Comments on: Never buy a new car … really.

By: sally k.

sally k. — Tue, 16 Jun 2009 13:48:04 +0000

My dad swears by this process: http://excarsalesman.typepad.com/

Other than that, I don’t think i’ll be going down that path for a long time. Sally

By: Cash Cascade your car? « How to Make 7 Million in 7 Years™

Cash Cascade your car? « How to Make 7 Million in 7 Years™ — Tue, 21 Apr 2009 09:00:02 +0000

[...] Rich, Saving, Starting Out, wealth I’m glad that some people still trawl around my older posts, as the principles of money don’t age (reference the Richest Man In Babylon, for example) [...]

By: Adrian

Adrian — Mon, 20 Apr 2009 07:38:59 +0000

@ John – That’s true (if your assumptions are correct); see this post:

http://7million7years.com/2008/12/09/the-cash-cascade-tm/

By: John

John — Mon, 20 Apr 2009 05:43:08 +0000

This is an interesting post. I know it has been over a year since you published this but I was wondering if you could comment on a few calculations I did after reading this post. My disagreement is mostly with the Finance Vs Cash option. The buying a used car part I totally get.

Let’s say I wanted to buy a car with an MSRP of 30,000. If I put 10% money down and get a loan of 27000 for 5 years at let’s say 5% APR. At the end of 5 years I will end up paying 33,571 for the car. If I had paid in cash I would have paid 30,000 for he car. The depreciation on the car would be the same in both cases. So I ended up paying 3,571 more for the car by choosing to finance it instead of paying cash.

But here’s the thing, by financing the car, I also ended up with 27,000 of cash which I can invest elsewhere. To recover the extra 3,571 that I’ll have to pay on interest for the loan, all I need to do is to put this 27,000 in an investment that can give me an APY of 2.52% only, which is not very difficult to find at all.

This suggests that buying with cash, even for a depreciating asset, does not make all that sense. Am I missing something here?

By: The Blog Of Technology » Choosing the right car for you, if it’s your first

Sat, 31 Jan 2009 10:41:39 +0000

[...] car hunting, and remember not to buy new… unless you make [...]

By: Making Money 101 - Debt Free & Saving Money « How to Make 7 Million in 7 Years™

Mon, 25 Feb 2008 15:25:03 +0000

[...] a sensible savings strategy. It’s also about learning the rules about what you should buy and when and how much you should spend and [...]

By: AJC

AJC — Fri, 15 Feb 2008 19:51:55 +0000

POST UPDATE: check out this related entry on the FreeMoneyFinance blog ; here is the Bankrate article that the post refers to. That's why the more expensive the car, the more likely I am to buy slightly-used ...

By: AJC

AJC — Sat, 02 Feb 2008 22:20:43 +0000

Thanks for your comment ACC … I’m blushing! Please let everybody know that we’re NOT related AJC

By: accident compensation claim

accident compensation claim — Sat, 02 Feb 2008 16:43:30 +0000

Its really fantastic..i must say that the post is really brilliant …