Loan or cash: which is best to finance a car?

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There are pros and cons to both arguments, whether to pay cash or take a loan to buy a car FMTNews FMTOhsem

It is said the single monthly commitment that can derail a plan to build wealth is paying a car loan.

This happens if the car depreciates in value faster, let’s say 50% in two years, and it was financed with a loan of 90% or more of the value at a loan tenure of nine years.The value of a car falls over time. It does not matter if it was paid for in cash or with a car loan. So, to be prudent, consider buying a lower priced car that serves the purpose, or not to buy one at all. A car is a financial liability and its value depreciates over time.

If the effective interest rate of the car loan is 4% per year and interest expense is RM4,000 , that would be RM1,400 in net interest income.This is wiser to finance a car purchase with a loan if you are a good investor who can achieve an investment return greater than the effective interest rate of the car loan.

 

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The interest so great for car hire purchase

Loan for sure. Where got so much to buy a unvalue assets

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