Rule of thumb, never ever buy a brand new vehicle in cash unless you can buy 10 of that in cash. Always use the banks money with the lowest possible interest rate.
@@yaboibakalli some friends and people i know laugh at me financing my cars but then don't know the psychology behind eh. I laugh at them in my mind lol
This has me confused though. If I have $60k and invest $50k, I'll need to take a bank loan in order to buy the car as I'll be stuck at $10k liquid cash. I can't withdraw % my investment every month to cover the car bills as the whole point of the investment is compound interest over time. So I'll be paying back the loan (+ interest) with my monthly income which means my monthly savings either won't grow, or won't grow significantly. So the only savings I can rely on are the ones I've invested [which are locked away]. But that means I must be sure the investment will yield positive returns - and greater than the interest rate on the loan. Isn't that a gamble? If the investment turns out bad I will have lost savings on top of paying a larger sum for the car due to the interest rate on the loan. If investments are so secure, why not pull a bank loan and invest the money outright? That way you can repay the loan+interest and still make a clean profit?
I would personally disagree with paying cash is bad, it really depends on what the interest rates are in your area, the position of the market, and how risk-adverse you are. Firstly, cars are depreciating liabilities that goes down in value, so to borrow money to lose more money is bad. Secondly, the SP500 returns about 8% on average, but there is a lot of risk in that in the short term, especially on April 14th 2021, because its at an all time high. A car loan, where I am from, is 5 - 7% interest currently even with a 815 credit score. A line of credit is about 3.5%. Except when borrowing money, the money is guaranteed to be lost, whereas in investments, you have to hope it goes up. I would always recommend people buying a car that they can afford (10% of net worth, or 30% of gross yearly income) with cash, unless they're getting an insanely low rate and/or if the markets at a low point.
my 2 cents, only finance a car you feel you’re going to own for a long time, purchase extended warranty and try to make extra payments. $1 or $1000 extra payment a month/day/week/year makes a big difference in interest trust me
I prefer leasing higher end cars. Cars depreciate and I don't have to worry about maintenance down the road as I'll lease a new car when the old lease ends. Everybody has their reasons, that's just mine.
Well u bring up some good points, the main thing u did not mention is risk. I value risk a lot in my personal finance. and so i always pay cash for almost anything. last time i had any sort of debt was a $200k mortgage on a property worth $1 million, u get the idea i dont screw around with debt. mostly because i am a investment banker, and i see how shit banks treats people and how fucked up car loan contracts and leases are. i know this because i used to work for a normal bank. a bank that issued a lot of car loans. and in the car loan contracts, if the bank were to experience solvency issues and go through a chapter 7 bankruptcy ur car will be taken away from you and ur equity would be put to 0. from what i have heard this is what also would happen to a lot of leases. where u would still have to pay the monthly lease payments. so the risk here is considerably high in ur example. ur math is correct and i agree with u on the math, ur concept is great. because regardless of the situation if we were to go through a great depresion ur investments will hit close to 0 and u would probably not be able to meet the car payments. the payment method u use might experience solvency issues aswell. so who knows u would have to sell the car regardless of the situation, because A) u would probably not have a job and ur investments would be worth zero anyways, the car would be worth 0 anyways and the company will probably see solvency issues. so regardless fuck the car, if shit hits the fan. (friendly reminder im not from the US and i speak 4 languages at work so if my english is a mix of french, german, norwegian and english her fuck it then. I have done the numbers for me and paying cash was the best idea. i own two cars, one mercedes station wagon (c-43) and a lexus rc350h. i daily the lexus to work, and drive the mercedes to the cabin in the winter and have fun on weekends. i dont live in the US and im not from the US so car payments here are around 10% interest rate. so out here it will be rather hard to finance a car based on a investment if we face a bearish year like 2018 forexample, or even covid. so to me it was always a great idea to just buy in cash. since i annualize 19% with 25% corporate bonds, 25% index funds and 50% of my own investments and company stocks (i get 33% off on my company stocks so even though the bank i work for have not done so great in the recent years i still make a profit from dividends and the discount. plus i help the company out a lot. so why not save 25% of my income in company stocks! I guess for me having a lot of security is good since im scared of another great depression or recession. I have lost my job before, and that time was the most painful of my life. so i guess having more predictability in my life is important to me. But making a informed decission that suits u is always gonna be the best option. blindly signing onto a lease or car payment is never a good idea. so to just make sure u make the most sound decision is the best! Have a great day!
two things to add: 1. if you own a business, financing a car or even paying car in cash maybe a better option over leasing as you can write off a higher amount from the taxes. 2. you can still have the title for the car even if you have a loan.
