Originally Posted By: KrisZ
Originally Posted By: hattaresguy
In today's low interest rate environment I don't know why anyone would pay cash for a vehicle.
If I had $50k to buy a new truck and GM was offering 0% for 60 months with the same OTD price I'd take the 0%.
Now if rates were high like 8% I'd skip the note.
Problem is that those very low interest loans are a prime contributor why people don't have any savings in the first place. Sure, the financially smart people will take advantage of these loans and invest their cash for hopefully a much higher return rate then the loan interest, but it's not without risks either.
For the vast majority, however, they don't have the cash in the first place, and just keep on rolling up new loans and spending whatever money they have left, in a belief that these low interest loans will not end.
It's not a coincidence that as the interest rates get lower and lower, people's debt gets higher and higher, as a population of course.
Exactly. There are tons of "savvy" folks who try to do things and then end up broke or worse off. Not saying the quoted posted is or is not, but there are lots of folks who because they can afford a payment, go and spend their money on other things, and end up with so many liabilities that they get wiped out easily.
Its called living within your means. Affording a payment isnt doing that. Taking 0% on a note may be but assuming the person actually has the cash (which is doubtful) inflation and market risk make it possible for a net negative return anyway.
Still, it is what it is, and people arent going to stop financing, even if to their own long-term detriment. So the OP did the right thing to minimize incurred interest and get paid off sooner hopefully.