are you leasing or financing?

[LuckyRabbit]

I don’t believe in financing cars, cash and carry for me

72 months on a liability that majorly drops in value, plus the interest, noooope

 

[peterk9]

I don’t believe in financing cars, cash and carry for me

72 months on a liability that majorly drops in value, plus the interest, noooope

On a lease you don't have to worry about value dropping as you have a residual value tied into the contract. In fact, the dealer gave me a credit of just over $8,000 on the residual value. I could have the $86,000+ earning more interest than the 3.49% I'm paying on the lease.

Peter

 

[LuckyRabbit]

On a lease you don't have to worry about value dropping as you have a residual value tied into the contract. In fact, the dealer gave me a credit of just over $8,000 on the residual value. I could have the $86,000+ earning more interest than the 3.49% I'm paying on the lease.

Peter

To each their own, but I just can’t see new vehicles as a good choice, maybe because I sold them back in the day


It’s also nice to have nothing more than a phone bill, utilities and food for expenses, and if I hunt like I used and don’t go out to eat all the time I can even majorly slash the food budget

If I’m going to spend over 20k on a car it’s going to be built before 1970

 

[peterk9]

I financed my 2020 Explorer XLT. Went for a 60-month term with a reasonable down payment.

Welcome to the Forum.

Peter

 

[Madd_Dogg_Explorer]

The wife and I are financing her 2020 Explorer. We did 60 months at 0% (Crazy considering the rates now!) Sticker was $55K but dealer marked it down to about $47K. We traded in her 2016 Explorer (about $15K in equity) and put $0 cash down. Payments are just over $600. Bought in February 2020, about 2 weeks before the whole nation shut down for COVID.

 

[MNgopher]

We financed our 2021 on a 60 month loan at 2%. Just like every other vehicle we've bought - decent down payment, 5 year term to payoff, and typically pay off in full between year 3 and 4. On track to do so on this one too. The loan gives us some flexibility if we decide not to pay it off in full early for whatever reason, and fit our financial needs and goals.

 

[PTR]

I'd look into leasing, but I put too many miles on, typically, for the residuals to be worth it.

Common misconception though you didn't state how many miles you drive. All boils down to money. I assume then if you put on 'too many miles' that if you finance, your finance term is for close to your 'turn time' so that you don't have any negative equity when you do trade.

 

[PTR]

I don’t believe in financing cars, cash and carry for me

72 months on a liability that majorly drops in value, plus the interest, noooope

Lucky, get the calculator out. Let's just say for example that your paid $55,000 in cash. Because of your 'majorly drop in value' let's assume that your time frame for your next new one is 4 years. Let's assume the value of your vehicle in 4 years, therefore 'investment' is now worth $25,000. No, not a very good investment. However, if you would have financed this at a subvented rate (today Ford is offering 0.9% for 48 months in my area) you would pay $1,016.00 in interest over the 4 years. If you invested your $55,000 at these days a conservative 4.5% for 4 years you would earn about $10,800. Less your loan interest means you have about $9,800 more in your pocket by Financing. You can argue that rates might drop on your investment, yes, but they might also go up. But, your loan rate is Locked In. I'm not a math giant but the calculator tells no lies. No one likes to owe money but sometimes it makes sense to borrow.

 

[Toyfare]

Purchased a CPO Gold 2020 XLT in July 2022 for $36K. Ended up financing $32k for 66 months at 2.2% APR. Payments are $520/mo.