Why You Should Finance Your Car (And Not Pay Cash)


Yes, it's true: you should probably finance your next car, and not pay cash. Today I'm explaining why it often makes more sense to finance your car, and not pay cash -- and I'll explain the scenarios where I think financing a car is better than paying in full.


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  • Richard Bamforth
    Richard Bamforth2 timmar sedan

    Great advice Doug. However, if you want to lose money, then buy a car. That said, the best time to buy is when the car is about three years old. A friend last week bought a 3 year old Jag XJ. New price three years ago = £75k. He paid £30k with only 24k miles on the clock. That means its depreciation over three years was 60%. Incredible fall in value however, we know that Jags do not retain their value. Beautiful car nevertheless. Keep up the great work Doug.

  • MMalecke
    MMalecke6 timmar sedan

    This is the absolute worst argument ive ever seen someone try to make.

  • MMalecke
    MMalecke6 timmar sedan

    Have debt, and gamble the money you do have!

  • John Midwest
    John Midwest7 timmar sedan

    Your whole argument (6:20) is that the stock market always goes up. I think that's a foolish assumption

  • Lane
    Lane8 timmar sedan

    noodle is lookin quite spiffy

  • A. Freeman
    A. Freeman9 timmar sedan

    Backup cameras have done nothing for safety except make people pay even less attention backing up. They're not a safety feature, they're safety theater.

  • Anton Kovalov
    Anton Kovalov15 timmar sedan

    Should i finance a used one? Considering that it’ll be braking while still paying off the debt

  • Zolar Zen Drew
    Zolar Zen Drew17 timmar sedan

    what da dog doin?

  • Dima Hich
    Dima Hich19 timmar sedan

    that's a bit risky to invest in stocks while indebted

  • Adam Dominguez
    Adam Dominguez19 timmar sedan

    lol nah I’m good

  • mrfireclaw
    mrfireclaw23 timmar sedan

    When did your car show become a financial adviser l

  • John Franco
    John FrancoDag sedan

    I'm not going to lie, when the dog disappeared I fast forwarded to see if he popped back in.

  • Jimmy Cain
    Jimmy CainDag sedan

    I don’t finance anything that’s for the suckers.

  • ihatezgoogle
    ihatezgoogleDag sedan

    Uhhhh what is the point of this video?

  • Peter C
    Peter CDag sedan

    best financial advice : buy 4-5 years old Japanese reliable car at 50%-60% off MSRP sell before it starts to require some major services at 7-9 years, works for me just fine. resell value almost same as purchase price

  • vap0rtranz
    vap0rtranzDag sedan

    1 caveat: people who go into debt forget their obligations, and spiral into indebtedness. Classic example is credit card death spiral: charging until card is max'd out and then opening a 2nd credit card to pay off the 1st, etc. Otherwise Doug is right: take leftover $ and invest it _if_ net returns exceed compound loan interest; don't just buy depreciating assets with cash..

  • Thinamo
    Thinamo2 dagar sedan

    Finance your car instead of paying cash... BUT FIRST: Check out cars and bids where you bid on cars that you buy with cash

  • ً
    ً2 dagar sedan

    At 4:53 he starts to get to the point of this video. Don't waste time watching anything before that

  • Thomas Fox
    Thomas Fox2 dagar sedan

    He’s really saying the same thing as the “budget types”. His strategy only applies if you could otherwise afford to pay cash… but here we invest instead to get the return and negate the finance charges. People that live paycheck to paycheck… you have NO BUSINESS financing a car.

  • Léo Lévesque
    Léo Lévesque2 dagar sedan

    i love doug

  • Ben Zemanek
    Ben Zemanek2 dagar sedan

    10 year finance on a $3000 2005 Corolla? You got it Doug!

  • Nick DeBone
    Nick DeBone2 dagar sedan

    Solid video Doug!

  • bmitchely
    bmitchely3 dagar sedan

    Doug (A Millennial) is giving the same advise of my Dad... We, as a society, will be fine :)

  • Ud73heih Jd8du3hdid
    Ud73heih Jd8du3hdid3 dagar sedan

    It's very simple, you need money to make money. When you buy a car outright, you no longer have the money to make money. The only question is, can you finance lower than 9% (the average stock market return)?

