Rates depend heavily on credit score and incentives. It's not uncommon to find cars available with financing for less than "market" rate financing. For example

Rates depend heavily on credit score and incentives. It's not uncommon to find cars available with financing for less than "market" rate financing. For example, Toyota is currently financing Tundra's at 2.25% - which is well below market rate (~5%) > If they do, wouldn't it be better to take the money to buy the car from your savings and avoid paying interest? Despite being able to purchase our vehicles with cash, we tend to prefer financing for a few reasons. * It keeps our working cash liquid. Vehicles are just about the easiest thing to finance, so we can put that liquid cash to work elsewhere without having to pull from less-liquid sources. * We can get similar or better returns if we invest the financed cash elsewhere. For example, CDs are currently offering ~5% to 5.5% return. Combine that with a financing deal, and it's basically just "free" cash for financing vs buying outright.