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Author: MetroChick Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308230  
Subject: Re: Auto Loan Date: 12/30/2013 7:33 PM
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I'm assuming a car loan would be 3-5 years, but no longer than 5. I personally wouldn't put money I wanted to use for something specific into the stock market for only 5 years. Right now the markets on a high - but a lot of people in the financial industry think a big part of that is due to the Fed greasing the economy - odds are they'll stop in 3-5 years and who knows if there will be a correction then.

And with a car, there's always a risk it could get damaged someway - and insurance might not pay you back as much as you still have a loan for - if the market's down at that time, than it's like losing twice.

Might be wrong - but I also thought that car insurance is higher when one has a loan on a vehicle compared to once it's paid off (but I might be wrong there).

Overall - if you have the cash I think it's better to pay cash than take out the loan and invest in the hopes your investment increases faster than your loan rate.
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