Buying a used car: 0-interest loan over 15 months, or buy in cash

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ThisJustIn
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Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by ThisJustIn » Sat Jul 13, 2019 6:50 pm

I'm currently using a leased car, and I'm going to return it after its 3 year due in December.
Now, I'm planning to buy a 3-4 year old car around November / December, with a budget of somewhere between 12K-15K (Toyota / Honda).

First things first, I can buy this car in cash in December, I have enough cash in online savings accounts.
But I looked for 0-interest loan options, and I went to Bank of America today (I'm a Platinum Honors member, probably the highest loyalty program). Lady at Bofa said the only option for 0-interest loan is to get a new BankAmericard (https://www.bankofamerica.com/credit-ca ... edit-card/) (I already have one which I opened in 2011, but this promo is new, and the lady said I can have two of the same card). This card has "0% Intro APR for 15 billing cycles for purchases, and for any balance transfers made in the first 60 days.". So, I can get this card around November, and then buy the car with some 2K-3K downpayment, plus Bofa loan, and I pay the balance through this new card over 15 months, with 0-interest. That way, I can use my money (that I would use to pay in cash) and invest it over time instead.

I'm a thrifty investor, and although I can purchase the car full in cash, I started leaning towards this 0-interest loan method through the new BankAmerica card. However, After those 15 months, there is no use of that card for me, because I already have another copy. So, most likely, I will cancel the card after the car is paid over 15 months (which may hit my credit score for a while, I'm open to suggestions on whether this is the case.).

Does anyone have any suggestions as to whether to get BankAmericard and paying the car with 0-interest over 15 months, vs. buying full in cash?

buhlaxtus
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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by buhlaxtus » Sat Jul 13, 2019 6:58 pm

I hate playing these games so I would just pay cash and be done. You can get a few hundred dollars by playing games with the 0% card, is it worth it to you? Of course you have to do it perfectly right and avoid interest/finance charges or the gains are all out the window.

Trader Joe
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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by Trader Joe » Sat Jul 13, 2019 7:00 pm

ThisJustIn wrote:
Sat Jul 13, 2019 6:50 pm
I'm currently using a leased car, and I'm going to return it after its 3 year due in December.
Now, I'm planning to buy a 3-4 year old car around November / December, with a budget of somewhere between 12K-15K (Toyota / Honda).

First things first, I can buy this car in cash in December, I have enough cash in online savings accounts.
But I looked for 0-interest loan options, and I went to Bank of America today (I'm a Platinum Honors member, probably the highest loyalty program). Lady at Bofa said the only option for 0-interest loan is to get a new BankAmericard (https://www.bankofamerica.com/credit-ca ... edit-card/) (I already have one which I opened in 2011, but this promo is new, and the lady said I can have two of the same card). This card has "0% Intro APR for 15 billing cycles for purchases, and for any balance transfers made in the first 60 days.". So, I can get this card around November, and then buy the car with some 2K-3K downpayment, plus Bofa loan, and I pay the balance through this new card over 15 months, with 0-interest. That way, I can use my money (that I would use to pay in cash) and invest it over time instead.

I'm a thrifty investor, and although I can purchase the car full in cash, I started leaning towards this 0-interest loan method through the new BankAmerica card. However, After those 15 months, there is no use of that card for me, because I already have another copy. So, most likely, I will cancel the card after the car is paid over 15 months (which may hit my credit score for a while, I'm open to suggestions on whether this is the case.).

Does anyone have any suggestions as to whether to get BankAmericard and paying the car with 0-interest over 15 months, vs. buying full in cash?
I only pay cash for my vehicles. Best of luck.

02nz
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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by 02nz » Sat Jul 13, 2019 7:11 pm

I'm a bit confused. You can open the card, and for the promo period, purchases and balance transfers will be at 0% (but make sure they don't charge a percentage fee on the balance transfers!). You may be able to put 2-3K of the purchase on the credit card, but it probably will not be possible to put the rest of it on the credit card. Or are you talking about a separate auto loan at 0%? Or do you mean that you'd use the card as a zero-interest float for other expenses?

harrychan
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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by harrychan » Sat Jul 13, 2019 7:17 pm

Just pay in cash.
This is not legal or certified financial advice but you know that already.

