Originally Posted By: dishdude
Pick any date...how about 2009? 2013? Any date on any year in between...I'll put my money in an investment any day over a depreciating asset.
Did you actually do the analysis? On paper, it seems like it's a pretty good bet over the last 3 years, but lately the market has been a bit sideways down about 1/4 point for the year. Also you'd have to spell out the loan period. In theory, if you buy a 20k car and have the choice of cash or finance, in one scenario, you just pay cash. The other requires a fixed loan period, 5 years at 1.5%. So you have to apply the analysis to a 5 year period where the monthly payment comes out of the 20k invested in a fund. The reason you do that is because you just have the 20k to start, either pay cash or invest it and use the returns to pay the monthly payments and see how much you have left at the end of 5 years. If the market is good, you will have more so this works over the last 3 years. If you get a 2008 year or a 2001/2002, then the money in the fund gets drained earlier and you have to make additional payments out of pocket so you would have been better off paying cash to start. If you just make payments out of a paycheck, it's not the same because you could always just invest the paycheck money into a fund instead of making a car payment.