Originally Posted By Lisann22 Once I sell my house and move to Georgia I plan to give my mom my truck and buy a new vehicle with some of my house profits. I've been reading the pros and cons of just paying cash or going ahead with a nice down payment and financing for a few years. I'm not seeing the point. I'd prefer to be debt free with no payments. Other say it helps with your credit. I have good credit and do not carry any credit cards other than an AmEx. Opinions?
Originally Posted By Sport Goofy I would look at interest rates and financing options. The car companies have been running a lot of low interest financing deals lately to move inventory. If you can get a financing deal at a lower rate than you are earning interest on your cash in some sort of bank/investment account, it's not a bad idea to finance. You will then continue to earn interest on your cash that could possibly exceed any financing costs on the loan.
Originally Posted By DyGDisney I'm no financial expert, and have suffered the consequences of bad decisions, but if you can swing it I'd finance the vehicle. This way you can have more to put down on your house. If not, you are financing that much more of your house for 30 years versus financing your car for 5 or 6 years. Also, I'd go for a used car to avoid the immediate depreciation. Unless of course you can get 0% financing on a new car, that would be hard to pass up.
Originally Posted By amazedncal2 I am a cash if you can person. It drives my husband nuts. I hate making any more monthly payments than are absolutely necessary. Lately I've been using either AM EX or VISA for everything possible, earn the points and then pay the statement in full by the due date. If you have an AM EX with an open line and the dealer accepts credit cards, you could really rack up some airline or hotel points buying the car with AM EX. We paid for our new fence with VISA and ate all our meals at DLR with the points
Originally Posted By LuLu I guess it would make sense if you could get less than 3% interest rate. I don't think there were any deals on Honda Civics (probably just on cars no one wants!). They only allowed me to put up to $3000 on a credit card, so I did that for the points (paid it off right away) and wrote a check for the rest. A used car is a great idea tho. "Cash if you can," I like that
Originally Posted By LuLu >>Other say it helps with your credit.<< I'd like to hear an expert opinion on that. My guess is it doesn't matter once you've already got good credit. If you're in the 700's, then even *if* it would push you higher, there's probably no advantage to it.
Originally Posted By Mrs ElderP I vote cash if you can too. For one thing that gives you wider insurance options. I suppose if you want to check out your credit report and see if your score needs the help you can do that, but i doubt you do.
Originally Posted By Lisann22 amazed - that was my plan with the AmEx card. LOL, I've already called to make sure I could do it. ;> I don't need the boost in credit - I'm in the 700's.
Originally Posted By DyGDisney it's no payment now on the car, but a bigger payment on your house for 30 years. I guess I just look at it differently.
Originally Posted By Lisann22 I hear what you are saing DyG but I'm putting significant down on my house and I'm not financing for 30 years. That's why I'm trying to weigh it out. I'm sure you can see which way I'm leaning.
Originally Posted By Lisann22 I've done it before. I want to be financially free to travel. So yes, LuLu it's quite the feeling.
Originally Posted By mater4 Since you have the cash I would rather not have the monthly payment. If you do finance it is good to get 0% - 3% intrest for at least 1-3 years and put enough cash down so you only have a 3 year loan.( cars depreciate so fast) You can get a car that is new or like new if you buy something that is a year old.
Originally Posted By tiggerdis_ See now Lisa - if you were a true "shopper", you'd have the answers! And I know I can say that safely without you adding me to your Mob Wars Hit List.....
Originally Posted By tiggerdis_ And I agree - if the interest rate charged for the financing is less than you'll earn saving the money, by all means finance. My dad has good credit and actually got 0% financing - even though he had the money, he took the financing. Check the fine print too, if you really hate the payments, check to see if you could pay it off early.
Originally Posted By Goofyernmost Cash is good but remember that no matter when or how you spend it, it is no longer there. I just purchased a car at 3.9 per cent. I have CD's that pay 4.5 per cent so why take out that money and lose money in the process. As for travel expense, that also comes from someplace. If you pay cash you have no payment so you have the money. If you finance you still have the cash, so you still have the money for travel. It's all relative. I haven't had a payment for quite a few years and I pay off my credit cards as the bill comes in and frankly my credit rating went down, not a long way, but down none the less. If you don't pay on something then they have no record of consistent, on time payments and therefore no real history that you can handle debt. Seem odd but it is something to consider. I totally discourage excessive credit usage but a little can be beneficial. If you look for deals they can be quite beneficial. For example, I just bought a room of furniture. I financed it with no payments and no interest if paid within 12 months. A no brainer...I can pay for it but why not earn interest on that money for another year. It's a matter of personal choice.
Originally Posted By LuLu I pay everything in full and haven't had a car payment in a dozen years, but my FICO is over 800. I don't buy into the "you gotta have debt to have a good score" idea. If you have, or have had, a mortgage, that may be all you need to get a good score.
Originally Posted By sun-n-fun They may drop the price some if they know you are paying in full upfront.
