Quote:
Originally Posted by jmg
You can get financing for 0.9% nowadays. That's basically free money. I'd rather put $40k in an ETF like VOO with an average annual return of 15%.
So let's say I finance $40k at 0.9%. I'd pay $360 in interest the first year, but get a $6k return on investment on the ETF.
If I paid cash, it save that $360 but lose $6k in potential earnings. It's a huge net loss.
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Most that are paying for cars in cash are simultaneously putting $40K in an ETF. It always sounds nice when you're sitting there with the finance manager, but reality is different. If you "only" have $40K in cash, are you really going to put all of that into an investment AND take out a loan on a $40K car?