Quote:
Originally Posted by NavNurs
If my money market account pays 5.1% and I can get a loan for 3.5%; do I pay cash for the car or do I finance as much as possible? This is for a three year term.  |
Clearly, you finance as much as possible, unless you have monthly cash flow issues coming up (and if you do, don't buy this car). If you do not have an emergency fund for short-term emergencies then financing makes even more sense.
Don't make large down payments unless you have at least 6 months of your house payment/rent, other loans, and all other necessary expenses socked away.
It helps to keep that money at ~4-5% too.
I can get a loan from USAA for 4.94% or Penfed for 5.29% -- these are traditionally some of the cheapest places. Where are you getting 3.5%? That's almost free money.