

Read books such as 'Millionaire Mind" or "Millionaire Next Door", and you'll find out that the truely wealthy among us do not make such poor financial decisions.

You're making the assumption that your "untied money" is useless. It's not. Yes some investments are risky, but it looks to me that even if im saying u can get 3% guaranteed investment (no risk) and the loan costs 2%, you'll still find an argument against buying it on credit!

Some loans are good, some are bad, you just need to see the difference between each. The "truly wealthy" among us make smart decisions, sometimes buying on credit is best.

[Lukie]

If you do decide to go with cash, DO NOT under any circumstances reveal that you are buying with cash until you have settled on a price you are happy with. And I mean completely settled. Dont let them give you a price, find out youre paying cash, then try and tack on docking fees and transport fees. You get the number you are happy with, out the door, then tell them you will be paying cash instead of financing. You may have to lead them on and let them believe you are financing to get the best deal. This works because they will be willing to possibly sell at invoice because they are raping you on financing.

I love reading your posts man, but this is pretty far from the truth. Your method of payment has no effect on the price of the car. They can't legally just add random shit onto your bill. Sales and Finance are 2 completely different departments. The F&I manager will be pissed your paying cash and stress warranties and undercoat snake oil to make money, but the sales department will be happy just to send one over the curb. Dealerships aren't as shady as most think.

They can add whatever they want onto your bill-- all you have to do is sign it.

Even reputable dealerships will try to get you every way possible. Whether it be one of a hundred fees they make up, some sort of stupid financing gimmick (THE COMPUTER *NEVER* MESSES UP, EVER), or whatever, they are in the business of making as much money as possible. Most people come in very uninformed and are easy prey. Even selling the car at invoice is somewhat of a misnomer because the car might cost them 3% or so less than invoice. Then somehow they get these idiots to pay sticker then tack on all sorts of fees on top, give shitty financing, and sell a bottle of fabric protector for 10,000% of what it cost. It's funny and sad at the same time.

That's why I encourage people to do their research BEFORE they go looking for cars. All you have to do is go online and do a search and find out what people are paying, determine a good deal, and YOU set the price. If they don't meet it, walk.

[boost]

my sister has told me about guys at her dealership pulling off the ultimate sell... selling ABOVE sticker...

[kb coolman]

You're making the assumption that your "untied money" is useless.

wat? 'Untied' money has the most value.

Yes some investments are risky, but it looks to me that even if im saying u can get 3% guaranteed investment (no risk) and the loan costs 2%, you'll still find an argument against buying it on credit!

All investments carry risk. Some more than others, but all have some measure of risk. But that's beside the point. Borrowing at 2% to invest a 3% is retarded, as is borrowing at 0% from a credit card to invest at 10%. The number of people who can do this profitably is ridiculously low, almost non-existant. Most people don't realize that finance companies WANT you to default on some portion of the contract. Late fees, over the limit, rate resets, etc, will quickly overwhelm any perceived finacial advantage.

The real problem with buying on credit is that is makes assumptions on future earnings that are not guaranteed, and that's the risk most people are not willing to consider. I live by the mantra that if you have to borrow the money, you can't afford it. The only exceptions I make to this are for housing (historically, every 10 year period in the US housing market has been profitable), and for education, where the financial benefit of having a degree has been proven over and over again.

[meeloche]

You're making the assumption that your "untied money" is useless.

wat? 'Untied' money has the most value.

Yes some investments are risky, but it looks to me that even if im saying u can get 3% guaranteed investment (no risk) and the loan costs 2%, you'll still find an argument against buying it on credit!

All investments carry risk. Some more than others, but all have some measure of risk. But that's beside the point. Borrowing at 2% to invest a 3% is retarded, as is borrowing at 0% from a credit card to invest at 10%. The number of people who can do this profitably is ridiculously low, almost non-existant. Most people don't realize that finance companies WANT you to default on some portion of the contract. Late fees, over the limit, rate resets, etc, will quickly overwhelm any perceived finacial advantage.

