Rule of thumb, never ever buy a brand new vehicle in cash unless you can buy 10 of that in cash. Always use the banks money with the lowest possible interest rate.
@@yaboibakalli some friends and people i know laugh at me financing my cars but then don't know the psychology behind eh. I laugh at them in my mind lol
This has me confused though. If I have $60k and invest $50k, I'll need to take a bank loan in order to buy the car as I'll be stuck at $10k liquid cash. I can't withdraw % my investment every month to cover the car bills as the whole point of the investment is compound interest over time. So I'll be paying back the loan (+ interest) with my monthly income which means my monthly savings either won't grow, or won't grow significantly. So the only savings I can rely on are the ones I've invested [which are locked away]. But that means I must be sure the investment will yield positive returns - and greater than the interest rate on the loan. Isn't that a gamble? If the investment turns out bad I will have lost savings on top of paying a larger sum for the car due to the interest rate on the loan. If investments are so secure, why not pull a bank loan and invest the money outright? That way you can repay the loan+interest and still make a clean profit?
finance if you have a high paying job, lease if you have a business for write off, and cash if your a baller or have too much god damn money to deal with
Or you just dont like the risk of debt. Id rather save the rate that Id pay on the car for a couple of years and then pay in cash than taking a loan. Ik that its technically not the best choice since the money is just sitting in the bank and not actualyl working for me but id rather not go into 15k+ debt unless im buying a house.
@@roarbahamut9866 Well the average Software Engineer salary can range anywhere between 120-190k and if you aren’t a complete idiot and actually graduate University in your early 20’s then it won’t be a problem. But living like a cheap mole all your life won’t get you where you need to be. Match the max in 401k and Roth and put aside 10-15% yearly income into a high yielding rate of return ETF and your just chillin. Plus pick up a house or two and start building passive. Money is not a problem that a lot of people make it out to be. It’s just the matter of actually doing something productive then lying to yourself all the time.
@@nano-maly4164 Yeah you clearly are forgetting one thing. We dont live in the same country. The average pay, living costs etc. are so far apart that it doesnt even make sense to compare. My point still stands.
Great vid bro! This car is my favourite especially with the wrap. My first question is did you finance this car? And can you wrap a car even if you are financing it? Thanks
so are you saying finance the car and get the check I guess from the bank and put some money down on the car and the rest towards stock and use the returns from the stock to pay the car note?
what if you have like 500k in stocks - anf you make 10% a year and that profit could pay for the car, would you still not buy and and not worry over any payments other than insurance?
I would personally disagree with paying cash is bad, it really depends on what the interest rates are in your area, the position of the market, and how risk-adverse you are. Firstly, cars are depreciating liabilities that goes down in value, so to borrow money to lose more money is bad. Secondly, the SP500 returns about 8% on average, but there is a lot of risk in that in the short term, especially on April 14th 2021, because its at an all time high. A car loan, where I am from, is 5 - 7% interest currently even with a 815 credit score. A line of credit is about 3.5%. Except when borrowing money, the money is guaranteed to be lost, whereas in investments, you have to hope it goes up. I would always recommend people buying a car that they can afford (10% of net worth, or 30% of gross yearly income) with cash, unless they're getting an insanely low rate and/or if the markets at a low point.
