Huntindog wrote:
What is risk priced at?
This is an important question, as to get the returns you are expecting,,, it is not zero. In your case, you are willing to take a chance that your money will earn 4-6%. It may not, in fact you can lose principle, never mind the interest. There hasn't been a risk free way to make that kind of interest for decades.
Paying cash means you efectively made 2.5% Garaunteed! RISK FREE! And this is tax free as well! Any other method of investing will be taxed at some point... A saving is never taxed.
And if you are in a position where you can save on taxes by claiming interest as a deduction... We are not even speaking the same language...You do realize that a deduction is not a dollar for dollar savings? Only a credit does that.
I don't dispute what your saying, cash is always king.
But buying with cash doesn't eliminate the risk.
The 50K truck is no longer worth 50K the minute you drive off the lot.
Granted we are in weird times,but generally an auto is a deprciating asset.
In terms of 0% and who pays. Often banks and car dealers are in cahoots. In doesn't hurt to use the banks money a little and pay the loan off early sometimes you can get the best of both worlds.
Banks are generally gambling you will not pay off early. It's possible to beat them at their own game.
It's all in the deal. Paying cash can have its pitfalls as well
