Quote:
Originally Posted by JTruckenbrod
Johnny made a horrible financial decision with only 100k income and buying a 61k car in cash. It's called financing. Unless you make more money than you can figure out what to do with, buying a car of that value of % is just stupid.
What scares me more is someone is making 100k a year and is asking this question.
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Financing a car is only a valid option when the financing rate is lower than the return the person is making on that money otherwise. Blindly saying that you should finance is absurd. Credit/Financing is the significant factor in the massive debt this the average American is in and being "able" to do it doesn't mean one should.
On that investment note, it seems that every time I bring up this point in conversation, the guys financing their cars agree 100% with me as though that's exactly why they financed, but when probed to find out what they are investing in, the answer is "nothing" or "I don't know" which is just another way of saying, "I don't have any money to invest and I couldn't afford this car if I had to pay for it in cash."
As a general rule of thumb, don't purchase a vehicle you cannot pay for, right there on the spot, in cash.
Anyone's number one savings priority should be to have 6 months to a year with of monthly expenses saved up (this includes housing, utilities, food, gas, insurance, etc ... EVERYTHING) before they drop anything serious on a car.