Well u bring up some good points, the main thing u did not mention is risk. I value risk a lot in my personal finance. and so i always pay cash for almost anything. last time i had any sort of debt was a $200k mortgage on a property worth $1 million, u get the idea i dont screw around with debt. mostly because i am a investment banker, and i see how shit banks treats people and how fucked up car loan contracts and leases are. i know this because i used to work for a normal bank. a bank that issued a lot of car loans. and in the car loan contracts, if the bank were to experience solvency issues and go through a chapter 7 bankruptcy ur car will be taken away from you and ur equity would be put to 0. from what i have heard this is what also would happen to a lot of leases. where u would still have to pay the monthly lease payments. so the risk here is considerably high in ur example. ur math is correct and i agree with u on the math, ur concept is great. because regardless of the situation if we were to go through a great depresion ur investments will hit close to 0 and u would probably not be able to meet the car payments. the payment method u use might experience solvency issues aswell. so who knows u would have to sell the car regardless of the situation, because A) u would probably not have a job and ur investments would be worth zero anyways, the car would be worth 0 anyways and the company will probably see solvency issues. so regardless fuck the car, if shit hits the fan. (friendly reminder im not from the US and i speak 4 languages at work so if my english is a mix of french, german, norwegian and english her fuck it then. I have done the numbers for me and paying cash was the best idea. i own two cars, one mercedes station wagon (c-43) and a lexus rc350h. i daily the lexus to work, and drive the mercedes to the cabin in the winter and have fun on weekends. i dont live in the US and im not from the US so car payments here are around 10% interest rate. so out here it will be rather hard to finance a car based on a investment if we face a bearish year like 2018 forexample, or even covid. so to me it was always a great idea to just buy in cash. since i annualize 19% with 25% corporate bonds, 25% index funds and 50% of my own investments and company stocks (i get 33% off on my company stocks so even though the bank i work for have not done so great in the recent years i still make a profit from dividends and the discount. plus i help the company out a lot. so why not save 25% of my income in company stocks! I guess for me having a lot of security is good since im scared of another great depression or recession. I have lost my job before, and that time was the most painful of my life. so i guess having more predictability in my life is important to me. But making a informed decission that suits u is always gonna be the best option. blindly signing onto a lease or car payment is never a good idea. so to just make sure u make the most sound decision is the best! Have a great day!
my 2 cents, only finance a car you feel you’re going to own for a long time, purchase extended warranty and try to make extra payments. $1 or $1000 extra payment a month/day/week/year makes a big difference in interest trust me
I prefer leasing higher end cars. Cars depreciate and I don't have to worry about maintenance down the road as I'll lease a new car when the old lease ends. Everybody has their reasons, that's just mine.
Another important point that I think you missed out on stating is that when doing a lease you have a limit on how many miles you can put in the car to avoid extra charges (usually 10-14k Miles per year)
What did you do custom? Just wrap it and paint the emblems? Anything else? Beautiful car I’m contemplating getting this car. Not sure if it’s the best financial decision for me though.
Honestly, I think leasing is the best option for you. It seems like you don’t keep your vehicles more than six months So leasing your next car is probably your best bet.
You are assuming that the ppl good credit scores and will pay less for a loan. Now a little over a year later, the interest rates are sky high and cars are still in a shortage. You logic of never using cash isn’t exactly ideal.
Thanks for these information. Didn’t thought that finance a car is better than paying cash. Ey just a question : does people turn around their heads when you are driving the Benz?
Well in America you don't rly know this, but in Europe there are so called European funds. You can ask for these funds with your company and can use it for investments example: car, equipment etc. In this situation you buy the car cash because it's not your money. You have to write a list on what you want to buy and actually buy it after you get the cash.
I financed a used 2020 A35 (yes I know engine is not hand built) but I got it for $46,000 fully optioned. MSRP with options was 57,000 new. So not bad at all. Got a 1.99% interest rate for 72 months my payment is less than $600
is it adjustable rate? because i remember in the good old days when the bank i worked for handed this shit out like it was candy. they were shit adjustable rate that kicked in after one year, about 10% after the first year, then 15% then 20% and 20% for the rest of the term. i dont know if this is legal anymore. Because that is really shitty practice. This was the biggest regret of my life, i used "i need to eat too" as stupid moral justification for working for the bank. i later learned there are no excuses! just be careful and read the full agreement, if u have not! they often try to hide it as good as they could!
@@Abe317 that is a good loan. i personally hate credit so i would not get a car loan. but u got a good deal, if that is the case. However i dont know what the lender was smoking...
@@mhmhmmhmhm5162 it was my first Mercedes Benz and apparently they said they do this incentive for first time buyers with excellent credit. They want to keep me as a customer forever. Which I certainly will be
two things to add: 1. if you own a business, financing a car or even paying car in cash maybe a better option over leasing as you can write off a higher amount from the taxes. 2. you can still have the title for the car even if you have a loan.
Thanks man. I'm like a new generation and I didn't understand any types of these things but thanks to you, man. May I ask how much you had to pay in a month during those 5 years?
You want to finance cars because it doesn't tie up your liquid cash and make extra-large payments to decrease the overall interest over time. Leasing = renting, financially it makes no sense since its money down the drain without ownership.
I had a cla45 I bought cash for $40k drove it for 4 years and sold it for $35k. That is way less than leasing or financing. I am not rich but I rather buy. But again you have a good point put the money in a dividend stock and it will pay for the monthly financing fees.
