pb4uski
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I expect we'll pick up our new car sometime this week. I had intended to pay cash (about $30k) but the manufacturer is offering 1.9% financing for 60 months.
For most purposes, I assume our portfolio will generate 5.5% or better. So if it did and I took the financing then over the 5 years I would be about $2,700 ahead ignoring taxes ($15k average balance over 5 years * 3.6% difference), or $540 a year.
However, we haven't had a car payment in over 20 years other than a loan we paid off after just a couple months just to get the $500 up-front bonus offered by the financing company. Also, there would be a lien on the title that would have to be cleared, I assume that we would have to continually prove that we have car insurance on the car, etc. so just a bunch of minor hassles associated with financing.
I'm leaning to just pay cash but think I might be hypocritical given some of the other hoops we jump through to save less than $540 a year for other things.
What would you do? If it makes a difference, the $30k is relatively minor in relation to our NW, etc so if investment performance was less than 1.9% it would not be a big deal.
For most purposes, I assume our portfolio will generate 5.5% or better. So if it did and I took the financing then over the 5 years I would be about $2,700 ahead ignoring taxes ($15k average balance over 5 years * 3.6% difference), or $540 a year.
However, we haven't had a car payment in over 20 years other than a loan we paid off after just a couple months just to get the $500 up-front bonus offered by the financing company. Also, there would be a lien on the title that would have to be cleared, I assume that we would have to continually prove that we have car insurance on the car, etc. so just a bunch of minor hassles associated with financing.
I'm leaning to just pay cash but think I might be hypocritical given some of the other hoops we jump through to save less than $540 a year for other things.
What would you do? If it makes a difference, the $30k is relatively minor in relation to our NW, etc so if investment performance was less than 1.9% it would not be a big deal.