CHECK OUT CARS & BIDS! Yes, it’s true: you should probably finance your next car, and not pay cash. Today I’m explaining why it often makes more sense to finance your car, and not pay cash — and I’ll explain the scenarios where I think financing a car is better than paying in full. WEBSITE & MERCH! FOLLOW ME! Twitter – Instagram – Facebook – DOUGSCORE CHART: .
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Why You Should Finance Your Car (And Not Pay Cash)
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Why You Should Finance Your Car (And Not Pay Cash)
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आप यहां बहुत सारी उपयोगी जानकारी देख सकते हैं।: यहाँ और देखें
आप यहां बहुत सारी उपयोगी जानकारी देख सकते हैं।: यहाँ और देखें
45 comments
this video didn't age well
One of your best videos yet. Thank you, Doug!
I don't know if I should take financial advice from a guy who giggles while he talks
The other safety stuff is nice, the back up cam is highly overrated. I know people that crash with them / run stuff over because it's a skewed perspective. I always just my shoulders and mirrors instead. Much faster and more reliable.
1000$ a month car payment is a lot
You just gave Dave Ramsey a stroke.
I had this conversation with a friend yesterday who spends cash on everything. He doesn't understand why I would finance a $100K car and not pay cash. Why would I spend my own money on something when I could reinvest my money to expand my business? People don't understand the benefit of debt so they don't leverage it properly. If you make $50K a year though, you should NOT be financing a $80K pickup truck, unless you have a business and can write it off.
He’s a great guy, but I think he should stick to reviewing cars. The problem is that 99% of human will not invest that money. They will see it as disposable cash, spend it in luxury vacations, then struggle to continue making the car payments.
The best financial advice: don't buy a new landrover.
Buy a corolla cash and put the rest in the market….but that's kinda boring lol
6:14
What is that about
Doug “no motorcycles they’re unsafe” DeMuro
Doug missed a huge point here. People in the pay-cash crowd aren't buying $70K cars. The down payment on a car like that is probably more than these people pay for their cars. When someone says they only pay cash for cars, they probably mean they like buying late model Camrys for $15K…
Doug has his quirks but I liked the advice he gave. However my favorite part was the dog chillin behind him. In drivers seat no less
Ok its official, I like Doug. He has grown on me and I admit i have become a fan. I like this video as this is the exact situation I am in. I appreciate hearing a different side. Thank you
I bought my brand new 2020 Corolla before the chip shortage and when nobody was buying cars. I bought it at 1% financing over 5 years. Something Toyota never ever does on their new lineup and probably never will again with the chip shortages. I had the money to pay for it in full. However, at 1%, I invested in the stock market and I’m still receiving more dividends than ever
Wow man I did the same thing when I purchased my Harley without even noticing it.
So I think people should do what he says and tell us if the market makes you more money while debt is still super cheap. Most people will get burned bad bc they do t know how to balance all that. And he doesnt mention the transaction fees of putting in and taking out money in the market.
Dave Ramsey may have a stroke if he sees this
I have lost so much money on cars that I will never recover financially.
Yeah, buy at 35,768 and get crippled by Russian-Ukrainian war in less than a month (dipped to 33,131). And then live with the stress of what will happen if the war escalates.
The problem is most people shouldn't be buying $50,000 or $70,000 cars. Also, most of the time those interest rates aren't that low. Despite having excellent credit I'm still seeing 4% or higher interest rates on used cars. Usually I've seen those interest rates on brand new cars which really 70-80% of people buying them shouldn't be buying them.
Why does everyone make a $20,000+ car an absolute necessity? Yet they spend so much on coffee and other useless things. A $7,000 used car that is well maintained gets you to your destination the same way since the ultimate goal is transportation. And I have $13,000 in personal equity still. And saying the “car safety” features are a necessity mean nothing when you cant account for people who still merge even when their blindspot detector is on and take 5 minutes to back in a car that has a backup camera….that doesnt fix stupidity. It can build bad habits because you think the car wont ever let you mess up.
Avoid financing/buying expensive cars IF YOU KNOW YOU WILL PAY CHECK TO PAYCHECK. Fuck leaving that way. I lived paycheck to paycheck since i was 18 i am 32 now. I regret wasting. Yes wasting so much money on new cars and not saving and buying a house instead. NOT ANYMORE! I returned my cars for a loss but idgaf! I NO LONGER HAVE A CAR PAYMENT BUT MY ACCOUNT LOOKS PRETTY. I HAVE MONEY NOW TO BUY WHATEVER MY DAUGHTER WANTS. NO MORE PAYCHECK TO PAYCHECK Bs! Financing, leasing cars is pure scam! Save people!!!! Save save save save save!!!!
debt is cheap and money loses value over time… there literally is no reason not to get as much debt as you can qualify and afford.