  • Frank
    Frank3 dagar sedan

    If you expect more from your money than the cost of the loan, take the loan. That's really all it boils down to. The secret is that most people will not invest that money. They will spend it on some other BS.

  • Joseph Scarfo
    Joseph Scarfo3 dagar sedan

    my rusty and trusty 1500$ 2000 Chevy S10 ZR2 that I start with a screwdriver allowed me to pay CASH for my first piece of hunting land at 25 years old. Screw a payment and screw the bank to. I'll gladly finance a house because it gains value, but a depreciating asset like a car? No.

  • ed colins
    ed colins3 dagar sedan

    No Dougscores ?!

  • Dislob3
    Dislob33 dagar sedan

    7:45 You would think that having money gives peace of mind also LOL

  • Dillan Mistry
    Dillan Mistry3 dagar sedan

    The doggo in the driving place

  • Awesomest Drive
    Awesomest Drive3 dagar sedan

    Scotty must have hacked: More Doug DeMuro, account

  • Mellowphant Pi
    Mellowphant Pi3 dagar sedan

    My first thoughts are… everybody that has money in the stock market already knows this, and everybody that needs to be told this doesn’t have the money to take on the debt.

  • Tanzeer Siddiquee
    Tanzeer Siddiquee4 dagar sedan

    "they think Peace of Mind has a big value"

  • Eymard Barron
    Eymard Barron4 dagar sedan

    Enjoy life people! As my grandfather always said..."only guarantee in life is death" but then again if you are broke you can't really enjoy life either. sorry for the darkness in this one lol!

  • grandmaster Jim
    grandmaster Jim4 dagar sedan

    How is debt cheaper than no debt? I bought a honda 10k and could have financed for relatively cheap 3.5% apr 48 months but just bought it outright. Without paying interest I had more to contribute to my 401k

  • Faden Mac
    Faden Mac4 dagar sedan

    Could have bought a cool used 20k car and still invested the 50k. I recommend looking at Cars and Bids.

  • Ben S
    Ben S4 dagar sedan

    IF your financial plan has this many “ifs” for the future, it is only a good plan if those “Ifs” end up being positive. IF you would have paid cash and your revenue would have fallen 35% and/or lost your job you would have been better off by having no payment. One shouldn’t assume that things will never change.

  • based_will
    based_will4 dagar sedan

    Ah okay, so we're assuming I have enough money to my name to fully pay for the car but still finance it anyway 😂

  • T-Mass
    T-Mass4 dagar sedan

    skip to 4:55 for him to actually start answering the question

  • T-Mass
    T-Mass4 dagar sedan

    so I should finance a 300 dollar 94 civic ?

  • Cyba IT
    Cyba IT4 dagar sedan

    Nope, buy whatever you can afford outright. You might not be able to drive a Defender (hehe) but you also won't have debtors tracking down your ass and your car is yours. If you're rich enough rent a supercar and then you don't have to worry about the insane maintenance costs.

  • Gil Folsom
    Gil Folsom4 dagar sedan

    Excellent video! Recently purchased a 2021 C8 Corvette at MSRP. I am retired and had plenty of money in a 401k that I could have used to pay cash for the car. Financed $60k of it at 1.99%, keeping the cash I could have used in the stock market. Another key point for retirees is the tax liability of withdrawing money from a 401k. I would have probably had to have paid at least 20% in taxes, about $12,000 on that money. Finance charge for 60 months is $3,600. If there ever was a no- brainer, the loan was it!

  • Mark King
    Mark King5 dagar sedan

    That 96 accord wagon is safe, people texting and driving is not safe.

  • egs2169
    egs21695 dagar sedan

    Doug in theory this works. The problem is people will almost always buy too much car because they only look at the payment and not the cost. And in many cases they will do ultra long 72 month loans which leads them to be upside down on equity if they trade in. So yes your theory works in a bull market but more times than not people will not buy responsibly.

