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Author Topic: Should retirees finance a car or pay cash? Back to Topics
mastermariner

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Texas

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Message Posted: Oct 12, 2013 3:50:12 PM

With this year's low interest rates, retirees who are on the hunt for a new car or truck have many payment options. They could finance at current interest rates, which average less than 4.5 percent for a 60-month loan, according to Bankrate's latest national survey. Or, they could use money from their own cash reserves.

Baby boomers should carefully think about each possible scenario before making a large car purchase. A mistake could put their retirement plans in jeopardy, says Damian Rothermel, a Certified Financial Planner professional in Portland, Ore. "Buying a car and figuring out how to pay for the car should take into consideration a number of factors," he says.

Here are some major points retirees need to consider when deciding whether to finance or pay cash for a car or truck.


Visit Bank rate for full article
REPLIES (newest first) Post a Reply
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oldmack
Champion Author Riverside

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Message Posted: Oct 14, 2013 3:15:28 AM

ok
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danindenver
Champion Author Denver

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Message Posted: Oct 13, 2013 10:06:11 PM

This is a no-brainer.

Always pay cash.
Period.


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BBopp
Champion Author Dayton

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Message Posted: Oct 13, 2013 5:06:00 PM

If there is zero % financing, then finance.
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Norm10
Champion Author British Columbia

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Message Posted: Oct 13, 2013 2:53:12 PM

If you have the money pay cash - unless they will give you 0% financing after you have negotiated your lowest price.
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mygaz
All-Star Author Illinois

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Message Posted: Oct 13, 2013 9:58:03 AM

Always buy a new vehicle that is last years model. Buy it when the new vehicles come out.
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SUNOIL
Champion Author Toledo

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Message Posted: Oct 13, 2013 8:37:21 AM

I still like the cash deal
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Evilmaddog
Champion Author British Columbia

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Message Posted: Oct 13, 2013 8:01:18 AM

car and fuel prices rising thanks to EPA
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FPLREP
Champion Author Virginia

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Message Posted: Oct 13, 2013 7:45:32 AM

"Living on credit is always a bad move." So you are against raising the debt ceiling?
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Nancy&Len
Champion Author Cleveland

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Message Posted: Oct 13, 2013 6:15:37 AM

Have Obama buy it.
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leeac
Champion Author Ohio

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Message Posted: Oct 13, 2013 4:25:44 AM

If I can't buy a car out right or at least put in 60 to 70% up front then I don't need a new car. Living on credit is always a bad move.



[Edited by: leeac at 10/13/2013 4:27:45 AM EST]
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JagXKR
Champion Author British Columbia

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Message Posted: Oct 13, 2013 3:56:09 AM

When I retire I will buy an OLD car and restore it. Only then will I have the time.
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cnygas
Champion Author New York

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Message Posted: Oct 13, 2013 1:49:39 AM

roadrunnerMO, Did you pay cash for your house?
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roadrunnerMO
Champion Author Kansas

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Message Posted: Oct 13, 2013 1:25:16 AM

If you do not have the cash, do not buy it...
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KAR120CSII
Champion Author Oregon

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Message Posted: Oct 13, 2013 1:08:45 AM

They also should have their driver's licenses reevaluated -- too many in their new cars are driving into store windows --

Say it ain't so --
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doeslayersr
Champion Author Illinois

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Message Posted: Oct 13, 2013 1:06:51 AM

Do not spend money you do not have.
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Gabydominguez85
Champion Author Milwaukee

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Message Posted: Oct 13, 2013 12:51:32 AM

Good luck retirees!! I have a long way to go yet!
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Zing20
Champion Author Fresno

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Message Posted: Oct 13, 2013 12:38:54 AM

It depends on price and finances.
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naspa
Champion Author Cleveland

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Message Posted: Oct 13, 2013 12:32:46 AM

OK
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mpg611
Champion Author Cleveland

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Message Posted: Oct 13, 2013 12:21:32 AM

It depends on the financial situation of the retiree, though IMO paying cash is the better option.
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kkimes
Champion Author Illinois

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Message Posted: Oct 13, 2013 12:21:17 AM

Paying cash is usually a good idea but remember we are talking senior citizens here. Most probably won't have that kind of cash laying around to buy new. If they finance for 5 years at a good rate, they might be ahead. Especially if they are invested heavily in stocks which will probably go up at a higher rate than the loan interest. Plus, if they have to cash out some of their IRA or 401k holdings to get that kind of money, they will have to pay a penalty.
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BEGTWO
Champion Author Maryland

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Message Posted: Oct 13, 2013 12:21:07 AM

Whatever suits their budget
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jrschl
Champion Author Louisville

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Message Posted: Oct 13, 2013 12:11:40 AM