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ThisJustIn
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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by ThisJustIn » Sat Jul 13, 2019 7:25 pm

02nz wrote:
Sat Jul 13, 2019 7:11 pm
I'm a bit confused. You can open the card, and for the promo period, purchases and balance transfers will be at 0% (but make sure they don't charge a percentage fee on the balance transfers!). You may be able to put 2-3K of the purchase on the credit card, but it probably will not be possible to put the rest of it on the credit card. Or are you talking about a separate auto loan at 0%? Or do you mean that you'd use the card as a zero-interest float for other expenses?
$0 balance transfer fee for the first 60 days your account is open. That is why the plan is to buy the car right after getting the card, and adding the remaining balance after downpayment on the card. The lady said: Let's say the car is 15K, downpayment is 3K, you can put 12K on the card. It is not an auto loan, there is no 0-interest auto loan by Bofa. This is just mimicking 0-interest loan through BankAmerica card.

mortfree
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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by mortfree » Sat Jul 13, 2019 7:29 pm

Some dealers cap the amount you can put on a credit card.

Will that be an issue for you?

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ThisJustIn
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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by ThisJustIn » Sat Jul 13, 2019 7:31 pm

mortfree wrote:
Sat Jul 13, 2019 7:29 pm
Some dealers cap the amount you can put on a credit card.

Will that be an issue for you?
This, I will have to check with the dealers.

Blake7
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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by Blake7 » Sat Jul 13, 2019 7:35 pm

buhlaxtus wrote:
Sat Jul 13, 2019 6:58 pm
I hate playing these games so I would just pay cash and be done. You can get a few hundred dollars by playing games with the 0% card, is it worth it to you? Of course you have to do it perfectly right and avoid interest/finance charges or the gains are all out the window.
+1

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ThisJustIn
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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by ThisJustIn » Sat Jul 13, 2019 7:39 pm

buhlaxtus wrote:
Sat Jul 13, 2019 6:58 pm
I hate playing these games so I would just pay cash and be done. You can get a few hundred dollars by playing games with the 0% card, is it worth it to you? Of course you have to do it perfectly right and avoid interest/finance charges or the gains are all out the window.
This is not a game, it is a fair method.
15K invested in index funds with average 8% returns will return 1200. Neither a few hundred dollars, nor 1200 is low.
I'm a thrifty investor, as I noted in the original post.

indexfund56
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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by indexfund56 » Sat Jul 13, 2019 7:57 pm

ThisJustIn wrote:
Sat Jul 13, 2019 7:39 pm
buhlaxtus wrote:
Sat Jul 13, 2019 6:58 pm
I hate playing these games so I would just pay cash and be done. You can get a few hundred dollars by playing games with the 0% card, is it worth it to you? Of course you have to do it perfectly right and avoid interest/finance charges or the gains are all out the window.
This is not a game, it is a fair method.
15K invested in index funds with average 8% returns will return 1200. Neither a few hundred dollars, nor 1200 is low.
I'm a thrifty investor, as I noted in the original post.
And if the market goes down, it will not return 8 percent.

If you have the money, just pay cash.

HEDGEFUNDIE
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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by HEDGEFUNDIE » Sat Jul 13, 2019 7:58 pm

I just did this with another bank’s credit card. Bought a new car with dealership loan at high interest, paid it off immediately with a 0% credit card balance transfer. Put that $25k to work in the markets and earned ~10%.

chessknt
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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by chessknt » Sat Jul 13, 2019 8:00 pm

Take the free loan. I think people on this forum vastly overestimate the complexity of scheduling a monthly payment. As long as your monthly cash flow is not tight a 0% loan is a no brainer.

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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by whodidntante » Sat Jul 13, 2019 8:10 pm

HEDGEFUNDIE wrote:
Sat Jul 13, 2019 7:58 pm
I just did this with another bank’s credit card. Bought a new car with dealership loan at high interest, paid it off immediately with a 0% credit card balance transfer. Put that $25k to work in the markets and earned ~10%.
Sounds like an excellent adventure.

buhlaxtus
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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by buhlaxtus » Sat Jul 13, 2019 8:14 pm

Some people are willing to spend hours of their lives and take extra risk by opening and maintaining an extra account to get a few hundred dollars. I am not. It isn't a wrong idea but it is in no way a "no brainer".