  • Ryan Buttie
    Ryan Buttie5 dagar sedan

    Preaching to the choir

  • rockabilly Page
    rockabilly Page5 dagar sedan

    Smart way. "Cool cat"

  • Carbrickscity
    Carbrickscity5 dagar sedan

    5:14 how is 1.99% free money...even at 0% it's not free money. Free money means you don't even have to repay the principle. Just free money given to you and no need to pay a single dime back. And I have seen 0% before. Also there's no guarantee win at the stock market, what if you lose during those months...double losing then. Not the best argument. There are also fees, opportunity cost, taxes, etc, in stocks. And he is assuming everyone is buying a $70k car. For less than $30k or $20k, it makes more sense to pay cash. And yes, to some people, peace of mind is priceless. You have to worry about 2 additional things (not 1) if you finance, that is to pay your car payments for whatever the number of months and to keep an eye on your investments. Some people would rather have none of the above.

  • Steve Haas
    Steve Haas5 dagar sedan

    So, if you can afford to pay cash, finance the car if rates are low, I get that. If you can’t afford to pay cash, then don’t finance, but then you need a car to get to work and you can’t get those low interest rates.

  • VeloRydr
    VeloRydr6 dagar sedan

    The advice Doug is saying, is to get a good loan, and invest the cash. It’s good advice, for people who already have the knowledge to make these types of high dollar investments. For those who know how to invest, likely, they already make these types of decisions. Because cars in general are terrible depreciating assets, I tend to buy them used at aggressively low prices. Other than gas and maintenance, I’ve never lost a large sum of money on a car in 20 years. Some of the vehicles I’ve bought actually increased in value, so I’ve sold them at the same price or more than I bought them for. However, I recently made the decision to buy a new car at a dealership paid full in cash because I wanted the vehicle. Not because I needed it…. Same goes for every luxury item I’ve paid for. For me, when investing money with an expected return, I prefer investing in property, education, stocks, and retirement funds.

  • Sean Stein
    Sean Stein6 dagar sedan

    What if we buy reasonably priced reliable regular used cars?

  • Sean Stein
    Sean Stein6 dagar sedan

    Lol what if we dont want to invest

  • K W
    K W6 dagar sedan

    Always finance a car under 3% and invest the money, instead of pay cash for cars, dave ramsey plan is for failures, not for smart leverager Debt free is a LIE,a SCAM, u ALWAYS have bills to pay, just how big of them Mortgage / property tax Utility Insurance Grocery Internet Cell phone These 6 catagories is already a MUST for modern lifestyle Just try to make more money to off set thr bills AND of course, not changing cars every 5 years, just drive every car till it shatters

  • John McVay
    John McVay6 dagar sedan

    This is only good advise if you can afford to put 20k down and have a car payment of $1060 for the next 48 months.

  • Avery Holder

    Avery Holder

    6 dagar sedan

    Not really, it'll work just as well for someone putting down 5k and having $400 monthly payments. You're just working with smaller overall sums.

  • greenbay
    greenbay7 dagar sedan

    Does Doug not pay taxes on his investments?

  • Steve Hoy
    Steve Hoy7 dagar sedan

    So risking for short term is smart NOT haha. moronic mindset.

  • NikAradan
    NikAradan7 dagar sedan

    There is one problem with the advice. If you put your cash into a stock market and finance a car, you need money in you monthly cash flow to pay the financing every month. I.e in case of your Defender, you need about 1100 each month of additional expence for 48 months. If you can handle it - then the strategy is a right ond for you.

  • Pluto&
    Pluto&7 dagar sedan

    If safety was your main focus, what’s the oldest year that you would suggest buying a car?

  • J Z
    J Z8 dagar sedan

    At this rate he is prob also thinking lease don't buy... idiot Doug. Come on man, if u can use cash do it, if u can't then take this advice (odv be careful w the markets)

  • Evan H.
    Evan H.8 dagar sedan

    Dave Ramsey would like your location….