Honestly, I think leasing is the best option for you. It seems like you don’t keep your vehicles more than six months So leasing your next car is probably your best bet.
Another important point that I think you missed out on stating is that when doing a lease you have a limit on how many miles you can put in the car to avoid extra charges (usually 10-14k Miles per year)
Well in America you don't rly know this, but in Europe there are so called European funds. You can ask for these funds with your company and can use it for investments example: car, equipment etc. In this situation you buy the car cash because it's not your money. You have to write a list on what you want to buy and actually buy it after you get the cash.
finance if you have a high paying job, lease if you have a business for write off, and cash if your a baller or have too much god damn money to deal with
Or you just dont like the risk of debt. Id rather save the rate that Id pay on the car for a couple of years and then pay in cash than taking a loan. Ik that its technically not the best choice since the money is just sitting in the bank and not actualyl working for me but id rather not go into 15k+ debt unless im buying a house.
@@roarbahamut9866 Well the average Software Engineer salary can range anywhere between 120-190k and if you aren’t a complete idiot and actually graduate University in your early 20’s then it won’t be a problem. But living like a cheap mole all your life won’t get you where you need to be. Match the max in 401k and Roth and put aside 10-15% yearly income into a high yielding rate of return ETF and your just chillin. Plus pick up a house or two and start building passive. Money is not a problem that a lot of people make it out to be. It’s just the matter of actually doing something productive then lying to yourself all the time.
@@nano-maly4164 Yeah you clearly are forgetting one thing. We dont live in the same country. The average pay, living costs etc. are so far apart that it doesnt even make sense to compare. My point still stands.
I financed a used 2020 A35 (yes I know engine is not hand built) but I got it for $46,000 fully optioned. MSRP with options was 57,000 new. So not bad at all. Got a 1.99% interest rate for 72 months my payment is less than $600
is it adjustable rate? because i remember in the good old days when the bank i worked for handed this shit out like it was candy. they were shit adjustable rate that kicked in after one year, about 10% after the first year, then 15% then 20% and 20% for the rest of the term. i dont know if this is legal anymore. Because that is really shitty practice. This was the biggest regret of my life, i used "i need to eat too" as stupid moral justification for working for the bank. i later learned there are no excuses! just be careful and read the full agreement, if u have not! they often try to hide it as good as they could!
@@Abe317 that is a good loan. i personally hate credit so i would not get a car loan. but u got a good deal, if that is the case. However i dont know what the lender was smoking...
@@mhmhmmhmhm5162 it was my first Mercedes Benz and apparently they said they do this incentive for first time buyers with excellent credit. They want to keep me as a customer forever. Which I certainly will be
What did you do custom? Just wrap it and paint the emblems? Anything else? Beautiful car I’m contemplating getting this car. Not sure if it’s the best financial decision for me though.
I had a cla45 I bought cash for $40k drove it for 4 years and sold it for $35k. That is way less than leasing or financing. I am not rich but I rather buy. But again you have a good point put the money in a dividend stock and it will pay for the monthly financing fees.
You want to finance cars because it doesn't tie up your liquid cash and make extra-large payments to decrease the overall interest over time. Leasing = renting, financially it makes no sense since its money down the drain without ownership.
You are assuming that the ppl good credit scores and will pay less for a loan. Now a little over a year later, the interest rates are sky high and cars are still in a shortage. You logic of never using cash isn’t exactly ideal.
Great vid bro! This car is my favourite especially with the wrap. My first question is did you finance this car? And can you wrap a car even if you are financing it? Thanks
so are you saying finance the car and get the check I guess from the bank and put some money down on the car and the rest towards stock and use the returns from the stock to pay the car note?
