Financing the Prius

Are you able to qualify for Kinecta CU? www.kinecta.org although it's 5.24% now and not the 4.49% previously.

 

In one breath I'm sorry to hear this happen and in the next I think it is better for you. I can never advocate taking out an equity on a home to purchase something that is not directly related to the home. If an equity loan isn't plowed back into the property, it is basically a rather unsafe proposition from day one. Thank you for the clarification about the rate, term etc. I apologize for not paying more attention to the specifics of the loan. Although it would appear than an equity at the rate they quoted you for 60 months would still cost you more than the low rate short term car loan you found and the credit union.

So long as your already taxed principal in the investments is greater than the amount you need to withdraw for a down payment there shouldn't be any tax liability. It might have to show up on schedule D at tax time, but so long as it doesn't encroach on untaxed or sheltered earnings from the investments it isn't a problem. The principal you put into an investment has already had the taxes paid for it to become true principal and as such it cannot be taxed again just because it is repurposed (investment to purchase). However if you had a small amount of principal and it has grown and there are untaxed/sheltered earnings that are now compounding in those investments you would have tax exposure for the tax year you repurposed that money.

Anyway, my viewpoint is that the reason people invest is so they can make money without actually having to work for it, and so that they can secure their future. It is more intelligent to save for a major purpose (retirement, compounding investments, major purchases, emergencies) and use that money to make a purchase and then reimburse themselves over time, plus extra so they can do it all over again, than it is to let money sit and earn while they turn around and take out debt and pay. Counterintuitive to me.

I guess I'm a simple mind.

 

That probably would not work since lump sum principal payments do not have the effect of lowering the monthly payment on this type of product. Rather, the end result is the payment remains the same with more of the payment being applied to principal. In this instance, reducing the principal balance to $100 would result in the loan being completely repaid upon making the payment in the following month and, thus, trigger the provision for payment of closing costs.

This scheme would work, of course, with a HELOC but that's not the product being considered.

 

I did the same thing, or tried to, the dealer would only let me put 5K on a credit card because it costs them to much money. I did that with the 5K because like you said 0% is pretty good interest, besides I get some "cash back" or a goofy little prize or something.