@schnolhamor IMHO the reason most ppl recommend 5 year loan is mostly to coincide with warranty. And this applies to brand new cars only ya. The worst financial position to be in is to maintain a car WHILE still being indebted to the bank. You got double cash outflow for the installment and out of warranty work.
Now if you buy second hand/recon with no warranty coverage - stretch that to the max is also fine, as long as you can afford it.. remember what they say, cash in hand is the most important asset you can have.
@schnolhamor Interesting discussion. If I am not mistaken for car loan, one thing to consider is the effective interest rate which is much higher than the 3.2%.
@schnolhamor May be it's a generational thingy but, personally I think first assessment is on affordability. 9 years is a looong time to be paying. Also just consider the amount of interest saved.
@schnolhamor The problem with this thinking is that you're essentially timing the market with the excess cashflow. S&P500 10% per annum is the average over a long period of time, and the last decade has been overall very good, even considering the bad year in 2022. There are times when it has consecutive negative years, in which case this tactic will backfire.
@schnolhamor It is better to buy a second-hand car with cash. Car is a depreciating asset, you might be happy and proud buying a new car, but the happiness only stays for 1-2 years, and then you will get bored with it.
@schnolhamor Because they only think about the bank's profit. Of course banks have to make money. But allowing you to have an extra RM700 every month as per your example is a win-win situation. There's a lot that you can do with that extra money although you can afford to sustain your lifestyle without it. But people are obsessed with seeing the accumulated interest to amplify the situation.