The real problem with buying on credit is that is makes assumptions on future earnings that are not guaranteed, and that's the risk most people are not willing to consider. I live by the mantra that if you have to borrow the money, you can't afford it. The only exceptions I make to this are for housing (historically, every 10 year period in the US housing market has been profitable), and for education, where the financial benefit of having a degree has been proven over and over again.

This is a really nitty way to approach this.

I tried to type out some sort of rebuttal but just kept ending up repeating what alexos has written. Basically by borrowing when you have the money paying 2% and making 3% on your investment you're pushing a small edge. (Something that becomes necessary as you move up stakes in poker) You're calling all investments risky which is somewhat correct however there are tons of investments where the risk is so far fetched that is essentially non existent.

[kb coolman]

I tried to type out some sort of rebuttal but just kept ending up repeating what alexos has written. Basically by borrowing when you have the money paying 2% and making 3% on your investment you're pushing a small edge. (Something that becomes necessary as you move up stakes in poker) You're calling all investments risky which is somewhat correct however there are tons of investments where the risk is so far fetched that is essentially non existent.

I'm not talking about poker. Poker is about pushing small edges with a small portion of your bankroll over a ridiculously large sample size. Investments, retirement, 401(k), etc, are not a small portion of income. They should be a large portion of income, 15% of gross, in my case. I invest it aggresively, because I have time in the market to ride out the swings. I'm not being a nit, and I'm not playing around trying to leverage $20K in debt to my advantage. Debt is not an asset, unless it is owed TO YOU. Even then, it cannot be realized until paid or sold. It's definately not an asset when it's tied up in a rapidly depreciating asset like a car, and it's even less of an asset when you're paying intrest on that depreciation.

[mcatdog]

This is a really nitty way to approach this.

I tried to type out some sort of rebuttal but just kept ending up repeating what alexos has written. Basically by borrowing when you have the money paying 2% and making 3% on your investment you're pushing a small edge.

Highly leveraging yourself just to push a 1% edge seems completely retarded to me, analogous to sitting down with your whole roll at a poker table. Any investment that returns better than the interest you pay to a car dealer is going to be risky in nature. If you leverage yourself to make a risky investment and that investment loses money you can go super fucking busto real fast. I don't think his post was nitty at all.

[boost]

kb coolman, I really dont get what youre arguing.

There are investments you can make that are relatively zero risk. One of them being a savings account. For example hsbc is offering 3% on savings accounts right now. So if you can get an auto loan at 2%, you are earning money. I really cannot fathom how you intend to argue against this.

Its really quite simple, money makes more money. If your money is tied up in a depreciating asset you cannot make money from it.

And contrary to your claim that a house might be the one common asset to finance, it probably is the exact opposite. Because real estate generally appreciates, you can borrow against it at really favorable rates allowing you to "untie" your money and use it as leverage in other endeavors.

[mcatdog]

Is this really true that car loans are cheaper than savings account interest rates at the moment? I guess you guys are right then.

[kb coolman]

There are investments you can make that are relatively zero risk. One of them being a savings account. For example hsbc is offering 3% on savings accounts right now. So if you can get an auto loan at 2%, you are earning money. I really cannot fathom how you intend to argue against this.

True, but it's not a true investment, it's savings. Getting 3% interest on your money is less than inflation, so you actually lose long term. It's good to have 3-6 months liquidity in accounts like this for emergencies, but they are horrible long term wealth vehicles.

It's really quite simple, money makes more money. If your money is tied up in a depreciating asset you cannot make money from it.

It is laughable to say that money allocated to debt is not tied up. It is, and it's costing you interest.

And contrary to your claim that a house might be the one common asset to finance, it probably is the exact opposite. Because real estate generally appreciates, you can borrow against it at really favorable rates allowing you to "untie" your money and use it as leverage in other endeavors.

