[jacobsed]

Originally Posted by BEAR-AvHistory

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.

I said companies borrow money to buy assets because those assets make them money. I made no statement regarding why banks would or would 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.

Your emergency fund should be 3 - 6 months of expenses. So whatever that is for you is the right amount.

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.

The shortest path to building real wealth is to be debt free. Your most powerful wealth building tool is your income and the more of that you have available then the more wealth you will build. Pissing money away on new cars is like dropping an atom bomb on most people's personal finances. I agree that buying a new car is OK if you're already a millionaire. Most people think they can afford a car just because they can make a payment but they really can't and will never have any real wealth. Most everyone who drives around in a new luxury car is a poser because they are leasing or financing.

I purchased a used one owner, dealer serviced 2006 330xi with 100K miles on it for $15K cash out the door last January. I've driven it 25K miles and not a single issue. Other than the odometer reading you can't tell its a used car. What a sweet ride! Any repairs it might need in the future will be paid for out of pocket with cash and I'm sure those will be minimal. Look at all that money I saved buying used and my income isn't tied up making payments.