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You should only borrow for an investment. Houses sure. Cars, less so. You’d have to be very poor with a very strong need to have a car, and then I guess borrowi

You should only borrow for an investment. Houses sure. Cars, less so. You’d have to be very poor with a very strong need to have a car, and then I guess borrowing 3k to buy an old Toyota could make financial sense

fknorangesite 4y ago
> You’d have to be very poor with a very strong need to have a car This describes many, many people.
- solveit 4y ago
  Yeah, cars are an investment in the sense that people need them to make money (hold down a job).
- dvtrn 4y ago
  Yes but saying it out loud forces people to think about what goes on outside of their own cozy, financial situations.
lotsofpulp 4y ago
It is the opposite. If you have a high income or are otherwise wealthy, why would you pay cash for a car? Borrow the money for the car since it’s usually at or near 0% interest, and invest the cash you would have needed to pay for the car in an index fund. I cannot think of a time in the last 20 years where you would have not come out far ahead by investing the money for the car.
- namdnay 4y ago
  0% finance just means you’re paying a bigger upfront cost. Buying a new car is never worth it
quickthrowman 4y ago
You pay for cars in cash? Why? My car loan is 2.5%..inflation is currently 8.x% (averaged 2-3% over the previous decade) and a typical annualized market return is 7-10%. Dropping $30,000 of cash on a car is silly, don’t sell assets that generate a return to buy a car, which is a depreciating asset… I understand not borrowing at 18-25% for consumer garbage, but financing at a low rate for a car is definitely a good idea.
- namdnay 4y ago
  Because you shouldn’t be dropping 30k on a car.. for 10k you can get a car that will easily last another 10 years
dkarl 4y ago
There are a lot of people for whom being homeless would be less disruptive to their life than being carless, especially in places outside the big cities where driving is mandatory. If you lose your car, you have to impose on somebody to drive you to work, which might cost them an hour out of their day every day, which is unsustainable so pretty quickly you lose your job, and then you have no income and no way of getting back on your feet. If you lose your apartment, you can probably find someone's basement or spare room to stay in for a while, chip in on rent, rebuild your finances, and look for a new place to stay. It's the opposite situation to being in a big city, where you can get by without a car, and the concept of a "spare room" sounds luxurious if not wasteful.
- namdnay 4y ago
  I’m not arguing no against the use of a car, I’m saying you really shouldn’t borrow to buy one, unless you don’t even have 3k
jobs_throwaway 4y ago
as others ITT have said, I borrow every month on 0% interest for everyday purchases like groceries using my credit card, and its a net financial gain for me. You just shouldn't borrow more than you actually have unless its for an investment such as a house

fknorangesite 4y ago

> You’d have to be very poor with a very strong need to have a car This describes many, many people.

solveit 4y ago
Yeah, cars are an investment in the sense that people need them to make money (hold down a job).
dvtrn 4y ago
Yes but saying it out loud forces people to think about what goes on outside of their own cozy, financial situations.

lotsofpulp 4y ago

It is the opposite. If you have a high income or are otherwise wealthy, why would you pay cash for a car? Borrow the money for the car since it’s usually at or near 0% interest, and invest the cash you would have needed to pay for the car in an index fund. I cannot think of a time in the last 20 years where you would have not come out far ahead by investing the money for the car.

namdnay 4y ago
0% finance just means you’re paying a bigger upfront cost. Buying a new car is never worth it

quickthrowman 4y ago

You pay for cars in cash? Why? My car loan is 2.5%..inflation is currently 8.x% (averaged 2-3% over the previous decade) and a typical annualized market return is 7-10%. Dropping $30,000 of cash on a car is silly, don’t sell assets that generate a return to buy a car, which is a depreciating asset… I understand not borrowing at 18-25% for consumer garbage, but financing at a low rate for a car is definitely a good idea.

namdnay 4y ago
Because you shouldn’t be dropping 30k on a car.. for 10k you can get a car that will easily last another 10 years

dkarl 4y ago

There are a lot of people for whom being homeless would be less disruptive to their life than being carless, especially in places outside the big cities where driving is mandatory. If you lose your car, you have to impose on somebody to drive you to work, which might cost them an hour out of their day every day, which is unsustainable so pretty quickly you lose your job, and then you have no income and no way of getting back on your feet. If you lose your apartment, you can probably find someone's basement or spare room to stay in for a while, chip in on rent, rebuild your finances, and look for a new place to stay. It's the opposite situation to being in a big city, where you can get by without a car, and the concept of a "spare room" sounds luxurious if not wasteful.

namdnay 4y ago
I’m not arguing no against the use of a car, I’m saying you really shouldn’t borrow to buy one, unless you don’t even have 3k

jobs_throwaway 4y ago

as others ITT have said, I borrow every month on 0% interest for everyday purchases like groceries using my credit card, and its a net financial gain for me. You just shouldn't borrow more than you actually have unless its for an investment such as a house