Leased - Financed - Owned Outright

[flagger]

Just curious as to the number of cars leased, financed or owned outright. I get the impression from reading a lot of posts that a majority of the cars are leased.

I'll start with owned outright.

[Erhan]

Yeah we had couple more new members since the last poll.

[NYCMCBM3]

I put financed, but I can also be considered owned outright , since I put down about 53k and only owe 16k on it

[poopdeckpappy]

Cash is the only way to go. Monthly payment equals zero and that I can afford. Also I find writing a check for the whole amount clears the mind of wants and dreams and focus on needs and cans. Happy Easter.

[Erhan]

Originally Posted by E=mc2

I'm sorry I don't understand the logic of buying outright. You could buy this car in 36 months with 0.9% APR and put the money in a 3 year CD, you will be much better off. I think this "clearing mind" part is a bit nonsense to me (no offense).

I don't know any CD gives 0.9%. But yes, you're right, paying cash is not very smart since you can get higher return than 0.9% from various investments.

[piloto]

I'm going to guess, just guess, and I could be wrong here, but I'm going to go far out and guess that different folks have different strokes, and one or the other is the right choice given their circumstances, needs, wants, and obligations. And further to the point, neither I, nor anyone else will ever understand exactly why they chose their chosen route, but would have to accept that it was probably the right route, given that they chose it for themselves after all, especially when we consider that they are on this forum arguing on its merits. So said in a simpler way, lease, finance, select, cash, are all sensible and legit methods. It just depends on who you are.

[CarbonAlpine]

He meant the m3 could have been financed for 0.9%. and the current rates for cd's are significantly higher, hence the wiser choice to finance m3 and invest the cash.

I did the same

[IFX]

cash and be done with it.

[Erhan]

Originally Posted by E=mc2

http://www.selectcdrates.com/rates-by-bank-jpmorgan-chase-bank/

In fact 4 yr gives %3. So thats 2% of 70k, $1,400.

Anyways, I agree that to each his own.

Yes but how wise is it to tie your money for 4 years?

[Erhan]

Originally Posted by E=mc2

Jpmorgan chase is a lot less likely to default than you totalling the M3. If you mean putting money in the car gives you more flexibility, maybe you are right, but then if you have the need to access that 70k maybe its not meant for the car and should stay in the savings account

I can speak for myself, I would only pay off a car like M3 if I had at least a million bucks saved in the bank, house paid off and my kid is halfway done in her school.

Credit to me is a great asset when done right.

No you got me wrong. I'm saying the same thing as you do (ie, don't pay cash for the car and invest instead) but CD is not really the right way. The CD rates are very low. I'd look into stock market or index funds or something.

[osteome]

Originally Posted by erhanh

Yeah we had couple more new members since the last poll.

Next poll should be "Does M3 post have a search function?"

[JCtx]

Cash is the right way to buy a car, period, be it a Civic, M3, or a Ferrari. Check the interest you pay on your '0.9%' loan and you'd be scratching your head . Plus don't forget to add the fees you have to pay. Same thing with a house. The APR only holds true if you survive the loan; interest payments are heavily front-loaded. If you need credit to pay for the car, you CANNOT afford it. That almost every American buys a car that way doesn't make it right, but to each his own.

[FStop7]

Originally Posted by E=mc2

I'm sorry I don't understand the logic of buying outright. You could buy this car in 36 months with 0.9% APR and put the money in a 3 year CD, you will be much better off. I think this "clearing mind" part is a bit nonsense to me (no offense).

In the days of higher interest rates buying outright made since, but with 0.9% then it makes financial sense to finance and free up your own cash for other purposes.

[gblansten]

Will be leasing mine.

[cmk227]

People forget that if you invest in the cd the interest on it is consider ordinary income. So if you get 3% and you pay 35% taxes on the money than your thru return is a bit under 2% minus cost of financing and you are looking at 1% return on the money.

Although I manage money for a living , I just love that I paid cash. Most people can own a car because they have a good credit or can afford the payments. I like knowing that not to many can afford to pay cash for what they own.

Just my 2 cents.

[DaveHutchinson]

Cash for me, always has been. Bought my first Porsche new at 24 cash and have continued it all the way through.

[Prince_of_Persia]

Cash and I got a great deal because of it.

[crackberry]

Originally Posted by cmk227

People forget that if you invest in the cd the interest on it is consider ordinary income. So if you get 3% and you pay 35% taxes on the money than your thru return is a bit under 2% minus cost of financing and you are looking at 1% return on the money.

Although I manage money for a living , I just love that I paid cash. Most people can own a car because they have a good credit or can afford the payments. I like knowing that not to many can afford to pay cash for what they own.

Just my 2 cents.

hmm, i totally forgot about the issue of paying taxes, which complicate the situation.

my family likes to buy cars out right. i like living life with zero debt. houses are paid, college is paid, cars are paid, credit cards are paid, everything is paid.

it does make sense to lease with .9% rate but imho, if you only get a 1% return on your cash, which would be $700, i wouldnt sweat it. that is just small peanuts in the grand scheme of things.

[arter]

0.9% loan, $1500 bonus for taking the loan, and a three year balloon so the monthly payments would be low up til the end.

Used the $1500 bonus as the down payment so didn't have to put any money in until I had the car for a month and the first payment came due. Received the $500 back from CCA before my first payment. Also bought just above invoice.

BMW's version of quantitative easing.....

[persian54]

i can write off my lease :P

plus, i don't want to keep the car after 3 years... I want the new M3 (or a GTR?)

I would take too much of a depreciation hit if I bought it (be it cash or financed)

[poopdeckpappy]

Originally Posted by E=mc2

I'm sorry I don't understand the logic of buying outright. You could buy this car in 36 months with 0.9% APR and put the money in a 3 year CD, you will be much better off. I think this "clearing mind" part is a bit nonsense to me (no offense).

If you earned a living in big chunks / no chunks and did not have a steady earning stream or typical revenue stream this would make more sense. You are right about rates but cash deposit rates are at a all time low. The spread is very small. I sleep better knowing I owe nothing. No offense taken.

[tony093]

If you need credit to pay for the car, you CANNOT afford it. That almost every American buys a car that way doesn't make it right, but to each his own.[/QUOTE]

Total non-sense......sorry,