Quote:
Originally Posted by Isaac Zachary
But in the end, if I bought a car right now, like the Tesla, it would be financed. I did throw the Tesla out there as an option, but my plan right now is to just keep using the Avalon and saving what money I would be paying for it if monthly payments continued. Maybe, if I keep it long enough, I'll have enough saved up to buy a new car outright.
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That is what my wife and I did. We had a loan on the 2003 Jetta Wagon TDI. Paid it off in 5 years and drove it for 10. We used the money saved to buy its replacement with cash. We didn't have a car loan for about 15 years but the Bolt and Acura have a loan due to stupid low interest rates. They are both financed for 5 years at 2.25%. I can't see how it makes any sense to cash out investments to buy a car when even a CD has a higher return than the loan.
However, that is with my circumstances with money in hand to pay off the loan if I needed to. I wouldn't carry a loan on a car if I didn't have enough reserves to either keep making the payments or pay off the car if I was to lose my job.