Anyone buy car and pay FULL CASH? Why? Clever or Stupid?

[Boyboy]

I think that is a very shallow statement to make. Driving conservatively and efficiently is saving the earth's resources! Of course if you are talking about 50km/h on the highway, then you win.

 

go on the highway and see for yourself. maybe not 50. but 70 on lane 2 and 80 on lane 1 is fairly common. of course, that's classified under road hogging.

 

did u also know that accelerating like a turtle is NOT the best way to save petrol? not least when one does it at the front of the pack at the traffic lights, making it such that more people fail to clear the lights. did u not know that contributes to congestion

 

i win after all

 

btw, i drive fast, but fairly efficiently. my FC quite lousy for 1.1, but still better than the avg 1.6 liter car. not to mention i usually reach my destination much faster than the avg driver who's just dawdling along. dawdling is fine, though, just don't hold up traffic

[Boyboy]

I think that is a very shallow statement to make. Driving conservatively and efficiently is saving the earth's resources! Of course if you are talking about 50km/h on the highway, then you win.

 

let me add, bicycling > all, if u wanna talk green. otherwise, it's not worth discussing.

 

public transport is a joke, if u are talking abt "green". catch one of those late nite buses to see what i mean. then look around you (while in the bus). petrol hybrids are also a joke (in terms of eco-friendliness), but may mean reasonable savings with green tax rebates

 

the best tech i can think of is a well-tuned (read, non smoky) turbodiesel engine. but still consume fossil fuels. if biodiesel, not so bad, but compete with food crops.

 

green is NOT having kids . let the human population decrease by half. but is that viable? i leave u to think abt it. btw, my spouse and i have decided not to have kids, but we respect the views of those who are pro-kids.

 

sorry for the digression from the original topic of whether to pay in full or installments.

[Kotila]

Your maths is a failure, still dare to teach people to invest.

 

If you take loan, you need to pay monthly installment. assume you have 100k cash but you need to pay $1,067 monthly installment so you are only left with $98,933 cash after 1 month, $97,896 after 2 months etc. so your investment amount is decreasing and you can never get $60k in investment return, should be around $30k in return only. So using your assumption of 2.8% interest and 6% return in investment, you only earn $2k after 10 years. You don't even understand the fact that 2.8% interest car loan has an effectively interest rate of almost double. To give you an example from DBS website itself. If your interest rate is 3.25% then effective interest rate for 1 year loan is 7.043%. if its 10 years then it will be closer to 6%.

 

http://www.dbs.com.sg/sg/personal/loans/ca...es/default.aspx

 

See how difficult it is, you need to get at least 5.4% returns a year just to break even with an interest rate of 2.8% car loan.

If you pay by cash, you are not paying any installment and will be having extra cash to be invested.

[Vextan]

as i understand, pay full cash for a car will incur how much additional cost on top of the car price huh ?

[Sabretan]

usually if u don't take in house loan, top up another 1.5 to 3k... but usually can negotiate...

[Throttle2]

as i understand, pay full cash for a car will incur how much additional cost on top of the car price huh ?

 

 

Pay full cash doesnt mean literally pay full cash for car on the first day.

 

Especially for buying new cars, many people take the shortest loan so that they can still qualify for rebate. but when the loan is due a year later, car is fully paid. thats technically not full cash but in essence it is.

 

for buying second hand cars from owners, full cash is much more common.

cleaner, simpler and quicker to transact.

 

 

 

 

 

 

[7007]

Your maths is a failure, still dare to teach people to invest.

 

If you take loan, you need to pay monthly installment. assume you have 100k cash but you need to pay $1,067 monthly installment so you are only left with $98,933 cash after 1 month, $97,896 after 2 months etc. so your investment amount is decreasing and you can never get $60k in investment return, should be around $30k in return only. So using your assumption of 2.8% interest and 6% return in investment, you only earn $2k after 10 years. You don't even understand the fact that 2.8% interest car loan has an effectively interest rate of almost double. To give you an example from DBS website itself. If your interest rate is 3.25% then effective interest rate for 1 year loan is 7.043%. if its 10 years then it will be closer to 6%.

 

http://www.dbs.com.sg/sg/personal/loans/ca...es/default.aspx

 

See how difficult it is, you need to get at least 5.4% returns a year just to break even with an interest rate of 2.8% car loan.

 

 

Now we can see who is a better investor.....

 

As for property, how many people can really pay cash??? So generally people need to take loan in order to enjoy better life style...

But for car loan, take a good look at the formulas they are calculating for actual interest..... they are just legal ah-long....

 

[7007]

as i understand, pay full cash for a car will incur how much additional cost on top of the car price huh ?

 

That depend on your negotiation power......

I didn't pay anything extra as compared to a guy who take a loan....

[7007]

I'm also paying full cash for my next car.

hope to get it by end July....backside sibei itchy liao..help...

 

Hi Bro,

 

You sold your 525 oredi???

Yours is a black one??

Your previous is black S40???