Thanks for these information. Didn’t thought that finance a car is better than paying cash. Ey just a question : does people turn around their heads when you are driving the Benz?
Thanks man. I'm like a new generation and I didn't understand any types of these things but thanks to you, man. May I ask how much you had to pay in a month during those 5 years?
what if you have like 500k in stocks - anf you make 10% a year and that profit could pay for the car, would you still not buy and and not worry over any payments other than insurance?
Rule of thumb, never ever buy a brand new vehicle in cash unless you can buy 10 of that in cash. Always use the banks money with the lowest possible interest rate.
Yep!
@@yaboibakalli some friends and people i know laugh at me financing my cars but then don't know the psychology behind eh. I laugh at them in my mind lol
This has me confused though. If I have $60k and invest $50k, I'll need to take a bank loan in order to buy the car as I'll be stuck at $10k liquid cash. I can't withdraw % my investment every month to cover the car bills as the whole point of the investment is compound interest over time.
So I'll be paying back the loan (+ interest) with my monthly income which means my monthly savings either won't grow, or won't grow significantly. So the only savings I can rely on are the ones I've invested [which are locked away].
But that means I must be sure the investment will yield positive returns - and greater than the interest rate on the loan. Isn't that a gamble? If the investment turns out bad I will have lost savings on top of paying a larger sum for the car due to the interest rate on the loan.
If investments are so secure, why not pull a bank loan and invest the money outright? That way you can repay the loan+interest and still make a clean profit?
I would personally disagree with paying cash is bad, it really depends on what the interest rates are in your area, the position of the market, and how risk-adverse you are. Firstly, cars are depreciating liabilities that goes down in value, so to borrow money to lose more money is bad. Secondly, the SP500 returns about 8% on average, but there is a lot of risk in that in the short term, especially on April 14th 2021, because its at an all time high. A car loan, where I am from, is 5 - 7% interest currently even with a 815 credit score. A line of credit is about 3.5%. Except when borrowing money, the money is guaranteed to be lost, whereas in investments, you have to hope it goes up.
I would always recommend people buying a car that they can afford (10% of net worth, or 30% of gross yearly income) with cash, unless they're getting an insanely low rate and/or if the markets at a low point.
My CLA45s should be here by July and I can not wait.. love the vids man!
Godspeed!
Wow, I never expected to see you in the comment section of this guys videos😅 Congrats on the new amg. I hope you enjoy the speed!!!
congrats! that is exciting!
When did you order it? I ordered mine back in January and they told
Me 3-4 months now they’re telling me June! 🙄🙄
@@phil33603 Early Feb.. they originally said June possibly July. Got a call the other day saying it'll be July for sure.
my 2 cents, only finance a car you feel you’re going to own for a long time, purchase extended warranty and try to make extra payments. $1 or $1000 extra payment a month/day/week/year makes a big difference in interest trust me
Yes it does. I agree on that as well, that is why sometimes short term leasing is better if you want to switch cars often
I prefer leasing higher end cars. Cars depreciate and I don't have to worry about maintenance down the road as I'll lease a new car when the old lease ends. Everybody has their reasons, that's just mine.
Well u bring up some good points, the main thing u did not mention is risk. I value risk a lot in my personal finance. and so i always pay cash for almost anything. last time i had any sort of debt was a $200k mortgage on a property worth $1 million, u get the idea i dont screw around with debt. mostly because i am a investment banker, and i see how shit banks treats people and how fucked up car loan contracts and leases are. i know this because i used to work for a normal bank. a bank that issued a lot of car loans. and in the car loan contracts, if the bank were to experience solvency issues and go through a chapter 7 bankruptcy ur car will be taken away from you and ur equity would be put to 0. from what i have heard this is what also would happen to a lot of leases. where u would still have to pay the monthly lease payments. so the risk here is considerably high in ur example. ur math is correct and i agree with u on the math, ur concept is great. because regardless of the situation if we were to go through a great depresion ur investments will hit close to 0 and u would probably not be able to meet the car payments. the payment method u use might experience solvency issues aswell. so who knows u would have to sell the car regardless of the situation, because A) u would probably not have a job and ur investments would be worth zero anyways, the car would be worth 0 anyways and the company will probably see solvency issues. so regardless fuck the car, if shit hits the fan. (friendly reminder im not from the US and i speak 4 languages at work so if my english is a mix of french, german, norwegian and english her fuck it then.
