Why pay cash for new truck ?

[Marley]

Just a heads up to those fortunate enough to pay cash for your truck.

I'm retired now after spending my whole life being a workaholic so had the funds to spend on new truck......but I didn't do it.

Here's why, my close friend who is the sales manager already knew I was paying cash but told me he makes a little more money if I did a loan, he's honest.

I was laughing when he said how's 2.7% sound so I called a local financial advisor and asked what kinda return can I get on 60K and she replied 5.2 - 6.2 %.

I'm an old country fellow but that's some simple math.......same day, walked in and invested it.

 

[Yukon Bush Tremor]

So long as you are able to gain interest anything above the finance rate, it ALWAYS makes sense to finance and let your money earn for you.

 

[Loshad]

I'd slit my wrists if I only got 5.2-6.2%! jess sayin'...

Plus I read that even if you do pay cash it will help your credit if you finance it, make 4 payments, and then pay it off.

 

[Chris21667]

yea, it make no sense to pay cash UNLESS your a business!!!!! otherwise get the loan ..

 

[Apparition]

I'd slit my wrists if I only got 5.2-6.2%! jess sayin'...

Plus I read that even if you do pay cash it will help your credit if you finance it, make 4 payments, and then pay it off.

I made the first one on my last truck in order to save $1k. Then I paid it off in full.

 

[Jking]

I don't buy anything I can't afford except my house. That means I don't borrow money. Investme ts have a certain amount of risk in exchange for the return. Because if this risk, I only invest money that I can easily afford to lose. I understand the logic of opportunity cost but I prefer the peace of mind in knowing I have taken care of the family needs first and only risked something that they wouldn't notice. The risk aspect is something people don't seem to mention a lot. So the question is can you afford to lose all of this money with nothing in return? Obviously I am severely risk averse but it is another viewpoint.

 

[JRHII]

and

So long as you are able to gain interest anything above the finance rate, it ALWAYS makes sense to finance and let your money earn for you.

and don't forget the 5.2% tp 6.2% (if you can get it) is taxable unless an IRA investment ... but still taxable in the long run.

 

[Marley]

So the question is can you afford to lose all of this money with nothing in return? Obviously I am severely risk averse but it is another viewpoint.

Yes.
There is a risk factor but you play both ends.
Big returns - bigger risk
Smaller returns - smaller risk.

 

[Sixgun]

Help me understand. I have 80k in the bank and I have no idea what guarantee investment pays 6.7%. the loom in Government right now is not the best. Biden could and probably will destroy the stock market. Bye bye money.
In a perfect world after you pay taxes on capital gains( which Biden want to raise) How much could you possibly be ahead? What is your aggravation worth?
im putting 60% down and have a small payment.

 

[Jking]

Yes.
There is a risk factor but you play both ends.
Big returns - bigger risk
Smaller returns - smaller risk.

I'm actually saying that I do not play both ends. I prefer to play it safe and it has worked for me. I will write a check for my Tremor when it arrives and never worry about gains I could have made. I'm not saying you are wrong, but I make a conscious decision to operate my personal finances so that there is little risk. That's not to say don't have investments, just that I don't finance them. Its just a different approach but I think it answers your question that you posted.

 

[Akwagon]

I don't buy anything I can't afford except my house. That means I don't borrow money. Investme ts have a certain amount of risk in exchange for the return. Because if this risk, I only invest money that I can easily afford to lose. I understand the logic of opportunity cost but I prefer the peace of mind in knowing I have taken care of the family needs first and only risked something that they wouldn't notice. The risk aspect is something people don't seem to mention a lot. So the question is can you afford to lose all of this money with nothing in return? Obviously I am severely risk averse but it is another viewpoint.

Diversification is your best friend to mitigate risk

 

[async]

yea, it make no sense to pay cash UNLESS your a business!!!!! otherwise get the loan ..

You can still use section 179 deduction even if you get a loan.

edit: Im not a CPA. Don't take tax advice from a forum and especially not from me.

 

[PapaRaptor]

I don't buy anything I can't afford except my house. That means I don't borrow money. Investme ts have a certain amount of risk in exchange for the return. Because if this risk, I only invest money that I can easily afford to lose. I understand the logic of opportunity cost but I prefer the peace of mind in knowing I have taken care of the family needs first and only risked something that they wouldn't notice. The risk aspect is something people don't seem to mention a lot. So the question is can you afford to lose all of this money with nothing in return? Obviously I am severely risk averse but it is another viewpoint.

I agree 100%

I am doing just fine with this plan. If I can't pay for it I don't buy cause I probably don't need it. ??????

 

[Yukon Bush Tremor]

I did forget to mention.

Sometimes during a low interest sales promotions manufacturers offer " Cash Alternatives"

Meaning if someone is to pass up say 0% financing, they qualify for an additional rebate only available to cash buyers.

At that time you can do some math and decide which deal is most in your favour.

Sometimes total cost of ownership is higher one way, sometimes, the other.

 

[Loshad]

My '16 F150 was ZERO INTEREST! Wuz I supposed to pass that deal up? If I get 2.7% financing I'll be doing my happy dance out the door. My nearly zero risk high grade corporate short-term bonds paid 5.8% this year. Over 5 years if I finance 30K I'll come out a good 5K ahead on that deal although it will actually be more because all that 30K won't be in those bonds.

 

[ICT Tremor]

I’m not a Mensa member or Warren Buffett or anything, but I have a finance degree, use a financial calculator on a daily basis, and I work in a segment of the finance industry. I’m buying my truck cash because of the financial security aspect, coupled with the simplicity aspect.

You guys that are financing the truck, and then investing the same sum... what are your grand plans for the $75/mo cost/yield differential? Lake house? Yacht? Cessna Citation?

 

[Jking]

I’m not a Mensa member or Warren Buffett or anything, but I have a finance degree, use a financial calculator on a daily basis, and I work in a segment of the finance industry. I’m buying my truck cash because of the financial security aspect, coupled with the simplicity aspect.

You guys that are financing the truck, and then investing the same sum... what are your grand plans for the $75/mo cost/yield differential? Lake house? Yacht? Cessna Citation?

I am on your side (I have an MBA for whatever that is worth). Would be interesting to see the background of people with different views on this idea. I'm not trying to judge anybody for their decisions but I am curious about who may be more intimate the risk of investing. I suspect that not very many people actually invest the amount that the truck cost. Rather, I imagine they spend it somewhere else instead.

 

[Loshad]

LOL
A financial sausage fest! It's all good when done in good cheer! I'll rest on my track/portfolio record. I'll just say that as a silver commodities trader I went toe-to-toe with the Hunt Bros during their infamous attempt to corner the silver market in 1980 and didn't jump off a building. And if my wife wasn't Scottish I'd be buying an Earthroamer instead of a Tremor.

 

[Chris21667]

I’m not a Mensa member or Warren Buffett or anything, but I have a finance degree, use a financial calculator on a daily basis, and I work in a segment of the finance industry. I’m buying my truck cash because of the financial security aspect, coupled with the simplicity aspect.

You guys that are financing the truck, and then investing the same sum... what are your grand plans for the $75/mo cost/yield differential? Lake house? Yacht? Cessna Citation?

Well for me I am investing for retirement and to build my house .... I am 26 to be far... So I have a few more years to go ... But if your 60 then yea buy it is cash your probably already have a retirement egg

 

[Briski]

I paid cash. Debt is only acceptable if you are going to make money on it. Let’s face it, even Tremors will depreciate.

Finally, I hate truck payments almost as much as alimony. You give and never receive.