Quote:
Originally Posted by jacobsed
I would never by a new car because of the depreciation. 5 years used is the sweet spot.
Companies get loans on depreciating assets because those assets make them money. Your personal car will not.
Emergency funds need to be in cash for emergencies. Not for making you a return on investment.
You should only buy a car with cash and be debt free if you want to accumulate real wealth and have financial peace.
The borrower is slave to the lender no matter how fancy you think you are with financing. You're always on the losing end.
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Wrong banks do not lend money to company because the machine they want to buy will make money for the company. They lend money based on the companies overall financials that show they can pay the money back. The new machine might make money but if the rest of the company is loosing its butt the bank will not lend to them.
A BMW is a luxury item & IMHO anything over a 4 door Civic is not really necessary but is nice to have if you can afford it. So it needs to be viewed in that way not just as a pure depreciating asset. You are paying money to play that you will never get back so you best pick the most fun toy if you can.
Why do you assume they are in trouble and can’t afford one if they take out a car loan especially a zero interest one, that is just a silly statement since you don’t have a clue about the other people on this form. You like second hand cars I won't go near one.
You also assume that a $50K fund earning interest is an emergency fund. How about its just some money in the bank earning interest that I felt no need to put into a car & has nothing to do with emergencies.
Thing is I can walk into a BMW dealer pick out a $60K, car sign for it, drive away & no cash changes hand no interest is charged on the note. I am pretty sure that would not be the case if I was over extended or a credit risk. Out of 6 cars & one bike on my driveway one is zero percent, 335is, one 0.9%, X3xdrive35i & the last which will be paid off this summer is 1.9%, Expedition XL Limited. No money was put down on any of them & all the others are paid for.
When it comes to buying new BMW’s there is nothing unique or special about my situation. A lot of kids at my grandsons high school are driving more expensive cars then mine.
You might believe buying second hand cars for cash is the best plan but trying to ram it down other peoples throats who's situations you don’t know is not very smart.