Couldn’t agree more. That’s why until I reach the point where I can pay in full in cash (should be soon), I’ll finance the minimum amount possible and pay it off in an accelerated time frame. Sure, you can make some extra $$ investing the money, but I always worry about unexpected illness or job loss or other event where I want cash on hand and minimal debt.
It was my financial guy who pushed the lease, telling me to keep letting the principal grow. And though it hasn’t been long, the growth was worth it. A portion of the investments is liquid, already, for whatever needs. Not sure I understand how spending cash leaves cash available, unless you’re replenishing fast. Then again, the house is paid off, which was a chunk, but resolved that debt.
Being debt averse, we always paid cash for our cars over the years. For our recent purchase, I decided to ask our financial planner (fee-only) and he recommended that I take the 1.9% financing and invest the money. His analysis showed doing so would yield an estimated $7K. That is what we did. It’s hard to say if we really made the $7K. But It was a little annoying taking on car payments for 5 years.
"“We aren’t financing” he looked shocked.’ - We are NOT financing either, and nobody was ever shocked. Frankly, I have no idea what is my credit score at all, not interested, I have no plans on financing anything. We just write a check against our home equity line and pay it off within one year. We have not bought another car for awhile though and we have never bought a brand new car, just did not happen yet in our lives. We never leased either. My car is about 9 years old but it has only some 50k miles on it. I do not feel like changing it for awhile.
Question to those of you who pay cash…does the dealer still do a credit check etc. on you? I noticed at least two posts here that imply they don’t. Our last car was the first time we paid cash. I was looking forward to a lot less paperwork but found that they still wanted us to apply for credit. I figured it was a precaution against our check (it is after all a very large purchase to walk off the lot with). But after reading these posts, I’m wondering if that’s not normal for cash purchases.
Probably depends on whether the “cash” is in the form of a check versus currency. With checks, it appears that they want the buyer to be finance-able if the check does not clear.
Our last car wanted a cashier’s check. Tesla, if you’re paying “cash,” wants an ACH transfer. They might have done a credit pull to see what terms they could entice you with.
Re “shocked looks”: when I first paid cash for a car, years ago, the disappointed look on the salesperson’s face is what convinced me that I had made the right choice. That look didn’t come from disappointment that they couldn’t improve my finances :). Btw, another negative to leasing is that the dealer knows precisely when you will need another car, that you will be coming for at least one visit to him, that you are probably more payment-sensitive than price-sensitive, that you will be under time pressure when the lease is up, etc. Fwiw, anecdotally, I estimate that 25-50% of cars in my neighborhood are leased.
@ClaremontMom I’m in a related business and there is NO reason for them to run your credit if you are paying cash. They were just hoping to talk you into financing.
And once again I am amazed at the CC crowd. Less than 15% of the general population pays cash for a car but judging by this thread, not only did everyone on CC send their kid to UG for free so they could pay for med school, but they all drive 20 year old cars that they pay cash for.
You guys are missing out on some amazing new technology. The new frontal crash avoidance systems, rear view and four way cameras, blind spot warnings, etc… are worth their weight in gold. And there is nothing inherently wrong or irresponsible about leasing. If you aren’t going to keep a car more than 4 years it’s fairly simple math to figure out whether buying or leasing makes more economic sense. There are some incredibly attractive and subsidized leases available today that blow away the financing (or cash paying) alternatives.
That’s what I was thinking…but who carries that amount of currency?! 
I don’t think so…they didn’t seem to care when we said “cash”, and never tried to sell us financing. (Tried to sell us all sorts of other extras, yes, but not financing).
@gluttonforstress , if you’re amazed at this crowd, head over to Bogleheads.org and have your head explode :))
Btw, I agree about safety features. My kids are in new/newish Volvos, not to spoil them, but for my ability to sleep well.
It’s precisely because we pay cash for cars, drive them for 17- 20 years (barely putting on any mileage because of a 10 minute commute to work), and pursue merit aid to help finance college that we can afford to retire early, pay off our mortgage, have plenty of funds for our son to graduate from college loan free, and have money left to help him pay for grad school if needed. Cars are terrible investments.
I am surprised to hear about some of you owning cars for almost 20 years or keeping a car at 200,000 miles. You must really maintain your cars well.
My 2003 model car is at 115,000 miles and I am wondering how long it will last and what to do with it. The last two years I have been pouring money into repairs and they have been expensive. Should I trade it in and buy a used car? Should I lease? I have always bought cars with full payment in cash but at this time I am not able to do that.
I am thinking to get a used car from Carmax and use the proceeds from the sale of my car towards the downpayment of the new car. In the county where I live we pay car tax every year so I don’t want to get a brand new car.
Our first car purchase was a very old VW beetle for cash. After that car wore out, it was a very long time till we could afford to pay cash for a car again.
We always believed cars to be terrible investments and always bought the least expensive, most basic model that would serve our needs…
But then somehow we ended up buying a used, extremely low mileage fancy luxury car and it has pretty much changed our lives. Who knew what a difference comfort can make? We think we should have done this years ago. It’s an investment in preserving our old bones 
I am always going to have a maw-maw car from here on out, as long as I can afford one.
All these people of privilege paying cash. No wonder there is so much talk of income inequality.
Oh, we paid cash for our last 5 vehicles. Usually try to keep for 10 years. Did change out one car at two years. Due to wife’s height and setting for her seat, she had a big blind spot.
@alh, we don’t have a mechanic that we trust, so had always shied away from purchasing used, but recently discovered that there are good values to be had in certified pre-owned cars. You pay more than you would purchasing privately, but the warranty makes for reassurance that you’re not buying a nightmare.
^^Lucky for us, there is a wonderful shop that specializes in these cars. When we took it in for an oil change, the lot was full of ancient vehicles. The fact this shop exists impacted our decision.
It is our first used car since the VW, which my husband kept working himself. After that, we decided his time was better spent on his real job.
Not saying that we are not privileged, but as I tried to explain (unsuccessfully) to my ex BIL, if you make the car payments to your savings account before you buy the car, you will get the car 16% cheaper (this was when interest rates were higher).
sometimes though you have to have money to save money, as my mother used to always say as she bought my young kids clothes for the following year at the after season sales.
@ClaremontMom - we always pay with a check and they have never run a credit check. My H is very particular about unneccsary pulling of our credit.
We pay cash for our cars. We mainly buy new but have on occasion bought used if we knew it had been well maintained. For our last car purchase I searched for a low mileage used car but I didn’t find many in my area and the ones I found weren’t any great deal. We tend to keep our cars about 7 yrs. Two of our children are driving cars we passed along to them.
We are having the buy a car discussion in our house this week. My S has a 13 yr old car with over 150000 miles. He has had some larger repairs the last couple of years and is talking about wanting a different car. We think it’s worth fixing his present car but we also understand the desire for a newer car. Unfortunately he wants a used BMW. We are advising against it. I have owned and loved a BMW but the cost of ownership is high. All we can do is suggest he do his researched before making any decision. He has no interest in a practical low cost vehicle.
We paid cash for our last car. It was $845. The two before that were financed.
You all are some rich people.