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

[tmgrl3]

Cash.

Our fourth Toyota, or fifth...the others were finananced and we had some leases when we had our business...but in retirement...no loans, please.

My dealer said yesterday they are up to a nine-month wait now...so glad I get the tax credit!!

[daniel]

I never borrow money. If I can't pay, I do without. This is partly financial, partly emotional: Interest paid on a loan is money down the drain; and a loan is like a sword of Damocles always hanging over your head: if anything goes wrong, you're screwed. Lose your job: lose your car (or your house, or whatever you've bought on credit).

j24816 makes a good point about the tax credit (assuming it really does expire - one never knows what those clowns in D.C. will do). But that only affects the first part of the equation: the numbers when all goes well. It does not affect the second part: the emotional stress of having to make monthly payments.

Americans are so brainwashed into accepting credit that it seems normal and even necessary.

Credit card companies call people like me "deadbeats." That's because I pay my balance in full every month and never pay a penny of interest. If they're calling me a deadbeat, it's because I'm the winner in the deal. The card is a convenience, and sometimes (e.g. when renting a car) a necessity. But I don't accept loans.

When I was poor I did without a lot of posessions. Now that I've got money, I can buy stuff. My sister was just the opposite: she always carried the maximum limit on all her credit cards. She always had a lot more stuff than I did, but the stress made her an emotional wreck.

My advice: save up your money and then buy the car with cash.

[Jonnycat26]

I guess I took a 'hybrid' approach... pun intended I think.

I took a loan, but only so I could get a better deal on my trade-in and get the extended warranty on the cheap. After the first month, I paid the loan off.

Salesmen are always willing to bargain and bend on price if they think they can make it up over time on interest.

[tduescher]

<div class='quotetop'>QUOTE(wmhunter @ Aug 14 2006, 09:33 PM) [snapback]303313[/snapback]</div>

I paid cash, but that didn't mean anything to the dealer; the car was full list price, anyway. But at least, I didn't have to be on the waiting list. The car had just come in from another dealer, in a dealer swap for something the other dealer wanted, so it wasn't presold. Otherwise, I would have been on the wait list for at least six weeks.

All that said, if you decide to get a loan, see your bank first. They generally have interest rates about as good as dealer/manufacturer financing, and can be a lot easier to work with, since (I presume) you have a deposit account with the bank. On the other hand, there are times when dealer/manufacturer financing runs interest rate specials, with very low rates. Whether Toyota does or not, however, I couldn't say. All of their cars seem to move well without special financing deals, such as, let's say, Ford might have.

My first post: Twelve-day old Prius, white, package 4, 35 mpg on the first tankful. I think I'm in love.

Kindest regards,

Bill Hunter
[/b]

Paid cash as well - Ditto on the Tax credit. I was able to get a white, Pkg 4 in one week. I searched the web and found a dealer out of state with an unassigned allocation. My local dlr was sold out for the next 4 months. (Missing the tax credit window)

My first tank was 48 MPG with about 50 miles in Chicago traffic, the rest interstate and local highway.

My Silverado 2500 HD gets about 15 MPG on a good day with a 40 MPH tailwind.

Solution to the oil problem -

Tax the gas hog vehicles and apply ALL of the the money to tax credits for the fuel efficent vehicles - Tax based on a sliding scale of the MPG rating. People will gravitate to fuel efficiency and the engineers in Detroit may finally figure it out.

The oil problem will take care of itself!

[huskers]

Cash with trade-in.

[Ichabod]

Sounds like a lot of people really dislike the idea of credit. As long as you manage debt with a LOT of care and dilligence, then there's nothing wrong with it. IMO, doing without something like a house when you can afford a down payment is just palin stupid because your rent is going into someone else's equity, not your own.

The OP sounds concerned enough about the dangers of credit though, and back to that point, the question was whether they should save up for a year+1/2 or so, or finance now. I'd say if you think you can afford a large down payment now, and to pay off the car in a year then go for it. You won't be out much by way of interest, and the longer you wait, the longer you'll want to wait for the next sexy model, and the longer you'll be driving around in some priustoric clunker and kicking yourself every day

... oh and p.s. NEVER accumulate debt on a credit card. THAT is a really really bad idea. And for reasons I can't fathom, that's a bit of advice that a lot of Americans desperately need.

[Loveit]

Thanks everyone for your input. It is much appreciated.

I do have a credit card but always pay it off in full at the end of the month, so I guess you could call me a deadbeat.

The average American family is anywhere in cc debt from $10,000.00 to $15,000.00. Reason being is that missing payments adds up to: late payment fee, and increased rates not to mention ruining your credit rating.

You are right about having a sword hang over your head when there is debt to be paid.

AJS made a very good point about the dealer regarding the extra $100.00 per the bank so that they could make their interest over 4 years of time which would probably be outta sight and no where near the $100.00!

When I bought my 1st car many years ago, it was a Caprice Classic, 1977. I paid $5700.00 give or take the odd amount, in full, in cash. Got the car I wanted. Green, with beige leather, v-6 engine, with A/C, and AM/FM radio. For me this was a big deal. (I kept the car for about 10 years or more I believe.)

The car salesman was a good, honest man. (He had 13 kids to support, no kidding!)

So all of my dad's co-workers bought their cars from him for $500.00 over dealer cost. Whatever you wanted is what you got without the hassling or the arm twisting. (He was very customer service oriented for obvious reasons, he needed to be able to support his family.) Word of mouth just spread like wildfire and he had many, many customers.

This guy was car salesman of the month for years and no wonder!

Too bad, dealers don't sit up and take notice!

Unfortunately, he died from diabetes not too long after I bought my car from him.

It looks like I might be saving a while until I have all cash or until I have to buy. But I think I am going to pay cash!

Thanks for all your input everyone!

[gdurishan]

<div class='quotetop'>QUOTE(loveit @ Aug 14 2006, 08:52 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 will be getting my Prius (package 3) in a few days. Paid $1000 on a 0%credit card for 15 months. Put 22,900 on a 2.99% balance transfer from Citibank (it's for the life of the loan). That's the beat any financing deal I could get and I get to keep all my savings in my mutual funds. There's good and bad to this. The bad is that I soaked up the limit and I must must pay on time (I always do). The good is that the rate is 1/2 of any rate I could find. If I lose my job I can make minimum payments. I'll take the 3150 from the feds to pay the 0% loan and the rest towards the loan. Oh and I get the title.

[daronspicher]

What would be interesting to see, is how many people bought the car, financed the whole thing, then will get the tax credit, but not apply it to the car debt, but rather spend it on other junk they don't need.

We paid trade + cash + finance. At our 6.5 month mark, it will be paid off.

[airpolgas]

If the OP is nowhere near the full price of the car, I'd say save up more. By the time you're ready, you'll get the next generation Prius, which is about 2 years away. and will have better mileage, if not a plug-in option.