Buying a car in cash is stupid?

May 13, 2019 63 Comments

I just bought a car in cash. My friend says it is always stupid to buy things in cash. Is that true?

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TOP 63 Comments
  • Facebook FfEV64
    You could have bought the car using a credit card and paid off, within the billing cycle. You would have received points for the transaction.

    Another option was a loan, if <= 2%. You could have negotiated the price of the car, since dealerships get a kickback from the bank. You could have invested the cash in a CD and made money on the Delta % ( rates are around 2.5%).

    You also have stocks etc, which are higher risk. So many options. You left money on the table.
    May 13, 2019 3
    • Facebook FfEV64
      Done it thrice till date with no change to the purchase price. You may not be able to swing the entire amount, but you can do a partial. Combine with a credit card with a sign up bonus to compound earnings.
      May 13, 2019
    • PagerDuty ( 💃 )
      Amex and others have programs with websites dedicated to helping you find dealers that’ll let you put at least some amount of the car purchase on your credit or charge card.
      May 13, 2019
  • Facebook public2
    Depends, were you offered a no interest loan or ridiculously low interest rate? If so then maybe, else no. If the loan rate was high you could have still taken it for the rewards and paid it off inmediately for the credit bump.
    May 13, 2019 2
    • Microsoft EMoC46
      What rewards?
      May 13, 2019
    • Facebook public2
      Cash back, higher end packages, services etc.
      May 13, 2019
  • New EKPg16
    Depends. You can get 2.3% yield savings accounts fairly easily - if your APR is below that, then taking the loan is pretty close to free money.
    May 13, 2019 1
    • Uber / Eng ohfd
      Epic sarcasm
      May 13, 2019
  • Microsoft leetworld
    You're friend is an idiot.
    May 13, 2019 0
  • Google bo o
    your friend is stupid.
    May 13, 2019 0
  • Microsoft FFSake
    Same as buying a house. Peace of mind that you don’t have to open cash register every month
    May 13, 2019 3
    • Microsoft FFSake
      The investment part is not that obvious to me though. Along with higher payments you also have to maintain it. For new houses it’s supposedly easy, but oh my how many things are covered in old houses.

      So before saying it’s investment, person has to go through all hassles of such investment.
      May 13, 2019
    • Uber / Eng mH7bSe
      Yeah it's not for lazy people like stock is.
      May 13, 2019
  • Google GCPCE
    I’m a rewards points hound, so I would’ve paid for it on card, then immediately paid off the card with cash, but the final result isn’t too different than what you did.

    Technically from a pure finance perspective if your best alternative investment returned a risk discounted rate greater than what you could have financed it for you should have done that, but the peace of mind of minimizing debts is typically worth it.
    May 13, 2019 0
  • Facebook undrpa1d
    Don't burn yourself over a couple of percentage here and there. You work in the best industry possible. Just find what makes you happy. Is 2% worth the stress of having to cut a check every month? To me it's not. I prefer to buy things in cash just because I can and don't have to deal with a stupid lender or play by their deadlines and rules. Not everything in life is about money unless you're working a minimum wage job.

    Chill out and do whatever
    May 13, 2019 0
  • Rally Health FuPayMe$$$
    It’s not stupid. You avoid paying any interest in buying a depreciating asset outright by cash. Make sure you have smartly invested the rest of your money. Avoid debt as much as you can and be invested as much as you can.
    May 13, 2019 0
  • Google WarrenBuff
    Yes, it's stupid.

    If you make the right investments, your money can grow 8-11% per year.
    Car loans are cheaper. Many offer 0%. At Max 2-3%.
    So makes sense to take a loan.
    May 13, 2019 21
    • Microsoft FFSake
      Ok, I guess we came to no deal.

      If only you could read and comprehend what’s written. Calling people you know nothing about stupid or morons is not something you should be proud of.

      I wish you to grow your gains and never lose, and never have any doubt in ability of your brain to predict future. In fact I am probably speaking g to a billionaire, so I rest my case as defeated in this heated argument. Take care my friend
      May 14, 2019
    • Google WarrenBuff
      Bye Microsoft. Go pay in cash.
      May 14, 2019

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