Loan or cash: which is best to finance a car?

It is said the single monthly commitment that can derail a plan to build wealth is paying a car loan.

This happens if the car depreciates in value faster, let’s say 50% in two years, and it was financed with a loan of 90% or more of the value at a loan tenure of nine years.The value of a car falls over time. It does not matter if it was paid for in cash or with a car loan. So, to be prudent, consider buying a lower priced car that serves the purpose, or not to buy one at all. A car is a financial liability and its value depreciates over time.

If the effective interest rate of the car loan is 4% per year and interest expense is RM4,000 , that would be RM1,400 in net interest income.This is wiser to finance a car purchase with a loan if you are a good investor who can achieve an investment return greater than the effective interest rate of the car loan.

The interest so great for car hire purchase

Loan for sure. Where got so much to buy a unvalue assets

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