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Author: Jacketfan Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 309293  
Subject: Re: Revisiting New Auto Purchase Date: 12/6/2011 9:16 AM
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4 - Loan:
Interest is the actual amount of interest paid on the auto loan over the last 17 months.

You are missing one rather large difference in cash flow--the cost of the car payment.

Now, you could argue that you are not including that because of the actual value of the new car as an asset. But in that case, I would say you also need to include the cost of depreciation.

Don't get me wrong, I agree with you that new car purchases, financed with low interest loans, are not inherently bad decisions. But that assumes you plan on keeping the car long enough. since your last one is 12 years old, I'm assuming you will. In the long run, the higher cash outflow will pay off fine (assuming of course that you can afford the higher outlfow in the first place.)

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