Ok, this makes no sense whatsoever. How can you borrow against your home and not have it financed? And how the hell is it untied when it's obligated against a note?

This thinking is not only faulty, it's dangerous. This is the exact same mentality that has caused the current housing crisis. Banks were all too eager to loan, people were all too eager to borrow, and it artifically appreciated home values. Often 5-10x historical rates. This allowed home owners to cash out re-fi, using thier home as an asset vehicle. Well, guess what? The same folks are screwed because the banks won't lend on over leveraged assets anymore. People are underwater because they borrowed more than the house was worth, again making assumptions on future income and values that were not guaranteed. Foreclosures are through the roof, people cannot refinance because they owe too much on the home. And the worst part is that mortgage backed securities are now worthless when they've historically been among the safest investments. But now they have securities that are over-leveraged against over-prices assets. Mortgage-Backed Securites are now close to junk bond status. They got so bad that the US Federal Reserve had to step in and back them from default.

[Alexos]

guys, the 2% loan vs 3% risk free investment was just an example

I'm trying to make a point that saying general stuff like "loans are bad, credit is bad" is incorrect. I'm not suggesting to borrow everything you can at 2% and put it in the stock market at theoretical 8-10% which is what it returns long-term. It doesn't have anything to do with poker either.

It's just pretty fucking simple. Some loans are good, some aren't. Some interests payments are tax-deductible, some aren't. If you have money, and have ideas of where to invest your money at +EV, and you have possibility to get a cheap loan instead of passing up on the +EV opportunity, then that loan is good. Obv don't risk all your net worth on it, but I was assuming that's a given since this is a poker forum after all.

[boost]

guys, the 2% loan vs 3% risk free investment was just an example

I'm trying to make a point that saying general stuff like "loans are bad, credit is bad" is incorrect. I'm not suggesting to borrow everything you can at 2% and put it in the stock market at theoretical 8-10% which is what it returns long-term. It doesn't have anything to do with poker either.

It's just pretty fucking simple. Some loans are good, some aren't. Some interests payments are tax-deductible, some aren't. If you have money, and have ideas of where to invest your money at +EV, and you have possibility to get a cheap loan instead of passing up on the +EV opportunity, then that loan is good. Obv don't risk all your net worth on it, but I was assuming that's a given since this is a poker forum after all.

ya, I mean I think people are just being dense for arguments sake. If you truly think any sort of credit is bad, youve clearly got an extra chromosome.

[kb coolman]

I'm not saying loans and credit are bad. They're abolutely necessary for most people. What I have a problem with is abuse/ignorance when it comes to credit. The only arguement I'm making is that it's horrible personal finance to borrow money for a purchase of any size that you could afford to pay cash for. Furthermore, I would argue that any product you would want that requires you to finance is actually not affordable. As per my previous post, I think it's sound to borrow for home ownership and education for obvious reasons.

On a final note, Caveat Emptor. I can tell by the posts on here that people who advocate credit over cash have not recieved their financial advice from the independently wealthy. It all sounds like a re-hash of "Financial Management" seminars run by finanicial institutions and investment firms. These people want you to borrow as much money as possible for whatever reason because it pads their bottom line. It's no different than the NAR saying now's the time to get back into the housing market or a car dealership telling you there's never been a better time to buy. It's a broken record.

[boost]

jesus...

just because someone is trying to sell you something does not mean it is bad for you to buy it. Do you really not understand this? Someone profiting off of you and you getting a good deal are not mutually exclusive. That is the flaw in your logic, and until you recognize that, it is you that is the broken record rehashing a tired and busted argument.

[flomo]

i'm on the boost side of this

[Ash256]

There are investments you can make that are relatively zero risk. One of them being a savings account. For example hsbc is offering 3% on savings accounts right now. So if you can get an auto loan at 2%, you are earning money. I really cannot fathom how you intend to argue against this.

boost, I assume I'm missing something because my automatic counterargument is that a car depreciates faster than money and long-term liquidity is undervalued...

