Hi, I have a family with three young kids and we are need of a larger car with three rows for family travel. I am open to buying a used car vs. new to save some dollars, but it is likely a car that we will keep for hopefully 8-10 years. I have the cash available to buy it outright but I am not sure if that is the best move vs. taking on a low interest car loan (my last car loan was 2%) and keeping more of my cash in investments.
Using your fun analogy, Amanda and Amy both purchase a $50K car.
Amy purchases the entire thing in cash and now has $0 in index funds over the next 6 years but also has no car payments.
Amanda puts down 20% ($10k) and finances 80% ($40K) over 72 months @ 2% APR. She has $40k to invest in index funds over the next 6yrs but also has taken on debt and has a monthly car payment for the next 6 years.
Who made the better move?