Not Logged In Log In   Sign Up   Points Leaders
Follow Us    9:37 PM

Message Forum - Read Message

Category: Daily News Article Discussions > Topics Add to favorite topics  
Author Topic: Should retirees finance a car or pay cash? Back to Topics
mastermariner

Champion Author
Texas

Posts:12,718
Points:1,073,895
Joined:Jun 2011
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
Profile Pic
oldmack
Champion Author Riverside

Posts:2,021
Points:203,600
Joined:Jan 2013
Message Posted: Oct 14, 2013 3:15:28 AM

ok
Profile Pic
danindenver
Champion Author Denver

Posts:7,556
Points:1,818,730
Joined:May 2005
Message Posted: Oct 13, 2013 10:06:11 PM

This is a no-brainer.

Always pay cash.
Period.


Profile Pic
BBopp
Champion Author Dayton

Posts:9,141
Points:2,466,470
Joined:Dec 2006
Message Posted: Oct 13, 2013 5:06:00 PM

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

Posts:5,133
Points:249,235
Joined:Dec 2010
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.
Profile Pic
mygaz
All-Star Author Illinois

Posts:994
Points:836,115
Joined:Sep 2005
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.
Profile Pic
SUNOIL
Champion Author Toledo

Posts:7,822
Points:2,512,310
Joined:Jul 2007
Message Posted: Oct 13, 2013 8:37:21 AM

I still like the cash deal
Profile Pic
Evilmaddog
Champion Author British Columbia

Posts:5,908
Points:1,555,815
Joined:Aug 2010
Message Posted: Oct 13, 2013 8:01:18 AM

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

Posts:11,261
Points:3,045,985
Joined:Oct 2005
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?
Profile Pic
Nancy&Len
Champion Author Cleveland

Posts:4,446
Points:2,508,125
Joined:Sep 2004
Message Posted: Oct 13, 2013 6:15:37 AM

Have Obama buy it.
Profile Pic
leeac
Champion Author Ohio

Posts:4,200
Points:1,034,290
Joined:Jan 2012
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]
Profile Pic
JagXKR
Champion Author British Columbia

Posts:5,676
Points:1,687,910
Joined:Dec 2009
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.
Profile Pic
cnygas
Champion Author New York

Posts:1,145
Points:253,135
Joined:Sep 2013
Message Posted: Oct 13, 2013 1:49:39 AM

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

Posts:11,007
Points:2,299,965
Joined:Jul 2008
Message Posted: Oct 13, 2013 1:25:16 AM

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

Posts:5,519
Points:1,114,625
Joined:Apr 2010
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 --
Profile Pic
doeslayersr
Champion Author Illinois

Posts:12,270
Points:1,472,530
Joined:Dec 2010
Message Posted: Oct 13, 2013 1:06:51 AM

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

Posts:1,056
Points:917,530
Joined:Mar 2011
Message Posted: Oct 13, 2013 12:51:32 AM

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

Posts:1,089
Points:678,020
Joined:Nov 2012
Message Posted: Oct 13, 2013 12:38:54 AM

It depends on price and finances.
Profile Pic
naspa
Champion Author Cleveland

Posts:3,970
Points:952,800
Joined:Jan 2012
Message Posted: Oct 13, 2013 12:32:46 AM

OK
Profile Pic
mpg611
Champion Author Cleveland

Posts:4,937
Points:1,169,970
Joined:Apr 2011
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.
Profile Pic
kkimes
Champion Author Illinois

Posts:2,511
Points:2,037,145
Joined:Sep 2005
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.
Profile Pic
BEGTWO
Champion Author Maryland

Posts:4,128
Points:1,281,620
Joined:Sep 2010
Message Posted: Oct 13, 2013 12:21:07 AM

Whatever suits their budget
Profile Pic
jrschl
Champion Author Louisville

Posts:5,554
Points:1,282,040
Joined:Jun 2011
Message Posted: Oct 13, 2013 12:11:40 AM

Never finance a vehicle.
Profile Pic
txkrb
Champion Author Texas

Posts:2,589
Points:1,171,460
Joined:May 2011
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

Profile Pic
CivicMA
Champion Author Boston

Posts:4,527
Points:1,133,500
Joined:Jun 2011
Message Posted: Oct 12, 2013 11:21:58 PM

