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Math... (archive)

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Posted by Larry in TN on October 05, 1999 at 14:57:19:

In Reply to: loooo-sah posted by caveman on October 04, 1999 at 09:22:52:

: 1) Do the math...on paper financing the car and investing the cash at a rate higher than the interest on the car loan is the best plan.

I think his math, though definately not his maturity level, is better than yours.

Take your anticipated investment returns and adjust for income taxes. Then adjust those returns again for risk so you can make an apples-to-apples comparison to the zero risk rate of the car loan. (i.e. you'll never be charged interest on a loan you don't have).

I think you'll find that you're behind the game on any reasonable interest rate on a BMW loan.

The math might work out in your favor if you're getting one of those 0.9% financing deals but then you have to see if you really could have gotten a lower price or rebate if you hadn't taken the special financing offer. Usually you could have.

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