Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev Thread | Next Thread
Author: maniakes Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 11694  
Subject: Saving to purchase my next car Date: 10/21/2002 10:13 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Last May I finally paid off my current car, a 1996 Saturn. The car has about 85K miles and I expect it to last several more years. When I get ready to buy my next car, I'd love to pay cash, rather than finance it. My question: What is the best way to get to my desired goal of paying cash? The general rule of thumb for investing in equities is that if you need the money in less than 5 years, don't buy stocks. Stashing cash in a money market account at 1.75 percent interest doesn't seem to be the best bet. So what are my other options? Any suggestions?



rwd
Print the post Back To Top
Author: UncleLee Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4364 of 11694
Subject: Re: Saving to purchase my next car Date: 10/22/2002 8:40 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Grand theft auto?



UncleLee



Print the post Back To Top
Author: SRHCB Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4365 of 11694
Subject: Re: Saving to purchase my next car Date: 10/22/2002 9:05 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 3
You could be lucky, and 0% interest deals will still be available when it's time for you to buy, (let's use 3 years), which would make that 1.75% look pretty good in comparison.

The best way would be to continue making your previous monthly car payment to yourself every month, and in three years you have enough put away to pay cash.

Or, put that same amount against your home mortgage, and in three years use a home equity loan to buy a car, and the interest will be deductable.

SB (who knows what interest rates will be?)

Print the post Back To Top
Author: bksward Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4366 of 11694
Subject: Re: Saving to purchase my next car Date: 10/22/2002 10:01 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
Stashing cash in a money market account at 1.75 percent interest doesn't seem to be the best bet. So what are my other options?

Well, there are some online banks that are paying more than that. I've had a NetBank money market account for several years and it is paying 2.76% right now.

If you won't need the money for at least 6 months, you could buy US Savings Bonds. The EE bonds are paying 3.96%, but the rate for newly purchased bonds will change at the end of this month again. If you redeem them before 5 years you lose the last 3 months of interest, but since the interest is federal tax deferred and state tax free, it is a fair tradeoff. Plus, you can buy them online with a credit card and get whatever rewards your card would give you. (It is a purchase, not a cash advance.)

Since I was looking to buy in the 1-year timeframe, I just used my Netbank account to build up some cash until I bought my car this summer.

-Brian

Print the post Back To Top
Author: ntsubota Old School Fool SC1 Red Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4367 of 11694
Subject: Re: Saving to purchase my next car Date: 10/24/2002 1:00 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
>Since I was looking to buy in the 1-year timeframe, I just used my >Netbank account to build up some cash until I
>      bought my car this summer.


I'm curious to find out what make and model of car did you purchase with a one year timeframe savings account.



Print the post Back To Top
Author: bksward Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4368 of 11694
Subject: Re: Saving to purchase my next car Date: 10/24/2002 1:28 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
I'm curious to find out what make and model of car did you purchase with a one year timeframe savings account.


I didn't buy for all cash. I saved up $6k that I used toward a 2002 Maxima.

It was part of the grand plan... I got out of grad school, worked for a year and then replaced my 92 Civic with a new Maxima. I'll pay off the 60 month loan in around 3 1/2 to 4 years, and I plan on keeping this car 7-8 years and making payments to myself once the loan is paid off.

Print the post Back To Top
UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev Thread | Next Thread
Advertisement