Re: Vehicle purchase...WWYD?
The 4.5% was with a local credit union. It's only up to $25,000, but still good. We had to move DH's pay roll to go into the account and we have to use the debit card 12 times a month, but DH goes through the McDonald's drive thru every day on his way to work and charges his $1.07 sweet tea, haha! It's his one splurge for the day and he says the sugar gets him moving at 3am so fine. It's guarenteed for as long as we hold the account though...
As for the purchase, what we are actually getting in a Suburban or Yukon XL. We'd like a 2007 or 2008 with less than 30,000 miles on it so this will run us about $35K. There are many reasons we'd like this for our third vehicle so I'm not really going to go into that since that part is already decided and agreed on by both of us. And yes, I do understand how these depreciate, but over the course of 15+ years we plan on keeping it, honstly, I'm fine with that.
But aftering reading some of the responses, I was all gun ho to just pay cash and have it out of the way. I'm not a HUGE fan of DR. I like his "snowball" approach to debt and his theories do make sense to a point, but like pp said, I personaly have always felt it's fine to do 0% and set the money aside to pay for it in case something did happen. We have financed MANY things this way and it's worked for us.
Anyway, got home now and had another talk with DH and he said his main reason for not wanting to pay cash is he'd like to have the money available for other "business" ventures. In the past he's made a lot of our money from buying things from land to landscaping/lawn care equipment to cars when people needed to get rid of them quick and then holding on to them/selling them for more. We also have tossed around the idea of college rental properties with my parents. So while he said we should set it aside, he thinks we should should just finance it but pay it off agressively...like $500 a month from my check and then $1500 a month where his check goes into (our savings account). Thoughts on this?
That woud have the new vehicle paid off in about 9 months which would put us at next September. At that time we'd also "cash out" DH's business account which would put another $35K or so into savings.