Originally Posted By: Pop_Rivit
Buy that which you can afford to pay cash for, either new or used. Financing (or worse yet, leasing) is for those who live outside their means and don't have the self discipline to live without perpetual monthly payments.
And that "zero percent financing"? It's used to bring buyers into dealerships, and they often buy more vehicle than they originally planned, or the price isn't as low with zero percent financing. The reality is that there's no such thing as "free" financing; you'll pay for it in different ways, but make no mistake-you will pay for it.
To top it off, if you can't afford a vehicle without making payments on it, ask yourself if you really want to be a slave to years of payments just to have that new shiny bauble.
Have we had our anti-pompous pills today or not? I'm guessing not.
You say "buy what you can afford," I'll agree with that.
However, you can buy a car that you can afford, and not pay cash. As FDCG outlined in the response after your diatribe both he and myself both bought new 2012 Honda Accord LX-P's within in a month of each other. I know what he paid because I got a quote from the same Cincinnati dealership where he bought his. My price is posted on these very forums. I bought mine from a Honda dealership in Northeastern Ohio and I got the color that I wanted, and a Spoiler, Mudflaps, and side moldings for $150. more because the dealer had them already on the car. Both were stellar deals, FDCG's deal was minimum profit, on mine the dealership took a loss because of the add ons on the car.
There was ABSOLUTELY NO WAY that either of us were going to walk away with a better deal on our respective vehicles (I crunched numbers on both deals.)
Honda, as a factory to dealer incentive offered $1750. on any leftover '12 Accord. WE BOTH GOT ALL THAT $$ TO GET THE CAR FOR PRICES THAT WE PAID. To sweeten the deal, Honda offered .9 financing on any new '12 Accord. There was NO MORE MONEY thrown on the hood of these cars had we declined the incentive. Therefore, IMO that is basically free money. FDCG can explain his rationale for financing if he wants to; however, I will explain mine. I keep six months income liquid, and have the rest invested. To avoid depleting my contingency fund and to save capital (that made 16.8% in the past year), I put enough downstroke on the car that I could very comfortably cash flow the purchase out of salary. The cost for four years for borrowing this money is $275.00. For that sum, I have saved 13.4K in investment capital that is yielding 15.9% (16.8%-.9%= 15.9%)
I'll toss you a bone however. Leasing CAN be a bad deal if used improperly. It is a tool that can be useful in certain circumstances (business, etc.) However it can be a poor deal if utilized as a means to purchase a car that one cannot afford otherwise.
Financially irresponsible people make poor decisions and amass debt that is beyond their means. Using credit in a responsible manner to achieve solid financial objectives is prudent. Go gnaw on that for awhile.