if you have a revolving equity line, pay it off with your equity line. You then have your onhand/ready cash to pay the equity line with and you can write off the interest each year.

-T

 

Paying cash is always easier and end up saving money. Unless 0% financing, otherwise, why let someone to earn interest? Plus, paying cash so the car totally belongs to you and then you don't have to buy full coverage in your insurance.

 

Thanks for all the replies. My idea was to finance it, then pay it off right away in one or two payments so I pay negligible interest.

I also have a 0% balance transfer offer on my credit card for about $15K or so for one year. I can request a blank check from them and use that as cash.

 

Ask the finance people at Infiniti to run some scenarios based on different loan amounts and payment periods. They can tell you exactly how much interest you will pay over the life of the loan based on each scenario. Off the top of my head I think the total interest on $30k over 3 years was around $890. It may seem like a ton of money at first but when you consider it is less than $1 per day for the loan it really isn't bad at all.

However, I will admit that I opted for the shorter loan period, 3 years at 1.9% instead of 5 years at 2.9%, becasue I wanted to pay less total interest and get it over with sooner. You seem to be leaning in this same direction, just more extremely. The loan officer at Infiniti reminded me that my monthly payment was going to be high (about $860 instead of $560 or so) but it was still a better option for me than going all cash.

 

If you can afford the payments, financing at 0%-2.9% may be better as you can drop $35K into a mutual fund earning 10% or more, and be better off in the long run.

 

Paying cash is not a good negotiate tactic anymore. Dealers (IFS) love to finance the car for you because the finance adviser and the dealer receive commission from the bank. The lower your credit score (to a certain point), the higher rates the dealers can charge you.
Like other people are saying, see what is your oppertunity cost of the money that you would have investing in. Take out your finance calculator and calculate your net present value of the investment that you are going to make with the "financed money". You can make your decision then.

 

Thats great advice, I have felt that way for a long time, plus, my credit union offers "share secured" loans, I borrowed for a home improvement last year, and it was only 3 or 4%, and that way, you have to put the money back!

 

Why pay it off in one OR TWO payments? Why not just one? And the idea of using a credit card, even if it's 0% for a year, for payment towards a car is just plain scary.