Car buying advice NEED HELP!

[Jeff Arndt]

I am a young investor and in the next year or two I will need a new car. I bought it in high school and it's running on it's last legs. So I run into a very interesting dilemma that has shown two very distinctive and conflicting view points. Do I buy a used car for about 6-8k cash or do I fully leverage myself and buy a newer car and finance it? After all, real estate can be effective because of the use of other peoples money. However, I'm not a fan of financing a depreciating asset.

Case 1: Old Car Cash Purchase

Pros: No outstanding debt to go against my Debt to Income Ratio.
More cost effective over the long run.

Cons: It's an old car.
Takes a way a large chunk of cash that can be used for a down payment or rehabbing.

Case 2: Finance New to Less Than 3 Year Old Car (Under 25k) (Under 3%)

Pros: A Nicer Car
Can obtain financing at a rate less than my expected return on real property.

Cons: New debt will hurt my DTI ratio.

Your thoughts and experiences!?

[Michael Lauther]

The luster wears off of new cars long before the payments end.

Find a quality used car pay cash and enjoy remaining dept free.

As for how much to spend and which car, well that will take as much research as buying your first investment.

I can afford to buy a new car but when I am buying a property in my target market for $20,000 cash that nets me $400 to $500 per month it pains me to spend that amount and more on a depreciating asset.

I enjoy Driving my old Lincoln town car as much as any new car I have owned and I have owned new Mercedes, and Cadillac s. ( I know the town car is an old mans car, but as you get older you tend not to care what others think)