>>11056610Yes I want to keep as much cash out of the car as possible as it’s gone once it’s in it. I don’t see a car as an asset but more as a bill like insurance. Youll never see most the money you put in a car again no matter how you cut it. I’ve done a lot of math and I figure for what I do it’s the best way to go. Figure three scenarios,
Scenario 1)
I buy a 2020 RAV4 at 0% for 48mo selling price is $28k with $6k down at 8.75% tax rate I’ll pay $500/mo and my car is worth ~$15k at end of 4 years
Scenario 2)
I buy a 2020 RAV4 at 4% apr for 84mo selling price is $27k because of rebate (0% is a rebate) with $0 down I pay $400 a month (totaling $4000 in interest over 7 years) but I invested my initial $6000 in an investment fund growing at 7% as well as putting $100 extra month in it for 7 years I’ll have made $6,000 through the fund. Therefore over 7 years I have a lower payment and the money the bank would have is instead making me money. plus my car is worth ~$10k at end of 7 years
Scenario 3)
I pay $6,000 cash for a 2008 RAV4 with 125k miles that I spend $1-3k a year to keep running and is an outdated POS which will likely not be running in 3 years and worth $500 and I’ll need to buy another $6k car again but I was investing $500 a month for 3 years at 7% which made me $2000. Overall let’s do the total investment cost over 7 years for the same scenarios.
1) I paid $30k for car it’s now worth $10k and I invested at $500/mo for the later 3 making me an extra $2k total cost of car for 7 years $18k
2) I paid $4k in interest for car, car is worth ~$10k, investments made me $6k and total cost for 7 years is $18k
3) I bought 3 cars for $6k each and sold 2 for $500 each and spent $2k per year on repairs and made $11k from investing $500/mo total cost for 7 years is $19k.
In the end they are all similar except scenario one and two you drive a new car and scenario three has so much variability it could be cheaper or more but it depends luck.
