Do you have a dumb question that you're kind of embarrassed to ask in the main thread? Is there something you're just not sure about?
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Notes -
I don't understand your confusion. What's the difference between those categories, in your mind?
Any car with a market value high enough that a bank would consider financing it is going to be depreciating at a rate I'm not comfortable being liable for.
There will be interest, at rates likely higher than Ultrashort Treasury yields.
If I want said interest payments to be less than ~11%, the financer will force me to purchase Collision coverage (and I remind you, avoiding purchasing this was the entire point of opening this thread in the first place.)
The difference is that the emergency fund is something you feel the need to separate from your regular savings and refill by spending much less money while you do so. If you were spending your regular savings, you wouldn't let having to buy a new car change what you else you spend. The cost would be spread over decades or even generations.
I don't know what you mean by being liable for depreciation.
But less than the expected rate of return of the S&P 500.
This is higher than I would expect. I just got a call from a car dealer offering me about 4%. Maybe that's with insurance. This makes little sense. I can borrow at about 8% I believe from my unsecured line of credit. Why would the interest rate on a car, which is secured loan, be higher than that?
If interest rates are really that high, then maybe it's a bad idea to lease, but still, I don't see the logic in eating rice and beans for six months to recover the expense. You can spread it over your lifetime by just having less savings.
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