Putting it in stocks expecting to get 8-10% over that time frame is not smart however. Glad it worked out for others! Don't count on it next time.

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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by HEDGEFUNDIE » Sat Jul 13, 2019 8:15 pm

buhlaxtus wrote:
Sat Jul 13, 2019 8:14 pm
Some people are willing to spend hours of their lives and take extra risk by opening and maintaining an extra account to get a few hundred dollars. I am not. It isn't a wrong idea but it is in no way a "no brainer".

Putting it in stocks expecting to get 8-10% over that time frame is not smart however. Glad it worked out for others! Don't count on it next time.
The long term CAGR on the S&P 500 is 10%.

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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by ThisJustIn » Sat Jul 13, 2019 9:15 pm

indexfund56 wrote:
Sat Jul 13, 2019 7:57 pm
ThisJustIn wrote:
Sat Jul 13, 2019 7:39 pm
buhlaxtus wrote:
Sat Jul 13, 2019 6:58 pm
I hate playing these games so I would just pay cash and be done. You can get a few hundred dollars by playing games with the 0% card, is it worth it to you? Of course you have to do it perfectly right and avoid interest/finance charges or the gains are all out the window.
This is not a game, it is a fair method.
15K invested in index funds with average 8% returns will return 1200. Neither a few hundred dollars, nor 1200 is low.
I'm a thrifty investor, as I noted in the original post.
And if the market goes down, it will not return 8 percent.

If you have the money, just pay cash.
8% returns is on average long term. And, time in the market beats timing in the market. I thought all Bogleheads already know all of this.

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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by El Greco » Sat Jul 13, 2019 10:42 pm

chessknt wrote:
Sat Jul 13, 2019 8:00 pm
Take the free loan. I think people on this forum vastly overestimate the complexity of scheduling a monthly payment. As long as your monthly cash flow is not tight a 0% loan is a no brainer.
^^^This

Yeah, I don't get it. I don't understand why so many people on this forum have a problem with free money. I currently have a 63 month 0% loan on my new Mazda. Even if I don't make money on keeping the lump sum invested, I still come out ahead because of inflation and paying off the loan as time goes by with cheaper dollars. And setting up autopay for the loan amount is a piece of cake.

Flyer24
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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by Flyer24 » Sat Jul 13, 2019 11:34 pm

ThisJustIn wrote:
Sat Jul 13, 2019 7:39 pm
buhlaxtus wrote:
Sat Jul 13, 2019 6:58 pm
I hate playing these games so I would just pay cash and be done. You can get a few hundred dollars by playing games with the 0% card, is it worth it to you? Of course you have to do it perfectly right and avoid interest/finance charges or the gains are all out the window.
This is not a game, it is a fair method.
15K invested in index funds with average 8% returns will return 1200. Neither a few hundred dollars, nor 1200 is low.
I'm a thrifty investor, as I noted in the original post.
Bad plan. For short term investment, you would want something like a CD. You are not going to get more than 3%. You don’t put a short term investment into the stock market.

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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by ThisJustIn » Sat Jul 13, 2019 11:42 pm

Flyer24 wrote:
Sat Jul 13, 2019 11:34 pm
ThisJustIn wrote:
Sat Jul 13, 2019 7:39 pm
buhlaxtus wrote:
Sat Jul 13, 2019 6:58 pm
I hate playing these games so I would just pay cash and be done. You can get a few hundred dollars by playing games with the 0% card, is it worth it to you? Of course you have to do it perfectly right and avoid interest/finance charges or the gains are all out the window.
This is not a game, it is a fair method.
15K invested in index funds with average 8% returns will return 1200. Neither a few hundred dollars, nor 1200 is low.
I'm a thrifty investor, as I noted in the original post.
Bad plan. For short term investment, you would want something like a CD. You are not going to get more than 3%. You don’t put a short term investment into the stock market.
Wow. Am I in the correct forum? Why would I invest 15K short-term? I'm investing my own 15K, that I'm supposed to use for car purchase, long-term, and I'm using bank card to pay the car's 15K over 15 months, where I can easily pay this via my paychecks.