[Yongjulim]

if i have the cash, i will. having car is an ongoing expense, the amortization would be a big minus from the mo expense i have to pay. always cash, if i have it

[Detion]

Paying cash in full if you do not know how to invest.. If you are into financial management, you will know tat by taking loan, you will be able to maximise your money to invest.. Especially in such days where inflation is high, you can save some money from the loan as well and use the money 4 other investment

[Sdf5725]

why ppl keep saying getting loan is smart as can go investment and maximize the $$ return.

simple, if ppl just have enough $$ to pay in full and feel the pain of having all the saving gone, by all mean go for loan. if not enough cash on hand, then go for loan. only really rich ppl will pay car in full without saying much, blah blah blah.

and ppl going for investment stuff doesnt mean he/she is smart. fyi, a lot of ppl getting rich not by investing here, investing there. and when they invest, the money can be multiplied or gone, they dont feel the pinch. for them, investment like a game, get extra, treat ppl a good holiday, meal, etc. they are not depend on investment to cover this expense, that expense, blah blah blah.

[Throttle2]

Hi Bro,

 

You sold your 525 oredi???

Yours is a black one??

Your previous is black S40???

 

 

not yet, but anytime can go.

waiting for my 6er first.

it's silver

 

yes previous was brand new moonroof black S40, lose big big.

for people like me , no point buying brand new.

attention span only 2 yrs....hahah

[Gerd]

Your maths is a failure, still dare to teach people to invest.

 

If you take loan, you need to pay monthly installment. assume you have 100k cash but you need to pay $1,067 monthly installment so you are only left with $98,933 cash after 1 month, $97,896 after 2 months etc. so your investment amount is decreasing and you can never get $60k in investment return, should be around $30k in return only. So using your assumption of 2.8% interest and 6% return in investment, you only earn $2k after 10 years. You don't even understand the fact that 2.8% interest car loan has an effectively interest rate of almost double. To give you an example from DBS website itself. If your interest rate is 3.25% then effective interest rate for 1 year loan is 7.043%. if its 10 years then it will be closer to 6%.

 

http://www.dbs.com.sg/sg/personal/loans/ca...es/default.aspx

 

See how difficult it is, you need to get at least 5.4% returns a year just to break even with an interest rate of 2.8% car loan.

 

 

Another thing to note is that these NCPS are currently being traded above par which means that the yield would be less than the 6% that is assumed. Unless you can buy them at or below par (which is impossible given current level of interest rates) it is not possible to break even on the car loan using this type of investment. Only way to breakeven on the loan is to incur higher risks. If NCPS can outperform car loan yield, the bank/finance company would just buy NCPS rather than loan you the money for your depreciating car. Because of the high effective rates, the banks want your business because they can earn your money. You take a 10yr loan, the car will depreciate faster than you can pay off so you will quickly get into negative equity and hence cannot afford to sell the car and will have no choice but continue to pay the bank every month. Therefore you should always loan as little as possible for a fast depreciating asset.

[Freestylers09]

if know how invest, dont pay full, if got extra $ and dont know how invest,pay full..

 

some people use fraction of the car price to allow it to depreciate, and own few cars in few short period of time..

 

like ferrari for 2 years,lambo for few years etc...usually dont own for long time...thats why market alot such cars selling..some are not really cant afford to..just that use a mininium sum to own such supercars for sometimes..later on change again..

 

 

[Kiario04]

if know how invest, dont pay full, if got extra $ and dont know how invest,pay full..

 

some people use fraction of the car price to allow it to depreciate, and own few cars in few short period of time..

 

like ferrari for 2 years,lambo for few years etc...usually dont own for long time...thats why market alot such cars selling..some are not really cant afford to..just that use a mininium sum to own such supercars for sometimes..later on change again..

 

bro, if u buy those cars 2nd hands fine, they depreciate lesser than brand new ones, but if u buy brand new ones n keep changing every few years then u r donating ur $$$ to the car dealers ... no wonder they love u guys ...

 

v silly to argue tht by investing u can reap higher returns ... even bankers themselves also got burnt ... look at citi, goldman, etc ...

 

[Freestylers09]

oh ya...agree with u on first hand and second hand issue..usually apply to second hand to take on the advantage

 

about investment..depends...citibank ppl chiong, when $1 no one wan chiong ,same like AIG..so depend where the position they in..

 

i more cheapskate, chiong 0.10+ one..LOL

 

dont forget about dividends play the part in investing also..rights etc...eventually, ,on the right path, usually is not a problem..usually people lose on greed..

 

just whether people wan or dare to take risk in investment...if not..better put in bank and depreciate through inflation..

Edited July 7, 2009 by Freestylers09

[Throttle2]

oh ya...agree with u on first hand and second hand issue..usually apply to second hand to take on the advantage

 

about investment..depends...citibank at $100+ ppl chiong, when $1 no one wan chiong ,same like AIG..so depend where the position they in..

 

i more cheapskate, chiong 0.10+ one..LOL

 

dont forget about dividends play the part in investing also..rights etc...eventually, ,on the right path, usually is not a problem..usually people lose on greed..

 

just whether people wan or dare to take risk in investment...if not..better put in bank and depreciate through inflation..

 

 

somehow, i dont ever recall Citi at $100+