Everybody knows "buy used car in cash" is the generally accepted, financially sound decision, but let's assume one wants a nice, fresh, brand-new car.
- Car is $30,000. All-in (inclusive of taxes, fees, etc.)
- You have $30,000 unencumbered cash on hand.
A.) Buying cash, you'll get a $2,500 incentive; You'll only shell out $27,500 total.
B.) Financing for 84-months 0.9% means you'll lose $1,100 on interest and you don't get any cash incentive/discounts.
C.) Lease for 60-months 0.9% means you pay significantly minimal monthly $ for the car. You'll lose some money on interest, get limited mileage allowance, pay some money at the end of the lease and not get anything afterwards.
Most people will say "if you can't pay cash, you can't afford the car." But can't one make that $27k EARN more than 0.9% (and hopefully more than the cash incentive) over the course of 5 or 7 years when you opted to finance or lease the car, while driving a new car and having minimal repair/maintenance costs?