In Reply to: Re: Stupid move. Here's why --> (NOT!) posted by Larry in TN on October 05, 1999 at 22:21:48:
: 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).
Larry certainly makes several valid points. But I think many people (but not all) would be well advised NOT to raid their savings to pay for a car. Paying for the car out of your weekly/biweekly/monthly cash flow may result in a better savings discipline. If not, some people might not replace their savings, instead spending the paycheck on something else.