How many Prius owners paid cash vs loan for their car?

[Sufferin' Prius Envy]

Total agreement with j24816 . . . IF your tax situation can take advantage of the $3150 credit. Look at it as though you are being paid by the IRS to finance the car NOW.

You didn't mention how much you have already put aside in your Prius slush fund. But if it is sizable, that too should help alleviate any fears of financing.

[aaf709]

Paid cash as well.

[fshagan]

I would love to have paid cash, but all we could really swing was $10k down. That reduced our loan amount by quite a bit, and as people here have said, the tax credit works in our favor this way. I'm enjoying the gas mileage double that of my last car, so its a win-win-win all the way around on this one.

Of course, it would have been better to pay cash and get the tax credit. Paying interest doesn't make a lot of sense, but at least we don't have any other credit debt except our mortgage. We're on track to have that paid off by the time we retire.

[pre-cbs]

I paid cash. Not wise to pay interest on depreciating items.

[barbaram]

Paid cash too!

shop around for rates- if you have a 457 or similar plan you can borrow against it's always a good deal since you are paying yourself back the interest!

[ServoScanMan]

I drove it home unpaid. We only have one checkbook and my wife has it. I brought a check for the full amount the next afternoon. So, I guess I paid cash.

[santoro1]

<div class='quotetop'>QUOTE(loveit @ Aug 14 2006, 09:52 PM) [snapback]303290[/snapback]</div>

I have only bought one brand new car in my life and paid cash for it. (Back in 1977.) Now I am saving again for my next brand new car: the Prius. This next car will probably be my last car, if I don't have any smash ups! If I save to pay all cash for it, it may take about a year and a half. Should I pay all cash for it or go the loan route? If I go the loan route, does anyone have any good suggestions or helpful tips/ideas?
[/b]

I just purchased my Prius three weeks ago...My car out the door (pack 4) was 25989. I put 5K down so I financed 21K to round the numbers...I went online and got a car loan from eloans...Interest rate on a 4 yr simple interest loan (no prepayment penalty- more on that later)...was 6.20. When I went to the dealer my salesman said how are you going to pay for this..I told him I already had financing. He asked me what my rate was because maybe he could do better... Thankfully I have very good credit. The finance guy told us we could have 5.95%.. I said ok, when car comes in looks like we will go with you. When the car came in we were ready to do the financing with the dealership....When the papers were being reviewed I noticed an extra $100 charge at the bottom of the finance papers...I asked about it and the finance manager said this is a bank charge that has nothing to do with us.. This goes directly to the bank. BTW...this is the ONLY thing that was a little bit funky with the dealership we dealt with..HERE IS THE MAIN POINT....I noticed the APR on the loan rose from 5.95 to 6.22% because of the $100. I told him...look, I am not happy about the extra $100. I would have liked to have been told about this when I first talked financing. He reiterated it was not the dealerships fee at all. I said ok, lets get this done...Let me make you out a separate check to the bank for the hundred.. I am not going to finance the $100 financing fee over 4 years...He said...the 100 has to appear on this form..It is not my rule it is the bank's... I said... I am NOT going to finance with you if I have to finance the 100. It makes your deal worse than eloan's deal... Then I was quiet....for a while.....He looks at me and says...I don't have your credit score in front of me...What was it again? I told him it was in the high 700's...He asked are you sure it is about 725? Absolutely. He then asks, can we do the deal if I give you a better rate? I said as long as the APR is below what I was going to pay (ie less than 5.95 I am ok with it)... He gets me 5.5 with an APR of 5.71. Now regarding the pre pay clause. Technically, you cannot pay off the WHOLE loan in 6 months or less without paying a penalty, bec the bank wants some interest at least. But you can pay extra each month to chip away at the interest. So, I took out a 4 yr loan, but have my quicken account set up to pay automatically each month an amount that really makes it a 3 yr loan...That was my strategy all along...but I like to get the extra year JUST IN CASE I have a time when I would like a lower car payment. The last new car I bought, a 2001 caravan , I did the same thing and ended up paying it off in 20 months...Everyone has there own financial situation.. This is how I have worked it. Hope this helps..

[Ichabod]

I financed through the dealer. The rate was not significantly higher than anything I saw elsewhere, and I plan to pay off as quickly as possible anyway. I put as much down as I could afford without taking away my safety net.

I also had never bought a car or house before, so I wanted the financing to help further establish my credit.

[Proco]

Well, I've always financed my cars. What I try to do is try to make my car payment something I'm comfortable with. I don't try to minimize my payment. What I don't use as a down payment, I invest. You should do whatever you feel most financially comfortable with. If you're uncomfortable making car payments, the tax credit won't really help your state of mind.

[grasshopper]

<span style="color:#996633">The tax incentive is a very valid point and would be the way to go if you’re ready to get your car now. However, everything seems to point to the fact that the Prius is about to make a big change. I’m talking about a 100MPG Prius possibly in 2009. You have no way of knowing weather there will be a tax incentive at that time or not, but there is no reason to think that there won’t be. So, as they say in the carnival; “You buys your ticket, you takes your chances".

I don’t know what I would do in your place. I am saving my money for a 2010 now and enjoying my 2006 also.</span>