Buying a car with a loan or a lease is wealth destroying. I don't care whether most people do it or not. If you are smart enough to be reading Hacker News you are smart enough to know that you don't borrow to purchase a depreciating asset. If you don't have the cash to buy a new car, buy used. Buy a beater if you have to. No wealthy or financially savvy person is impressed because you leased a nice car.
> you are smart enough to know that you don't borrow to purchase a depreciating asset. If you don't have the cash to buy a new car, buy used.
This is nonsense. If you can borrow money for less than you can earn, you should borrow. I know people who, buying a new car, had saved cash to do so. But they got 0% financing. So even sticking that money in a CD made them more cash.
What you mean to say is "if you do not realize that you are paying a lot of money for the use of a new car, not for an asset"
>> If you can borrow money for less than you can earn, you should borrow.
You are right, but using a car loan to do this makes no sense. You can always get a lower interest rate loan against real estate or margin loans against stocks. Show me any real world lender that won't loan you money at cheaper rates against those assets than they will against a car.
Sure, people get 0% loans on cars, but if you think they that doesn't mean they paid more for the car than they could have with cash up front.. well I can't help you.
You are trying to make an economic argument and I don't find it very convincing. But in the real world every time have I seen this happen it is to rationalize overspending.
> if you think they that doesn't mean they paid more for the car than they could have with cash up front.
They certainly don't pay more for the car than they do if they paid with cash up front. The price of the car is negotiated, then financing.
Maybe, if the dealerships didn't offer 0%, they would offer lower prices on cars. And maybe if stores didn't take credit cards they would offer lower prices. But once they decide to do it, there's no reason not to take them up on it.
But they probably wouldn't raise the rates. At 0% APR, they are still making a bet that you will miss a payment and suddenly owe back interest. At interest rates today, not many people have to miss a payment to cover all the others.
I'm sorry you don't find the way the world is working right now to be convincing. But I know people who are ready to pull out their checkbook after negotiating, and then are offered 0% APR. So they took it.