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

Posts:9,599
Points:2,221,170
Joined:Oct 2008
Message Posted: Oct 12, 2013 10:59:26 PM

pay cash
Profile Pic
Tekkersmom57
Champion Author Syracuse

Posts:4,439
Points:1,295,440
Joined:May 2010
Message Posted: Oct 12, 2013 10:44:09 PM

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

Posts:65
Points:8,745
Joined:Oct 2013
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.
Profile Pic
Previvor
All-Star Author Virginia

Posts:534
Points:189,930
Joined:Jan 2013
Message Posted: Oct 12, 2013 10:09:19 PM

Cash
Profile Pic
MichaelJFS
Veteran Author Wisconsin

Posts:342
Points:212,855
Joined:Sep 2013
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(
Profile Pic
roadrunnin
Champion Author Richmond

Posts:2,138
Points:815,880
Joined:May 2008
Message Posted: Oct 12, 2013 9:57:04 PM

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

Posts:6,460
Points:1,127,900
Joined:Feb 2010
Message Posted: Oct 12, 2013 9:52:00 PM

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

Posts:5,302
Points:1,239,905
Joined:Jul 2011
Message Posted: Oct 12, 2013 9:50:22 PM

Everyone should pay cash.
Profile Pic
montpelier28
Champion Author Vermont

Posts:3,108
Points:1,367,525
Joined:Apr 2010
Message Posted: Oct 12, 2013 9:23:20 PM

cash
Profile Pic
Ken2OD
Champion Author Grand Rapids

Posts:11,633
Points:2,569,495
Joined:Dec 2005
Message Posted: Oct 12, 2013 9:11:59 PM

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

Posts:1,651
Points:665,535
Joined:Jun 2011
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 :)
Profile Pic
agrico
Champion Author New Orleans

Posts:1,676
Points:1,029,235
Joined:Dec 2008
Message Posted: Oct 12, 2013 9:05:54 PM

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

Posts:657
Points:746,865
Joined:Feb 2012
Message Posted: Oct 12, 2013 7:38:31 PM

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

Posts:1,285
Points:220,895
Joined:Oct 2012
Message Posted: Oct 12, 2013 7:22:15 PM

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

Posts:2,743
Points:667,220
Joined:Feb 2013
Message Posted: Oct 12, 2013 7:03:43 PM

Cash is KING!
Profile Pic
windup
Veteran Author Austin

Posts:397
Points:1,233,745
Joined:Jul 2010
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%).
Profile Pic
RRBC
Champion Author Victoria

Posts:5,143
Points:1,085,820
Joined:Oct 2011
Message Posted: Oct 12, 2013 7:02:56 PM

Use Credit card with rewards.
Profile Pic
schatzila
Champion Author Los Angeles

Posts:5,986
Points:1,226,545
Joined:Jun 2010
Message Posted: Oct 12, 2013 6:56:48 PM

do what you want.
Profile Pic
djwhit
Champion Author Ohio

Posts:5,325
Points:1,794,355
Joined:Jul 2009
Message Posted: Oct 12, 2013 6:51:40 PM

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

Posts:2,943
Points:1,118,170
Joined:May 2011
Message Posted: Oct 12, 2013 6:29:24 PM

It depends on the deal.
Profile Pic
madison8359
Champion Author Cleveland

Posts:15,535
Points:2,192,580
Joined:Apr 2008
Message Posted: Oct 12, 2013 6:09:59 PM

Thanks for the information.
Profile Pic
rosa403
Champion Author Indiana

Posts:1,247
Points:374,915
Joined:Apr 2013
Message Posted: Oct 12, 2013 5:59:07 PM

paying cash is better
Profile Pic
MrLefty0706
Champion Author Chicago

Posts:3,974
Points:948,535
Joined:Apr 2012
Message Posted: Oct 12, 2013 5:52:58 PM

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

Posts:7,097
Points:1,736,590
Joined:Dec 2009
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.

Profile Pic
wamster
Champion Author Houston

Posts:7,056
Points:1,159,260
Joined:May 2007
Message Posted: Oct 12, 2013 5:31:45 PM

Good article.
Profile Pic
race2IT
Champion Author Fort Worth

Posts:2,510
Points:1,155,430
Joined:Oct 2008
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]
Post a reply Back to Topics