HEDGEFUNDIE
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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by HEDGEFUNDIE » Sun Jul 14, 2019 1:08 am

Flyer24 wrote:
Sat Jul 13, 2019 11:34 pm
ThisJustIn wrote:
Sat Jul 13, 2019 7:39 pm
buhlaxtus wrote:
Sat Jul 13, 2019 6:58 pm
I hate playing these games so I would just pay cash and be done. You can get a few hundred dollars by playing games with the 0% card, is it worth it to you? Of course you have to do it perfectly right and avoid interest/finance charges or the gains are all out the window.
This is not a game, it is a fair method.
15K invested in index funds with average 8% returns will return 1200. Neither a few hundred dollars, nor 1200 is low.
I'm a thrifty investor, as I noted in the original post.
Bad plan. For short term investment, you would want something like a CD. You are not going to get more than 3%. You don’t put a short term investment into the stock market.
The opportunity cost of spending this cash would be investments in OP’s taxable account, which would be the market return.

onourway
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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by onourway » Sun Jul 14, 2019 6:36 am

ThisJustIn wrote:
Sat Jul 13, 2019 11:42 pm
Flyer24 wrote:
Sat Jul 13, 2019 11:34 pm
ThisJustIn wrote:
Sat Jul 13, 2019 7:39 pm
buhlaxtus wrote:
Sat Jul 13, 2019 6:58 pm
I hate playing these games so I would just pay cash and be done. You can get a few hundred dollars by playing games with the 0% card, is it worth it to you? Of course you have to do it perfectly right and avoid interest/finance charges or the gains are all out the window.
This is not a game, it is a fair method.
15K invested in index funds with average 8% returns will return 1200. Neither a few hundred dollars, nor 1200 is low.
I'm a thrifty investor, as I noted in the original post.
Bad plan. For short term investment, you would want something like a CD. You are not going to get more than 3%. You don’t put a short term investment into the stock market.
Wow. Am I in the correct forum? Why would I invest 15K short-term? I'm investing my own 15K, that I'm supposed to use for car purchase, long-term, and I'm using bank card to pay the car's 15K over 15 months, where I can easily pay this via my paychecks.
Or you can replace the money you’ve used to pay for the vehicle from your paycheck, meaning that money is only out of the market for the short term. Thus the opportunity cost is equal to the term of the loan, and could easily be negative if in the market.

bgf
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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by bgf » Sun Jul 14, 2019 6:48 am

ThisJustIn wrote:
Sat Jul 13, 2019 7:31 pm
mortfree wrote:
Sat Jul 13, 2019 7:29 pm
Some dealers cap the amount you can put on a credit card.

Will that be an issue for you?
This, I will have to check with the dealers.
when i bought my car a couple years ago, i asked how much i could put on my card. i think they let me do $2000 or $2500. This was a subaru dealership. A porsche dealership or other high end place might be different. i imagine any high volume dealership is going to be averse to paying the cc transaction fee when their profits per vehicle are so low to begin with.
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"

indexfund56
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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by indexfund56 » Sun Jul 14, 2019 7:22 am

ThisJustIn wrote:
Sat Jul 13, 2019 9:15 pm
indexfund56 wrote:
Sat Jul 13, 2019 7:57 pm
ThisJustIn wrote:
Sat Jul 13, 2019 7:39 pm
buhlaxtus wrote:
Sat Jul 13, 2019 6:58 pm
I hate playing these games so I would just pay cash and be done. You can get a few hundred dollars by playing games with the 0% card, is it worth it to you? Of course you have to do it perfectly right and avoid interest/finance charges or the gains are all out the window.
This is not a game, it is a fair method.
15K invested in index funds with average 8% returns will return 1200. Neither a few hundred dollars, nor 1200 is low.
I'm a thrifty investor, as I noted in the original post.
And if the market goes down, it will not return 8 percent.

If you have the money, just pay cash.
8% returns is on average long term. And, time in the market beats timing in the market. I thought all Bogleheads already know all of this.
Why are you asking the question if you already have your answer?

nyjetfan
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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by nyjetfan » Sun Jul 14, 2019 7:34 am

I view this as a lump sum vs dollar cost averaging. Due to the 0%/zero transfer fee, at the end of 15 months he will have a paid for car ($15k) and $15k invested (assuming for long term).

