Did you buy or lease your Prius 2010?

Not sure what a "3 year IRA" is, but using your example, "paying out right for the car at 0%" is not a better deal.

And even investing in a stock index fund (if one isn't into actively investing) would likely yield some multiple of 2%, making paying with cash more expensive.

 

The IRA was a example of a invest of money that is currently paying 2% a year on a three year investment.

Paying cash out right compared to getting 1.9% financing is a wash.

Do you have knowledge of an investment that will guarantee greater than 2% annual return over 3 years?

 

We are splitting hairs over a 1% up or down. The biggest loss is eating 40% of the equity of the car and turning it back in every three years.

 

All good points. Leasing is more expensive, but there are non-tangibles that need to be considered, such as convenience. Also, reliability is factor as a car ages, as is what to do with the car once you are done with it.

Leasing makes for a very easy, albeit more expensive, process.

That said, if you cannot afford to pay cash for the car, or any other item besides perhaps a mortgage or an education, then you should be looking for a less expensive alternative. IMHO.

 

At 2% interest, you need to question the value of paying cash, vs. keeping the cash liquid and available for other and better opportunities. Let the bank take the risk at 2%. That's only about $500 per year (and depreciating) vs. the cost of locking up $25K.

Plus you could keep it liquid in an FDIC MMA and cut into the loss somewhat.

EDIT: Looks like MMA's are paying just 1.1% right now :${

Ouch.

 

You originally said:

And I disagreed:

Now you're agreeing that--contrary to your previous statement--paying out right is not a better deal. Glad to hear that. However, you feel it's a wash, which I also don't agree with.

My point is, while most investments are not guaranteed, one could likely get a return that is some multiple of the 1.9% financing rate the other member received, making leasing as the other member did a "better deal."

 

Again, not necessarily.

In the example of the lease the other member received, I would say that the 1.9% financing rate is not more expensive than paying cash (actually, less expensive, for the reasons I stated above). Leasing can be more expensive than other alternatives, but not always.

 

You can pay cash and than pay the 2% every year for the lease.

or

You can invest your money and get 2% every year for the 3 years of the least.

It is a wash. That is the third time I claimed that. My views never changed.

A 3 year IRA will guarantee 2% a year.

Show me an investment that will guarantee more than 2%

 

Comments in bold, and below.

Actually, your view changed quite a bit, from:

To this:

After I disagreed with your statement:

First you say paying cash "at 0%" is a better deal, and now you say it's a wash. That's not consistent.

 

#1 Buying or leasing a car every three years is a horrible investment.

#2 Paying cash or investing is a wash.

My views have not changed.

 

Really? Try convincing yourself first.

It's really very amusing watching you trying to back pedal, after making such a bold--and uninformed--statement:

 

I financed mine with my credit union. As far as selecting my location I was torn I live in the U.S.A. but I am slap in the middle of the Pacific Ocean. I did select U.S. though instead if Asia Pacific. My car is a MY 2011 I voted anyway hope I did not skew your poll results.