Originally Posted by CBR.worm
There is a difference between having $20K sitting in the bank and/or having saved $350 a month for the last 5 years to buy a car and being able to pay $350 a month for 5 future years. Circumstances change. It would be great if everyone had lots of cash sitting around, but that is not a reasonable expectation, even though there is a vocal group here that seems to think that is the case.
And sometimes (speaking from experience - luckily(for me) it was not me that was injured), people find themselves in a situation where they planned for everything and suddenly their perfect few year old, paid for car is totaled, insurance will give them $12K, and they have almost $100K in hospital bills for a one week stay and transportation after insurance, in addition to future PT, etc. The ~$50K you have in the bank is suddenly looking kind of thin and you need a vehicle. Who will give you the best interest rate is a valid question to ask on your path forward. I'll just not drive to work while we save up money for a new car is not really a great option, nor is driving a piece of crap that may or may not get you to your 6 figure job reliably. Sometimes a car loan is not a bad thing at all.
Also, with the interest rate on my last new car (Through my bank - so no dealer shenanigans), if the car had been $20K, the loan cost would have been $900, for a total cost of almost $21K. That's a pretty easy decision. I'd rather keep the money in the bank for $15 a month.
Originally Posted by HowAboutThis
If you don't have $20k for a vehicle how does a person have $24k when you include interest on 5 years of payments? People can't manage money.
Medical emergencies and such aside, it has more to do with buying more than you can afford and status, from people I know. I'd much rather have your $900 spent on financing in my retirement account for the next 30 years than paying the bank's lighting costs. Each to their own, I guess.