This is how I saved almost $18K on my new Gladiator...

[sharpsicle]

I don't know that I agree with your analogy... I am using their money and paying them a portion of the interest I am earning on a fixed product that I know what it's worth now and 5 years from now. The spread is buying down the cost of the vehicle! If the finance rate wasn't what it is, I would've probably looked at something else. So I used their product to make the purchase of this vehicle more attractive.

Well no, you're using your money to invest. You could have done that without the purchase of the Jeep.

Their money is in the truck, and that's why they offered favorable financing terms. You could have done that regardless of the money you had. The purchase price is unchanged.

That being said, it makes complete sense what you did and why. I'd have done the same. It makes economic sense. But you still paid the price for the Jeep. On the books, it's still an open liability for that purchase price.

What you did was more of an economic choice than it was "saving" money. The investment and the purchase are separate from each other. Can they balance each other out? Sure. And your net outcome is definitely improved, no question there. The same can be said for many many many other types of investment or purchase strategies, but they don't lower an item's price or value or make a loan amount any smaller.

Sponsored

 

[Pescatoral Pursuit]

We looked at doing something similar with my Wife's Land Rover Discovery. We ended up paying cash instead of financing (1.9% for 60) as we did not want to have any payments.

Oof. You must be independently wealthy. 1.9% interest instead of cash is free money.

 

[Sandevino]

Oof. You must be independently wealthy. 1.9% interest instead of cash is free money.

Bwahahaha…. Nope. The diesel repair world is lucrative.

 

[WK2JT]

Where did you find a 60 month CD paying that? Everything I’ve looked at, the rates peak at 12 months right now.

 

[Free2roam]

Did you factor in the fact as soon as you drive it 1 year and you'll lose about 14%?
https://cararac.com/blog/jeep-gladiator-residual-value.html

 

[Pescatoral Pursuit]

Did you factor in the fact as soon as you drive it 1 year and you'll lose about 14%?
https://cararac.com/blog/jeep-gladiator-residual-value.html

So if he paid cash it wouldn't lose 14%?

 

[staying_tuned]

OP, do you have any slides that I can use when I pitch my next car purchase internally?

 

[ecupip]

Where did you find a 60 month CD paying that? Everything I’ve looked at, the rates peak at 12 months right now.

That's what I am saying. We need to know. I hope the OP shares that piece.

 

[lotecredneck]

I did mine through a local bank, but there are numerous ones in the 4.6 and up if you search. Bankrate.com is a good place to look and also. They are out there, you just have to look. Local banks tend to offer specials, especially smaller banks.

 

[Hootbro]

Your CD interest will be taxable income at the Federal level. Assuming you are in a 24% tax bracket and add a rough 15% inflation over that 5 years, $15,194 becomes more like $9,268

 

[lotecredneck]

Your CD interest will be taxable income at the Federal level. Assuming you are in a 24% tax bracket and add a rough 15% inflation over that 5 years, $15,194 becomes more like $9,268

The taxes associated will be a real expense. Not sure what bracket I will fall in at the time as I am retired. The inflation number is not of importance as this money would've been gone if they hadn't offered the incentive. So the return is like found money!

 

[Hootbro]

The taxes associated will be a real expense. Not sure what bracket I will fall in at the time as I am retired. The inflation number is not of importance as this money would've been gone if they hadn't offered the incentive. So the return is like found money!

Not saying you are not coming out ahead, just not $18K when you are loosing $6K to taxes and inflation.

 

[jav_eee]

1.9% is pretty decent for 72 months. I didn't know this was still offered.
One thing that I would be concerned with is committing for 5 years. I only say this because US Treasuries at a lower time is around this same % and more. The way inflation is going, the % may go up and you wouldn't want to be committed at 5 years. Another thing to think about is if the market takes a massive dive, you would have this money available to jump on the dip and ride it up a few years.
It should be noted that I'm not a financial advisor, so you should probably ignore me

i'm here for a good time, not a long time!

 

[Newjeeptruckblue]

Not a fair analysis. If you were paying the loan over time you would not have the money saved the entire time at 5.5 percent. So you would have a delta but not the correct dollar amount . Also, the 5.5 percent is before taxes. If you have 25 percent taxes, it's 4.125.

 

[Shift Happens]

Where is the 1.9% advertised? I have a 2020 lease that’s ending. I considered buying it but turning it in and buying a new one could be the better option

It's regional. My region is 6.9% for 72 months. I think midwest is where the low interest rates are advertised

Sponsored