[Silly String]

There are investments you can make that are relatively zero risk. One of them being a savings account. For example hsbc is offering 3% on savings accounts right now. So if you can get an auto loan at 2%, you are earning money. I really cannot fathom how you intend to argue against this.

By taking the low financing deal at the dealership you forgo the opportunity to save money elsewhere in the transaction. Usually you are giving up a rebate or some other form of savings from the sticker price to get a loan at 0-3%.
You also are not able to buy used cars with low promotional interest rates, thereby costing you more money in depreciation in the long run. But the last point is a financial decision, not an emotional one as most purchases are.

[jo]

Because real estate generally appreciates, you can borrow against it at really favorable rates allowing you to "untie" your money and use it as leverage in other endeavors.

I may be wrong here, because I've not been following the news all that closely, but didn't Western civilization recently collapse because of this theory?

[flomo]

a car depreciates faster than money

very true
now why would i want my money to be turned into a car

[kb coolman]

a car depreciates faster than money

very true
now why would i want my money to be turned into a car

Well that just makes perfect sense.

How is it not your money? I guess we can say that is isn't your money yet, since you had to borrow it, but it will definately be your money paying the installments. With interest. On a depreciating asset. Why is this such a difficult concept to grasp?

[Ash256]

Because real estate generally appreciates, you can borrow against it at really favorable rates allowing you to "untie" your money and use it as leverage in other endeavors.

I may be wrong here, because I've not been following the news all that closely, but didn't Western civilization recently collapse because of this theory?

LOL true

[flomo]

Because real estate generally appreciates, you can borrow against it at really favorable rates allowing you to "untie" your money and use it as leverage in other endeavors.

I may be wrong here, because I've not been following the news all that closely, but didn't Western civilization recently collapse because of this theory?

LOL true

agree
borrowing money on something that earns money is silly

[Squeaky_Midget1]

Unless you're buying a classic or antique i'm not sure why everyone wants to turn buying a car into an earning financial investment. For most of the country they are necessary assets. You don't buy a pair of jeans or a TV and wonder if you can get 100% return on them. Vehicles are just a bigger ticket item.

Unlike a house or a piece of property...every vehicle has a life expectancy, which in turn makes them depreciate over time and miles.

Leasing is better for the short term buyer since you won't have a large lump sum invested at any point. Plus, residuals are based on current market value and leave you with $0 in negative equity to roll over.

If you plan on keeping a car for 8-15 then your oppurtunity cost is lower in the long run with a buy.

It's simple microeconomics guys.

[boost]

There are investments you can make that are relatively zero risk. One of them being a savings account. For example hsbc is offering 3% on savings accounts right now. So if you can get an auto loan at 2%, you are earning money. I really cannot fathom how you intend to argue against this.

boost, I assume I'm missing something because my automatic counterargument is that a car depreciates faster than money and long-term liquidity is undervalued...

you are earning money vs buying straight up cash. Obviously you are losing money no matter what when buying a new car (we can ignore the exceptions because anyone who can afford them none of this applies to anyways.)

Or am I missing something else?

[boost]

Because real estate generally appreciates, you can borrow against it at really favorable rates allowing you to "untie" your money and use it as leverage in other endeavors.

I may be wrong here, because I've not been following the news all that closely, but didn't Western civilization recently collapse because of this theory?

LOL true

agree
borrowing money on something that earns money is silly

WAT!?

dear jesus, please save this country..

The reason that we are taking so long to get ourselves out of this mess is because people are not lending. It is perfectly sound to lend money with an appreciating asset as collateral. Its irresponsible lending based on the blind belief that any type of asset, including real estate, will always appreciate. Responsible lending/borrowing is the cornerstone of capitalism. The problem we have now arose because people are generally ignorant about all things financial and banks started to get greedy and not care about being responsible. Responsible lending/borrowing is quite necessary for an capitalist economy to work in the real world.

