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Hello everyone I'm facing a cash vs debt dilema. I would like to purchase a car worth $100,000. My father is willing to give me $50,000 upfront to buy the car leaving me to take a loan for the remaining $50,000. I personally think $50,000 of my own money (or rather dad's) is too much to put out and think this doesn't make much financial sense. I'm currently weighing the option of taking a full loan for $100,000 over a 6yr term and keeping the $50,000 from my dad and investing it. Here are my 2 Options, which one is the better option:

OPTION 1: LOAN FULL AMOUNT ($100,000)

1) $100,000 Loan -12% APY Monthly Payment= $1995.02

-Total Interest over 6yrs= $40,761

- Total Repayment=$100,000 + $40, 761 Interest = $140, 761

However If I keep the $50,000 and invest it in a MMA at 5.5% (compounded monthly)I earn a total of $69,495.99 which can be used to offset the amount of the loan. Thereofre at the end of 6yrs:

My net cash outflo

2007-09-17 06:30:24 · 7 answers · asked by amberlene202 1 in Business & Finance Personal Finance

Ok a piece of important information that left out... I am not from the United States. The car I'm interested in is Toyota Carolla which retails for around $125K.. I'm not going to get a new car for less than $100K in my country. Used cars typically retail for $70K and up.

2007-09-18 03:38:28 · update #1

7 answers

I think buying a $100K car is ridiculous. But the cost of financing the car has got to be more than whatever return on investment. Your calculations are incorrect. Even if the interest rate was compounded daily, there's no way you would make $69K off $50K in 6 years.

Why don't you just lease the vehicle? You're probably only going to keep the vehicle 2 years anyway.

2007-09-17 06:50:13 · answer #1 · answered by bdancer222 7 · 0 0

The interest you would be earning in that time period almost equals the money you would already have for this car. I would just put the money towards the car and have less money earning negative interest. Why are you even buying a car worth 100k?

2007-09-17 07:40:36 · answer #2 · answered by Manny 4 · 0 0

100,000 for a car is a waste of money. Spend it on a down payment on a house that will pay you back in the long run. A car will depreciate and will never pay you back like a house can. Plus you can live in a house.

2007-09-17 06:45:56 · answer #3 · answered by Anonymous · 1 0

one million- That rate for a auto with that low mileage is almost unattainable except there may be anything improper with it or it has a salvage identify (rebuilt after a principal auto break/immoderate water harm). two. Dealer financing might incorporate a daft curiosity cost - evaluate mortgage premiums after speakme straight with a financial institution, the dealership and likewise seek advice a nearby credit score union. three. If you in my view recognize a mechanic - ask them to assess out the auto earlier than purchasing. It sounds extremely suspicious even though it's anything like a Kia. You even have the choice to pay a storage to assess it out however name/ask and make an appointment with them earlier than simply taking the auto over. four. You'll even be required to get complete insurance policy irrespective of who you get financing from. The dealership can even require complete insurance policy auto coverage at the automobile.

2016-09-05 17:02:23 · answer #4 · answered by ? 4 · 0 0

how about this... dont buy a car thats worth 100,000... instead buy a car thats worth 10-20 only.. that way u'd still have enough money to invest on whatever u like...

2007-09-17 06:40:19 · answer #5 · answered by Anonymous · 4 0

Buy a cheaper car. Who needs a 100k car?

2007-09-17 06:44:05 · answer #6 · answered by JB 6 · 2 0

YOU SILLY GOOSE - ONLY A FILTY RICH PERSON WOULD BUY SUCH AN EXPENSIVE CAR.

2007-09-17 06:59:20 · answer #7 · answered by SUPER WOMAN! 2 · 0 0

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