Option 1 - Pay cash for the car and dollar cost average into the investment at $1k/month for 15 months


Option 2 - $15k into the account day 1 and pay off the car with the $1k/month

Broad stroke comparisons:
- Rising markets, option 2 will be the better alternative.
- Falling markets, most likely option 1 will be better of the 2.
- If markets are flat, I'd say they are about even.

So which is more palatable to you OP, as end of the day you should end up in similar place and of course which is "better" depends upon what the markets do over the 15 months which my crystal ball is telling me to ask again in 15 months :sharebeer

scoreboard
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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by scoreboard » Sun Jul 14, 2019 7:53 am

FWIW Nissan would only let me charge 10K of a car to my personal credit card. Finance woman said that was the max this particular dealership allowed.

Fishing50
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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by Fishing50 » Sun Jul 14, 2019 8:21 am

We have $24K on a 0% promotion rate. It cost $37 in cash advance interest from a convenience check payment that was later transferred to the promotional rate, but now we have a year to pay the loan by reducing taxable investments.

We saved about $360 in capital gains taxes by not selling equities. Oh wait, we just received dividend payments from that account so it’s more savings.
It's perfectly legal, go ask the IRS, they'll say the same thing. I actually feel stupid telling you this, I'm sure you would've investigated the matter yourself. Andy Dufresne

Flyer24
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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by Flyer24 » Sun Jul 14, 2019 8:28 am

ThisJustIn wrote:
Sat Jul 13, 2019 11:42 pm
Flyer24 wrote:
Sat Jul 13, 2019 11:34 pm
ThisJustIn wrote:
Sat Jul 13, 2019 7:39 pm
buhlaxtus wrote:
Sat Jul 13, 2019 6:58 pm
I hate playing these games so I would just pay cash and be done. You can get a few hundred dollars by playing games with the 0% card, is it worth it to you? Of course you have to do it perfectly right and avoid interest/finance charges or the gains are all out the window.
This is not a game, it is a fair method.
15K invested in index funds with average 8% returns will return 1200. Neither a few hundred dollars, nor 1200 is low.
I'm a thrifty investor, as I noted in the original post.
Bad plan. For short term investment, you would want something like a CD. You are not going to get more than 3%. You don’t put a short term investment into the stock market.
Wow. Am I in the correct forum? Why would I invest 15K short-term? I'm investing my own 15K, that I'm supposed to use for car purchase, long-term, and I'm using bank card to pay the car's 15K over 15 months, where I can easily pay this via my paychecks.
You can respond to an answer without being sarcastic. “Am I in the correct forum?” “I thought all Bogleheads knew this”. We don’t talk that way to each other on here. I was referring to paying off the credit card in 15 months. Good day sir.

H-Town
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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by H-Town » Sun Jul 14, 2019 10:22 am

ThisJustIn wrote:
Sat Jul 13, 2019 6:50 pm
I'm currently using a leased car, and I'm going to return it after its 3 year due in December.
Now, I'm planning to buy a 3-4 year old car around November / December, with a budget of somewhere between 12K-15K (Toyota / Honda).

First things first, I can buy this car in cash in December, I have enough cash in online savings accounts.
But I looked for 0-interest loan options, and I went to Bank of America today (I'm a Platinum Honors member, probably the highest loyalty program). Lady at Bofa said the only option for 0-interest loan is to get a new BankAmericard (https://www.bankofamerica.com/credit-ca ... edit-card/) (I already have one which I opened in 2011, but this promo is new, and the lady said I can have two of the same card). This card has "0% Intro APR for 15 billing cycles for purchases, and for any balance transfers made in the first 60 days.". So, I can get this card around November, and then buy the car with some 2K-3K downpayment, plus Bofa loan, and I pay the balance through this new card over 15 months, with 0-interest. That way, I can use my money (that I would use to pay in cash) and invest it over time instead.

I'm a thrifty investor, and although I can purchase the car full in cash, I started leaning towards this 0-interest loan method through the new BankAmerica card. However, After those 15 months, there is no use of that card for me, because I already have another copy. So, most likely, I will cancel the card after the car is paid over 15 months (which may hit my credit score for a while, I'm open to suggestions on whether this is the case.).

