INFO:
If you can earn 4%+ on your money, financing a car can be smarter than paying cash. Here’s why: Buy a car for $37,500, put down 20%, and get a $30k loan for 48 months at 8% interest. Instead of using $30k cash, invest it in a 5-year Treasury bond at 4.7%. - Loan Cost: $5,154 in interest at 8%. - Investment Gain: $6,191 in interest at 4.7%. Net Gain: Over $1,000. Interest paid on the car loan decreases each year, while interest earned on the bond increases. Financing can work in your favor, but only buy what you can afford.