In Reply to: Stupid move. Here's why --> posted by MK on October 05, 1999 at 22:04:45:
: Car is not a good investment. You lose $5K the moment you drive it off the lot. Then the first 3 yrs it depreciates the most.
The car will depreciate no matter how you pay for it.
: Why drop $40k on it, when you could invest that money into something that will yield a greater return??
Because when you run the numbers you'll find that paying cash for a car is the better move.
First take your expected returns and adjust them for income tax. Your rates will vary. Next, take your after-tax return and adjust it for Beta (risk).