I have done the numbers for me and paying cash was the best idea. i own two cars, one mercedes station wagon (c-43) and a lexus rc350h. i daily the lexus to work, and drive the mercedes to the cabin in the winter and have fun on weekends. i dont live in the US and im not from the US so car payments here are around 10% interest rate. so out here it will be rather hard to finance a car based on a investment if we face a bearish year like 2018 forexample, or even covid. so to me it was always a great idea to just buy in cash. since i annualize 19% with 25% corporate bonds, 25% index funds and 50% of my own investments and company stocks (i get 33% off on my company stocks so even though the bank i work for have not done so great in the recent years i still make a profit from dividends and the discount. plus i help the company out a lot. so why not save 25% of my income in company stocks!
I guess for me having a lot of security is good since im scared of another great depression or recession. I have lost my job before, and that time was the most painful of my life. so i guess having more predictability in my life is important to me. But making a informed decission that suits u is always gonna be the best option. blindly signing onto a lease or car payment is never a good idea. so to just make sure u make the most sound decision is the best! Have a great day!
I rather buy it cash to get honest , no need to deprive myself from having a car paid off because of money
Great advice tbh, some consumers are more risk averse than others
two things to add:
1. if you own a business, financing a car or even paying car in cash maybe a better option over leasing as you can write off a higher amount from the taxes.
2. you can still have the title for the car even if you have a loan.
Thanks for those. In most cases the bank wants to have the title but yes you can have it
Honestly, I think leasing is the best option for you. It seems like you don’t keep your vehicles more than six months So leasing your next car is probably your best bet.
Yeah I’m looking into leasing through my business under my youtube account
Another important point that I think you missed out on stating is that when doing a lease you have a limit on how many miles you can put in the car to avoid extra charges (usually 10-14k Miles per year)
They don’t got unlimited miles options?
Well in America you don't rly know this, but in Europe there are so called European funds. You can ask for these funds with your company and can use it for investments example: car, equipment etc.
In this situation you buy the car cash because it's not your money. You have to write a list on what you want to buy and actually buy it after you get the cash.
Can't wait for your new channel! Great at explaining everything
Thanks man! Excited to launch it
Good info thanks
finance if you have a high paying job, lease if you have a business for write off, and cash if your a baller or have too much god damn money to deal with
Or you just dont like the risk of debt. Id rather save the rate that Id pay on the car for a couple of years and then pay in cash than taking a loan. Ik that its technically not the best choice since the money is just sitting in the bank and not actualyl working for me but id rather not go into 15k+ debt unless im buying a house.
@@roarbahamut9866 Well the average Software Engineer salary can range anywhere between 120-190k and if you aren’t a complete idiot and actually graduate University in your early 20’s then it won’t be a problem. But living like a cheap mole all your life won’t get you where you need to be. Match the max in 401k and Roth and put aside 10-15% yearly income into a high yielding rate of return ETF and your just chillin. Plus pick up a house or two and start building passive. Money is not a problem that a lot of people make it out to be. It’s just the matter of actually doing something productive then lying to yourself all the time.
@@nano-maly4164 Yeah you clearly are forgetting one thing. We dont live in the same country. The average pay, living costs etc. are so far apart that it doesnt even make sense to compare. My point still stands.
normal person in my country doesn't drive cla 45 amg , they drive golf 4 -2004
golf 4 is the best though
Agreed it all depends on your financial situation
yep exactly!
I financed a used 2020 A35 (yes I know engine is not hand built) but I got it for $46,000 fully optioned. MSRP with options was 57,000 new. So not bad at all. Got a 1.99% interest rate for 72 months my payment is less than $600
nice that sounds like a pretty good deal!
is it adjustable rate? because i remember in the good old days when the bank i worked for handed this shit out like it was candy. they were shit adjustable rate that kicked in after one year, about 10% after the first year, then 15% then 20% and 20% for the rest of the term. i dont know if this is legal anymore. Because that is really shitty practice. This was the biggest regret of my life, i used "i need to eat too" as stupid moral justification for working for the bank. i later learned there are no excuses! just be careful and read the full agreement, if u have not! they often try to hide it as good as they could!
