How many Prius owners paid cash vs loan for their car?

Paid cash here. If you go the loan way, try and shop around for the best interest rate. The dealer is not always the lowest.

 

<div class='quotetop'>QUOTE(loveit @ Aug 14 2006, 09:52 PM) [snapback]303290[/snapback]</div>

I paid cash too

 

Cash. My wife is NOT a fan of debt. And yet she still married me...

 

Cash.

For loan rates I always check Penfed.org for a competitive baseline, and often the best. Before you ask -- anyone can join for a couple $ contrib.

 

<div class='quotetop'>QUOTE(loveit @ Aug 14 2006, 07:52 PM) [snapback]303290[/snapback]</div>

I paid cash, but that didn't mean anything to the dealer; the car was full list price, anyway. But at least, I didn't have to be on the waiting list. The car had just come in from another dealer, in a dealer swap for something the other dealer wanted, so it wasn't presold. Otherwise, I would have been on the wait list for at least six weeks.

All that said, if you decide to get a loan, see your bank first. They generally have interest rates about as good as dealer/manufacturer financing, and can be a lot easier to work with, since (I presume) you have a deposit account with the bank. On the other hand, there are times when dealer/manufacturer financing runs interest rate specials, with very low rates. Whether Toyota does or not, however, I couldn't say. All of their cars seem to move well without special financing deals, such as, let's say, Ford might have.

My first post: Twelve-day old Prius, white, package 4, 35 mpg on the first tankful. I think I'm in love.

Kindest regards,

Bill Hunter

 

<div class='quotetop'>QUOTE(loveit @ Aug 14 2006, 06:52 PM) [snapback]303290[/snapback]</div>

I'm reading the reply's and thinking "of course, pay cash...foolish not to". But the tax credit will be long gone in 18 months; you can still get the $3150 credit if you run down to your dealers by the end of Sept.

My CU has car loans for 6.5%. With an 24 month payoff on a $26,000 loan, you would pay $1,797 in interest. Pay it off in 18 months and your interest cost drops to $1358.

Get a $3150 tax credit. I would guess your gas bill will drop in half compared to your 1977. A rare case where taking on debt for a depreciating asset makes sense.

Have fun in your new Prius!

 

I think in your case it depends on how soon you need or want the new car. I really prefer to pay cash for everything though, less hassle.

If you decide to use a car loan be sure to shop around. Credit unions are pretty good places to start. I just checked one I belong to and they have new car loans at 3.25% up to 36 months, 4.75% up to 60 months. You can earn more than that in a money market fund or on line savings account such as ingdirect.com.

 

Pay cash if you can. Paying interest sucks.

 

well we could stand to build up some solid credit history (great credit scores, short credit history) so we can get a better deal whenever we buy a house. and it's not like people like us would have enough cash laying around to buy a car. so we got a loan and pay as much extra as we can, whenever we can.

however, if i had the money i'd say screw the interest. i hate paying for the privilege of having a debt like that hanging over my head. i hate owing anything to anyone. :angry:

 

Total agreement with j24816 . . . IF your tax situation can take advantage of the $3150 credit. Look at it as though you are being paid by the IRS to finance the car NOW.

You didn't mention how much you have already put aside in your Prius slush fund. But if it is sizable, that too should help alleviate any fears of financing.

 

Paid cash as well.

 

I would love to have paid cash, but all we could really swing was $10k down. That reduced our loan amount by quite a bit, and as people here have said, the tax credit works in our favor this way. I'm enjoying the gas mileage double that of my last car, so its a win-win-win all the way around on this one.

Of course, it would have been better to pay cash and get the tax credit. Paying interest doesn't make a lot of sense, but at least we don't have any other credit debt except our mortgage. We're on track to have that paid off by the time we retire.

 

I paid cash. Not wise to pay interest on depreciating items.

 

Paid cash too!

shop around for rates- if you have a 457 or similar plan you can borrow against it's always a good deal since you are paying yourself back the interest!

 

I drove it home unpaid. We only have one checkbook and my wife has it. I brought a check for the full amount the next afternoon. So, I guess I paid cash.

 

<div class='quotetop'>QUOTE(loveit @ Aug 14 2006, 09:52 PM) [snapback]303290[/snapback]</div>

I just purchased my Prius three weeks ago...My car out the door (pack 4) was 25989. I put 5K down so I financed 21K to round the numbers...I went online and got a car loan from eloans...Interest rate on a 4 yr simple interest loan (no prepayment penalty- more on that later)...was 6.20. When I went to the dealer my salesman said how are you going to pay for this..I told him I already had financing. He asked me what my rate was because maybe he could do better... Thankfully I have very good credit. The finance guy told us we could have 5.95%.. I said ok, when car comes in looks like we will go with you. When the car came in we were ready to do the financing with the dealership....When the papers were being reviewed I noticed an extra $100 charge at the bottom of the finance papers...I asked about it and the finance manager said this is a bank charge that has nothing to do with us.. This goes directly to the bank. BTW...this is the ONLY thing that was a little bit funky with the dealership we dealt with..HERE IS THE MAIN POINT....I noticed the APR on the loan rose from 5.95 to 6.22% because of the $100. I told him...look, I am not happy about the extra $100. I would have liked to have been told about this when I first talked financing. He reiterated it was not the dealerships fee at all. I said ok, lets get this done...Let me make you out a separate check to the bank for the hundred.. I am not going to finance the $100 financing fee over 4 years...He said...the 100 has to appear on this form..It is not my rule it is the bank's... I said... I am NOT going to finance with you if I have to finance the 100. It makes your deal worse than eloan's deal... Then I was quiet....for a while.....He looks at me and says...I don't have your credit score in front of me...What was it again? I told him it was in the high 700's...He asked are you sure it is about 725? Absolutely. He then asks, can we do the deal if I give you a better rate? I said as long as the APR is below what I was going to pay (ie less than 5.95 I am ok with it)... He gets me 5.5 with an APR of 5.71. Now regarding the pre pay clause. Technically, you cannot pay off the WHOLE loan in 6 months or less without paying a penalty, bec the bank wants some interest at least. But you can pay extra each month to chip away at the interest. So, I took out a 4 yr loan, but have my quicken account set up to pay automatically each month an amount that really makes it a 3 yr loan...That was my strategy all along...but I like to get the extra year JUST IN CASE I have a time when I would like a lower car payment. The last new car I bought, a 2001 caravan , I did the same thing and ended up paying it off in 20 months...Everyone has there own financial situation.. This is how I have worked it. Hope this helps..

 

I financed through the dealer. The rate was not significantly higher than anything I saw elsewhere, and I plan to pay off as quickly as possible anyway. I put as much down as I could afford without taking away my safety net.

I also had never bought a car or house before, so I wanted the financing to help further establish my credit.

 

Well, I've always financed my cars. What I try to do is try to make my car payment something I'm comfortable with. I don't try to minimize my payment. What I don't use as a down payment, I invest. You should do whatever you feel most financially comfortable with. If you're uncomfortable making car payments, the tax credit won't really help your state of mind.

 

<span style="color:#996633">The tax incentive is a very valid point and would be the way to go if you’re ready to get your car now. However, everything seems to point to the fact that the Prius is about to make a big change. I’m talking about a 100MPG Prius possibly in 2009. You have no way of knowing weather there will be a tax incentive at that time or not, but there is no reason to think that there won’t be. So, as they say in the carnival; “You buys your ticket, you takes your chances".

I don’t know what I would do in your place. I am saving my money for a 2010 now and enjoying my 2006 also.</span>