Never finance a vehicle.
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txkrb
Champion Author Texas

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Message Posted: Oct 12, 2013 11:34:37 PM

If the interest rate you pay is less than you are earning on investments then you may as well finance
You should still pay an adequate down payment 25% or more
I bought a car last December and financed at 2%
@tekkersmom - normally when you take the 0% option you are giving up a rebate of up to $2,500, not necessarily a good idea

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CivicMA
Champion Author Boston

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Message Posted: Oct 12, 2013 11:21:58 PM

I always pay cash and only buy after burying the previous car.
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amerk73
Champion Author Dallas

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Message Posted: Oct 12, 2013 10:59:26 PM

pay cash
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Tekkersmom57
Champion Author Syracuse

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Message Posted: Oct 12, 2013 10:44:09 PM

I always try to get the zero percent financing, that is the best deal!
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Claruth
Rookie Author Texas

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Message Posted: Oct 12, 2013 10:14:17 PM

Cash would be the best options if you can afford it, but if you do financing shop around for the lowest interest rate.
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Previvor
All-Star Author Virginia

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Message Posted: Oct 12, 2013 10:09:19 PM

Cash
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MichaelJFS
Veteran Author Wisconsin

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Message Posted: Oct 12, 2013 10:06:42 PM

Did a banker write this?

5% is a "good" rate ?
If you borrow at 5%, so you can keep your $aving$ earning 1%, then it is really costing you 5 + 1 = 6%.

No deal.

:o(
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roadrunnin
Champion Author Richmond

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Message Posted: Oct 12, 2013 9:57:04 PM

never gave it much thought. . . low interest seems to be an incentive for financing
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Yooperheart
Champion Author Michigan

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Message Posted: Oct 12, 2013 9:52:00 PM

Depends on the circumstance. I prefer to go the way of ZERO % intrest.
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esq262
Champion Author Asheville

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Message Posted: Oct 12, 2013 9:50:22 PM

Everyone should pay cash.
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montpelier28
Champion Author Vermont

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Message Posted: Oct 12, 2013 9:23:20 PM

cash
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Ken2OD
Champion Author Grand Rapids

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Message Posted: Oct 12, 2013 9:11:59 PM

I would have to check with my financial advisor.
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BigRedVTX
Champion Author Georgia

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Message Posted: Oct 12, 2013 9:09:01 PM

Finance it, that way if you kick it before it's paid, they can't come after you :)
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agrico
Champion Author New Orleans

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Message Posted: Oct 12, 2013 9:05:54 PM

I never borrow money if I have it in the bank earning practically zero interest
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Mr_Bill_W
All-Star Author Virginia

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Message Posted: Oct 12, 2013 7:38:31 PM

It really would depend on the individual and their financial situation...
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beachd8
Champion Author Orange County

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Message Posted: Oct 12, 2013 7:22:15 PM

It depends on the person's circumstances at the time.
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00MrSlate00
Champion Author Illinois

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Message Posted: Oct 12, 2013 7:03:43 PM

Cash is KING!
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windup
Veteran Author Austin

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Message Posted: Oct 12, 2013 7:03:24 PM

4.5% is pretty high compared to what you can earn on savings (say around 0.20%).
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RRBC
Champion Author Victoria

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Message Posted: Oct 12, 2013 7:02:56 PM

Use Credit card with rewards.
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schatzila
Champion Author Los Angeles

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Message Posted: Oct 12, 2013 6:56:48 PM

do what you want.
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djwhit
Champion Author Ohio

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Message Posted: Oct 12, 2013 6:51:40 PM

DRIVE THE CAR I HAVE.............
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gcalleja
Champion Author Miami

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Message Posted: Oct 12, 2013 6:29:24 PM

It depends on the deal.
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madison8359
Champion Author Cleveland

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Message Posted: Oct 12, 2013 6:09:59 PM

Thanks for the information.
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rosa403
Champion Author Indiana

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Message Posted: Oct 12, 2013 5:59:07 PM

paying cash is better
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MrLefty0706
Champion Author Chicago

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Message Posted: Oct 12, 2013 5:52:58 PM

Thanks for posting a good article for baby boomers.
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wrunner
Champion Author Virginia

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Message Posted: Oct 12, 2013 5:33:25 PM

Cash is the way to go.

Used car or truck is the way to go driving.

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wamster
Champion Author Houston

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Message Posted: Oct 12, 2013 5:31:45 PM

Good article.
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race2IT
Champion Author Fort Worth

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Message Posted: Oct 12, 2013 5:26:48 PM

Pay cash and buy used, no interest and no car payments.

[Edited by: race2IT at 10/12/2013 5:28:34 PM EST]
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