Why You Shouldn't Rush to Pay Your Car Off

Many people claim that sports cars should only be paid for in cash. However, there are often many ways capital can be invested to outperform interest rates on auto loans. It is important to look at your options before committing large sums of cash into a car.
#autoloans #carloans #gt500

[@corralescruiser8957]

And if you pay it off early, and then continue to make the payments to your investment account for the same length of term as your loan, you'd probably come out ahead. I understand in your case why you'd want to keep the loan. If I had a sub 3 percent mortgage I wouldn't pay it off early either. I haven't had a mortgage for 15 years, but back then rates were what they are today or higher, so I was very aggressive in paying it off early.

[@EnthusiastCarHangar]

Thanks for the video! I guess it depends on the interested rate on the car loan. Yours is great. What if it was 5%? I am sure you would pay it off. Same counts for the mortgage.

[@DUNEATV]

One thing to remember is that most people do not have the money just sitting in an account and decide to finance a vehicle. Most people don’t have a dime to their name and that’s why they finance a vehicle.

[@tel111827]

Good insight right here…thanks for sharing 👍🏼

[@RubenLopez-gp2ef]

Great video!

[@marcoortega9594]

I agree with this as far as the math is concerned. What I don’t agree with, is the brain chemistry of it. Yes, you’re returns are greater if the money is invested elsewhere, but you’re in debt for a luxury car, instead of owning it out right. So I would argue, that difference of $100+ per month is worth the peace of mind knowing that this car is yours, and not the banks.

[@tedjohnson64]

Actually for some the brain chemistry works the exact opposite: they’d rather have the cash sitting in a money market account, rather than paying off the car. If a sudden large expense occurs (eg, expensive home repair), they have the cash available rather than tied up in a car. Especially if it’s a net gain, due to the interest rate scenario in the video.

[@marcoortega9594]

@@tedjohnson64see, and I think you should never have emergency funds not liquid and sitting at the ready. If you don’t have 3-6 months emergency fund in a high yield savings account, what are you doing with a car like this in the first place?