[GregWeld]

Sorry Steven ---- Even I will finance a car at 1.9% -- or even 2.9%....


The very reason you state -- depreciation -- is the reason why... and the #1 reason is -- it takes way more effort to gather up the 25K ---- than it does to make the payment from monthly cash flow. The 25K should be MAKING you money -- and capital -- so in 4 years you should have 35K.... Where as the 25K car is going down in value -- so in 4 years it's only worth half.

Think of CHEAP car payments as rental... you're just paying for the amount you used along the way.

I just bought a Land Rover for our Idaho dump.... they're relatively expensive... I was trading (getting rid of) my pick up -- 2oK trade in -- and the gal says to me -- you sure you don't want to make payments --- HELL NO! I don't make payments..... But! She says... It's only 1.9% interest rate. I said -- how much down do I need then? She says -- just your pick up....

OKAY -- I wrote a check for ZERO and left with a new car... Payment? $1200 a month. Cash saved? 70+ Grand.... the 70K makes 5%.... and should have a total return of maybe 20%....

Neither of these scenarios changes the depreciation. Either way - the auto depreciates. But if I'm making 5% and paying 1.9%.... then I'm ahead. And I have the cash too!


I could buy 5,800 shares of Annaly Capital Management (NLY) at $12 a share -- and get paid $9,000 a year in dividends. That covers most of my payment -- which by the way is a LOT of principal reduction and not much in actual interest cost! So in 4 years I'd pick up 36K in cash payments -- I would have the Land Rover paid for -- so if it's worth half --- it's worth say 35K..... So I'd have 70 in cash (that I didn't put out of pocket) -- I'd have received 36K in dividends - and I'd still own a truck worth 35K...


If I paid all cash -- I'd have 35K.


Does that make sense??


BY THE WAY ---- I didn't do any of the math in order for it to have any validity.... I was just writing to make a point. The numbers would have to all be worked out. But either way -- the POINT is made.