[boost]

a car depreciates faster than money

very true
now why would i want my money to be turned into a car

Well that just makes perfect sense.

How is it not your money? I guess we can say that is isn't your money yet, since you had to borrow it, but it will definately be your money paying the installments. With interest. On a depreciating asset. Why is this such a difficult concept to grasp?

$30,000 in a savings account at 3% will be $40,481.00 after 10 years.

If you get a $30,000 car financed over 10 years the total cost including interest will be $33124.80

Obviously these rates are currently not available, however I am confused as to how you can claim this is "bad."

[Lukie]

I paid cash (i.e. check) for my car and it was the best option and it wasn't even close.

Everyone's situation is different.

/shutupalready

[boost]

I paid cash (i.e. check) for my car and it was the best option and it wasn't even close.

Everyone's situation is different.

/shutupalready

^5

[Alexos]

jesusssssssssssssss!!!

what the fuck

[HarleyGuy13]

ISF first off do yourself a huge favor and forget about the Jag they are the softest cars on the road. Their value falls so fast it is insane to say the least. Call a Jag dealership and ask how much an oil change is and say the 30k mile service? You will be amazed what they charge for just an oil change!!! If you still want one I'll sell you a very nice one with minimal miles on it for thousnads below book value! Oh by the way you can't even touch a BASIC warranty for a Jag for less than 3K if you can find anybody willing to even offer you one....Wonder why that is? Cuz they SUCK and cost a fortune to do anything to. You would be so much better off getting a Honda, Acura or Lexus believe me.
As far as the cash goes it will make NO difference to the dealership at all other than create more paper work for them. If you bring in more than 10k they have to file paper work with the IRS and is sucks. It will make absolutely NO difference in what you will pay for your vehicle at all. They still paid what they paid for the vehicle and won't loose any more or less because you bring in green backs.
Best thing to do is ask around and find a dealership with a fair reputation. Go in and explain you want a new car and want to get a FAIR deal. Offer them a reasonable amount over invoice, which if you go to KBB.com you can look up invoice amounts that are very accurate. Also ask if there are incentives such as cash back to the dealer, and you can find this out at Edmonds.com. Don't expect them to not make any money but if they net $500 in todays economy they will be happy with that and you should be as well.

[ensign_lee]

ISF first off do yourself a huge favor and forget about the Jag they are the softest cars on the road. Their value falls so fast it is insane to say the least. Call a Jag dealership and ask how much an oil change is and say the 30k mile service? You will be amazed what they charge for just an oil change!!! If you still want one I'll sell you a very nice one with minimal miles on it for thousnads below book value! Oh by the way you can't even touch a BASIC warranty for a Jag for less than 3K if you can find anybody willing to even offer you one....Wonder why that is? Cuz they SUCK and cost a fortune to do anything to. You would be so much better off getting a Honda, Acura or Lexus believe me.
As far as the cash goes it will make NO difference to the dealership at all other than create more paper work for them. If you bring in more than 10k they have to file paper work with the IRS and is sucks. It will make absolutely NO difference in what you will pay for your vehicle at all. They still paid what they paid for the vehicle and won't loose any more or less because you bring in green backs.
Best thing to do is ask around and find a dealership with a fair reputation. Go in and explain you want a new car and want to get a FAIR deal. Offer them a reasonable amount over invoice, which if you go to KBB.com you can look up invoice amounts that are very accurate. Also ask if there are incentives such as cash back to the dealer, and you can find this out at Edmonds.com. Don't expect them to not make any money but if they net $500 in todays economy they will be happy with that and you should be as well.

DON'T PAY OVER INVOICE!!!! This is generally good advice, but that part I bolded is terrible.

[ProZachNation]

More like this playa

http://www.youtube.com/watch?v=RLpOjXOMFkg

[Lukie]

yeah, paying over invoice is retarded. you can buy at invoice, sometimes below.

invoice is *not* true dealer cost, for a variety of reasons.