[I335]

My new 335 should be here in about a month and I'm trying to figure out the best way to finance it. Hoping someone can help. I have about $30K cash...

- I could put down the $30K on a standard auto loan and finance the rest through BMW Financial. I think the rate is 4.9% which is about the best I can find.

- I could put down a small amount of money and draw off the $30K to make the payments.

- I could lease and put down as little money as possible and again, draw off the $30K. Don't know what the current lease rates are...

Is there a place I can put the $30K where it will make some money while simultaneously drawing from it? Any other creative ideas?

Thanks!

[BMW F22]

I would put the $30k in a savings account (or maybe checkout ING). Last I heard it was about 5% or so (dont remember the exact number). The thing is that if you put little down you're in essence financing more than if you were to put $30k down. The beauty of it is that you can keep the money in the bank and have access to it whenever you need it. I would highly advise against putting so much money down on a car.

Another option is to invest the $30k and lease the car. But if you're going to buy it at the end, it may end up costing you more than if you were to purchase it in the beginning.

[I335]

Thanks Kenny - defintely something to think about. I think I will check out the ING route... Much appreciated! Any one else have any thoughts?

[335Hopeful]

I would second the ING approach and put the 30k in there and then just finance the entire amount (maybe put down $1k or so if they have a minimum). At the very least the interest earned in the ING account will offset the interest you would be paying on the loan...
Or you could lease, but never put money down on a lease...

[I335]

Thanks Hopeful! I think I'll look into that! My CA (also a friend) told me about a local credit union that was offering a 4.5% loan rate. These 2 might make a good combo! Thanks again!

[Bulldog 6]

Definately balance the APR V.S. the interest you would earn on it. If the APR is more than your interest are losing $$$. If you have at least 9 months of expenses in savings then pay cash for your car. I haven't looked but usually if you finance for 12-36 months you get an APR of about 1.9% - 2.9%. In this case put down enough to handle the shorter term, and use a high yeild checking account that earns 4-5% for the remainder of your $$$.

[John 070]

I guess some people here don't follow business too closely, there were a couple of rate cuts. ING is around 3.4%, hsbc maybe 3.55. Keep 30k in ING, and borrow at 4.9%, why? The name of the game would be to borrow as little as possible at 4.9%.

If it were me, I'd put as much down as possible and don't look back. The assumption is that money is play money, not money that you need for your day-to-day, kids, mortgage, what have you. What we call disposable income.

I put as much as I could do, considering it as play money, and I scrounged up around 24k. I am glad I did it because investments have not been the best over the last 15 mos. so my timing may have been 9 mos. sooner than optimum, but we can never buy at the lowest nor sell at the highest. Someone who cashed in back in 10/07 would have nailed it.

I dunno, my feeling is those who gamble with their lunch money on the way to school will end up hungry by 6th period. Where have all the "I lease because I invest the cash flow" guys gone? They must have lost their shirts over the last 12 mos.