Does anyone have any suggestions as to whether to get BankAmericard and paying the car with 0-interest over 15 months, vs. buying full in cash?
You should explore other options: Chase Unlimited has 3% cash back and 18 months interest free... Citi double cash back have 24 months interest free. Both are superior compare to BOA's offer.

Also - unless you have an emergency fund, I don't recommend put everything in the stock market. If the market tanks and does not recover in time, you're facing credit card APR in the 20-30% range. You should consider CD or high yield savings for the cash you want to take advantage of 0% interest.

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Bengineer
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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by Bengineer » Sun Jul 14, 2019 4:17 pm

On the 0% vs cash. You're paying for that 0% in the purchase price. A dealer isn't going to give you free money. It's unlikely you'll get as low a price as with cash.

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ThisJustIn
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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by ThisJustIn » Sun Jul 14, 2019 5:22 pm

Bengineer wrote:
Sun Jul 14, 2019 4:17 pm
On the 0% vs cash. You're paying for that 0% in the purchase price. A dealer isn't going to give you free money. It's unlikely you'll get as low a price as with cash.
Yes, this may be the case, I need to check this with the dealers when the time comes.

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Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by ThisJustIn » Sun Jul 14, 2019 5:24 pm

H-Town wrote:
Sun Jul 14, 2019 10:22 am
ThisJustIn wrote:
Sat Jul 13, 2019 6:50 pm
I'm currently using a leased car, and I'm going to return it after its 3 year due in December.
Now, I'm planning to buy a 3-4 year old car around November / December, with a budget of somewhere between 12K-15K (Toyota / Honda).

First things first, I can buy this car in cash in December, I have enough cash in online savings accounts.
But I looked for 0-interest loan options, and I went to Bank of America today (I'm a Platinum Honors member, probably the highest loyalty program). Lady at Bofa said the only option for 0-interest loan is to get a new BankAmericard (https://www.bankofamerica.com/credit-ca ... edit-card/) (I already have one which I opened in 2011, but this promo is new, and the lady said I can have two of the same card). This card has "0% Intro APR for 15 billing cycles for purchases, and for any balance transfers made in the first 60 days.". So, I can get this card around November, and then buy the car with some 2K-3K downpayment, plus Bofa loan, and I pay the balance through this new card over 15 months, with 0-interest. That way, I can use my money (that I would use to pay in cash) and invest it over time instead.

I'm a thrifty investor, and although I can purchase the car full in cash, I started leaning towards this 0-interest loan method through the new BankAmerica card. However, After those 15 months, there is no use of that card for me, because I already have another copy. So, most likely, I will cancel the card after the car is paid over 15 months (which may hit my credit score for a while, I'm open to suggestions on whether this is the case.).

Does anyone have any suggestions as to whether to get BankAmericard and paying the car with 0-interest over 15 months, vs. buying full in cash?
You should explore other options: Chase Unlimited has 3% cash back and 18 months interest free... Citi double cash back have 24 months interest free. Both are superior compare to BOA's offer.

Also - unless you have an emergency fund, I don't recommend put everything in the stock market. If the market tanks and does not recover in time, you're facing credit card APR in the 20-30% range. You should consider CD or high yield savings for the cash you want to take advantage of 0% interest.
Thanks, Chase Unlimited is a good idea I didn't think of, I will check it.
I'm not a novice investor. I have my emergency fund, then some cash cushion in online savings accounts, and then much more in the market. I'm not novice at all, No. Check my investing suggestions here: www.firetobiz.com/investing-basics .

mortfree
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Joined: Mon Sep 12, 2016 7:06 pm

Re: Buying a used car: 0-interest loan over 15 months, or buy in cash

Post by mortfree » Sun Jul 14, 2019 5:58 pm

Bengineer wrote:
Sun Jul 14, 2019 4:17 pm
On the 0% vs cash. You're paying for that 0% in the purchase price. A dealer isn't going to give you free money. It's unlikely you'll get as low a price as with cash.
The dealer wants you to finance through their preferred lender.

They will give someone a lower price by taking out a loan than if they paid cash.

Me: “I have cash”

Dealer: “no low price for you then. Finance through our lender and we will give you $500 off the price”

As for this situation, OP is using a 0% bank credit card. The dealership isn’t giving him 0% anything.

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