Is it financially in your best interest to pay cash for a new car?
If the only thing that matters is the bottom line, then yes, paying cash on the barrel head is the least expensive way to buy a car. If you calculate the present-worth cost of financing a vehicle, even at a reasonable interest rate, it will be higher than if you paid cash for the car. Having said that, one must consider the opportunity cost of paying all at once for a vehicle. If you plunk down 20 or 30 grand or more for a car, what else might have you done with that money? If you can invest it, then using it all to purchase a vehicle may not be a good idea -- but only if your rate of return on the investment is higher than the interest rate you would pay on the loan if you financed the car. It depends on the interest rate. You need to calculate the cost of interest to finance the car, then calculate how much you would make if you invested the money for the same period. A zero interest loan that many auto manufacturers are offering might be to your advantage if you would invest the money for the duration of the loan. On the other hand, can you get a discount for paying cash and how does THAT fit into the above calculation?