Skip to 4:53
Well where i live at people mostly finance their cars. And the biggest way of why is that is that something might come up and you spend that extra money which you don't have anymore
I hope everyone is aware that Dough, though may not be intentional, does have a conflict of interest when it comes to this advice. He owns a website on buying/ selling cars so it would be in his interest to promote financing as that would open up to more customers compared to people just paying with cash.
When you get a car on "Cars and bids", do you pay cash?
Lol “if I had invested it in an index fund…” Yea, but you didn’t, did you?
You’re great on cars Doug, but not on finances. Get hurt tomorrow with all of the various liabilities you’ve stacked up and then let us know how well your life is going then.
If you can’t buy it with cash, you can’t afford the car.
Financing depreciating assets is the very definition of financial illiteracy
Another thing I see where these “smart” people think they are saving money is by buying cheap low quality tires! NEVER buy cheap tires! Not only they can cost you your life but you actually don’t save any money because they don’t last no where near as long as good quality branded tires!
I generally prefer older cars BECAUSE OF the lack of safety features, its more fun and less annoying. Im an adult, let me decide what i wanna do. If i get hurt or die, its not the manufacturers fault its my own. I think people that heavily rely on lane keep assist type features are lazy and they cause problems from not paying attention like they should.
CARS AND BIDS
Don’t support the capitalist debt cycle. Buy with cash.
As a former banker for a federal bank, you should be very careful when you use the word "advise" or "advice" because you can open yourself up to financial litigation if someone claims that what you said adversely harmed them and you were providing advice as a professional, it also can be viewed as doing licensed work without a license… just watch how you word these things
Video starts at 5:00
Starts at 4:55
Friend of mine that I always looked up to, a bit of a mentor told me something about finance once. Either finance it as much as possible or pay it in full. Don't do halfway. In other words keep yourself liquid for other maneuvers or pay cash in case you need to sell it. He was extremely wealthy, and still as to this day.
Retroactive stock market gains to justify financial plans…… but then Russia bombs Ukraine.
The cheapest car at the dealership is the one that you drove to get there.
Just a few months after Doug posted this video, inflation got insane, the stock market plunged, and the Fed started to realize it would have to raise interest rates. In other words, most of the big reasons to finance a car vanished. This is why most people say "this is not financial advice" – because those with experience in the field know things can do a 180 at any given moment.
Wholeheartedly agree, sir! Pretty much everything you said was on point.
Cash is king!
Finance de car, it will:
1. Reduce ur income-tax (cuz ur increasing expenses)
2. Reduce pressures in paying in bulk instead of paying little bit by bit
3. Always have cash for emergencies use!
Aside from assumptions about market returns in a short timespan – which Doug acknowledges – this comparison of the returns from the market on money you had in hand, but invested while taking out a car loan, is missing another big point: the monthly payments.
Let's say you have at least $50K in cash on hand for whatever reason (inheritance? insurance payout? found a bag of cash on the train?), and want to buy a $50K car.
Scenario #1: Pay for the car in full ("with cash"). Five years later, you are left with the value of the car, for whatever its residual value is.
Scenario #2: Put $20K down and borrow $30K at 3% interest, while investing the $30K in cash into the market (like an S&P 500 index fund). Five years later you now have full title to the car, plus whatever your investment returned.
Even if the market is GREAT over those five years, and you doubled that $30K to $60K, you aren't just getting $30K profit "for nothing" (aside from having to sell the shares to realize the gain) – you also had to pay 539/month for 60 months.
Is 539/month not going to, ah, inconvenience your month-to-month budgeting?
And if not… If you already "bank" 539+ a month in savings anyway… Well then, why haven't you been investing that 539/month in the same index fund? Which would probably get you a lot of that "market returns profit" right back, right?
Now all you're left with is the TIMED risk of market volatility – you're putting a 30K bet at one time, versus 60 smaller bets over five years. Hope you didn't do this back in Dec 2021, the market's taken quite the downturn; but kudos if you did it in October 2016, just ahead of a record S&P five-year return.
Here's another way to think of it: the loan is a fixed rate debt (3%), what is the highest fixed rate return investment you can get for the same term? A five-year CD right now yields at best 1.10%. Can you get a loan for less than that? If not, you're betting on SOMETHING – be sure you understand the risk you're taking. The shorter the time frame, like ofer a typical five year car loan, gets even shorter if you're analyzing putting a huge lump sum of cash into the market at one time.
Finally, financial analysis aside, owning a car outright means you have the title (not the bank) and it's much easier to sell it if you have to, like in a private sale, where you tend to get the most money (versus "trading it in" to a dealership).