@@mhmhmmhmhm5162 fixed rate for 72 month. Had 750 credit score
@@Abe317 that is a good loan. i personally hate credit so i would not get a car loan. but u got a good deal, if that is the case. However i dont know what the lender was smoking...
@@mhmhmmhmhm5162 it was my first Mercedes Benz and apparently they said they do this incentive for first time buyers with excellent credit. They want to keep me as a customer forever. Which I certainly will be
What did you do custom? Just wrap it and paint the emblems? Anything else? Beautiful car I’m contemplating getting this car. Not sure if it’s the best financial decision for me though.
Good content bro, new to your channel and just subbed! Looking to lease a cla 45 or the 2020 genesis g70
We don't pay in cash. We invest it in GME and DOGE and hold. 😄🚀
YES SIR haha
@@yaboibakalli rekt
GME let’s go !!!
Not a smart move 😭
Thanks for the teaching💯
yes sir!
Just discovered your channel. Absolutely amazing content 👌
Yes needed this vid about to get mines soon
Love your videos bro 🔥
thank you :)
I had a cla45 I bought cash for $40k drove it for 4 years and sold it for $35k. That is way less than leasing or financing. I am not rich but I rather buy. But again you have a good point put the money in a dividend stock and it will pay for the monthly financing fees.
Yep totally depends on what you are buying. Sometimes buying a used car for cash is smarter in some ways!
How the f did you still get 35k after driving it 4 yrs? Assuming that its atleast 5 yrs by then xD
How much do you approximately pay a month for the finance?
You want to finance cars because it doesn't tie up your liquid cash and make extra-large payments to decrease the overall interest over time. Leasing = renting, financially it makes no sense since its money down the drain without ownership.
You are assuming that the ppl good credit scores and will pay less for a loan. Now a little over a year later, the interest rates are sky high and cars are still in a shortage. You logic of never using cash isn’t exactly ideal.
Great video my friend! Very informative!
Thank you!
you would need at least 200k usd in dividend stocks to get a cashflow of about 1000usd every month
you can use that cash for other investments as well, I know a lot of people that have had to sell their cars to fund investment opportunities
Great vid bro! This car is my favourite especially with the wrap. My first question is did you finance this car? And can you wrap a car even if you are financing it?
Thanks
so are you saying finance the car and get the check I guess from the bank and put some money down on the car and the rest towards stock and use the returns from the stock to pay the car note?
Great content
thanks!
Cars a depreciating asset why own a depreciating assets.
its true
Thanks for these information. Didn’t thought that finance a car is better than paying cash. Ey just a question : does people turn around their heads when you are driving the Benz?
it is when you can make money off of that cash and yes they do
@@yaboibakalli "IF"
Cash or not, u should only buy cars that r cheap, commute cars. Anything sports, luxury, u lease
Thank u!
of course!
Love the sound of that car. Anyway, what do you do for a living?
Have a nice day 💚
Thanks! I work in real estate right now
Thanks man. I'm like a new generation and I didn't understand any types of these things but thanks to you, man. May I ask how much you had to pay in a month during those 5 years?
He bought it cash!!
what if you have like 500k in stocks - anf you make 10% a year and that profit could pay for the car, would you still not buy and and not worry over any payments other than insurance?
That is a good scenario to not worry about payments
What's the name of the wrap you used?
How about the broken situation in the previous VDO ? Can you please update ?
waiting to hear back from mercedes
exhaust sounds better than normal, did you do anything to the exhaust? lol
nope that is stock haha
Are your red calipers stock? I'm building specs on the website and I don't see red calipers as a option:(
Yes it is part fo amg dynamics package
Bro let's take for ex if i get a cla 45 in finance how much does I need to pay for it on monthly bases ??
How much does cla 45 amg cost
Bro are you serious? You are on the internet, literally just type that comment into the google search bar....
@@roarbahamut9866 😂😂😂
Put it into Bitcoin
Dogecoin
Dave ramsey would not approve
Your shoes 🤕