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Author: BMNEELY Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 309605  
Subject: New CAR Cash or Finance Date: 4/16/2004 2:23 AM
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This is a long running debate in many circles. I would think even when purchasing a brand new car one should pay cash, just as they should for almost everything (Unless you use a card and pay it off every month to get those rebates).

The one argument in this battle I have never understood is that the car immediatley loses value when you drive it off the lot. Yeah so, I should finance it so I can pay more for a car that is going to immediatley drop in value. Anyhow I digress.

My real question here is I am planning on buying a new car in the next couple of months. Yes brand spankin' new. I know not very LBYM but I don't have much of a choice I am Overseas and don't want to spend a bunch of money on a car I can't bring back to the U.S. so I am considering buying an Audi A4. Roughly 26-30k depending on whether or not I decide to go for the AWD version.

So here is my situation My wife and I are debt free, fully fund our IRA's & 401K type vehicles and invest an additional 10% of our income. Not touching any of our invested assets we can pay cash for this car and not touch our E-fund, becasue we have been saving for a large purchase, either retirement land down payment or a new car, the new car has one out because we don't know where we want to retire (talking first retirement here military).

So what would you do put 50% down and Finance the rest, or pay cash and rebuild the large purchases fund by putting the ammount that we would have been paying in savings?

I lean toward the latter but that large of an outlay makes me nervous even though I know we can afford it.

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