  • benjamin franklin
    benjamin franklin8 dagar sedan

    so technically financing is a way of leasing but with more freedom, i get u doug😂

  • Aaron Lean
    Aaron Lean8 dagar sedan

    Oh and as far as safety goes you're going to be safer 60's and 70's muscle cars compared to new muscle cars.

  • Aaron Lean

    Aaron Lean

    6 dagar sedan

    @Avery Holder How not so? You don't think the monstrous size of old muscle cars is of a benefit? The bigger and heavier the car the better it is for occupants. No comparison between old and new muscle cars.

  • Avery Holder

    Avery Holder

    6 dagar sedan

    Lmao no

  • Aaron Lean
    Aaron Lean8 dagar sedan

    Financing a car is never a good thing. That is the reason new cars oversaturate the used car market and the used car market has amazing cars on it as it is. What reason would someone have to buy a new car if they're educated on cars they'd realize new cars all look the same and aren't built to last.

  • George Brown
    George Brown8 dagar sedan

    I take it Doug isn't the type to ride motorcycles

  • George Brown
    George Brown8 dagar sedan

    Use debt to obtain appreciating assets. That's how most wealthy people begin to make money. Buy property, rent it out to make a small amount of passive income. Build equity on it. Then take a loan out using the house as collateral. Repeat the process....and least that's what I've been told by and seen from wealthy people.

  • veeman 293
    veeman 2939 dagar sedan

    wonder if Doug s advice would have worked in 2008 2009

  • veeman 293
    veeman 2939 dagar sedan

    1.99 is not zero, it is 2

  • Guru Mitar
    Guru Mitar9 dagar sedan

    2%? In México average rate for car loans is like 12%, if you get 7% it's a bargain.

  • Weets
    Weets9 dagar sedan

    Earned back your finance charges again before short-term capital gains tax I’m assuming?

  • Melvin
    Melvin9 dagar sedan

    An American tells you to finance a car. Ironic

  • scorpiomaj27
    scorpiomaj2710 dagar sedan

    Doug, you make a great point most people don't think about, the brakes on my old 1996 Beretta were terrible, even with a big brake kit. I feel great knowing my Lexus has blind spot monitoring, great traction control, loads of airbags and great brakes.

  • Noah Estus
    Noah Estus10 dagar sedan

    This perspective is true, but most people aren’t millionaires where the Land Rover was 1 percent of their income and so financing and risking the rest at any risk level would make sense. For someone making 300 k and buying a 70 k car and they get hurt or something happens, that car could prevent them from taking care of their family. I’d rather be somewhere in between where my car still isn’t tied up completely in debt but still utilizing investing.

  • Ruben N
    Ruben N10 dagar sedan

    Lol, stick to cars reviews. Don't listen to this guy, at least not until he understands volatility, risk, opportunity cost and depreciation.

  • CarlBigA007
    CarlBigA00710 dagar sedan

    What are you standing in front of ? What is the car in the Cars and Bid commercial?

  • Scott Yellan
    Scott Yellan11 dagar sedan

    Stick to car reviews buddy .. This is the equivalent as; people who don't bet on Sunday's game are losers! Over the course of the 48 months, do you think the DOW will continue to rise at the same pace? Come on Doug .. you made a bet and won (for now.) And that's how Vegas was built .. by letting you win - a little. Cars are appreciating and money is free - sounds like a real sustainable model to me. Lets revisit this video in 5yrs.

  • maxview99
    maxview9911 dagar sedan

    I want a Doug Stocks channel. Can you imagine Doug buying weekly options on SPY?

  • Nate
    Nate11 dagar sedan

    2:18 it’s magic: doggo disappear

  • David Burkholder
    David Burkholder11 dagar sedan

    Your example assumes that folks want to remain "in the system." If you can live cheap AND off the grid of all the noise the world provides then wiser to pay cash. There can be tons of scenarios where cash is right but tons also where finance could be right. My father has paid cash for everything for 50 years, lives in a very modest home and has NO bills and he does fine. If on the other hand your goal is to always strive to BE someone then whatever.

  • Paul
    Paul11 dagar sedan

    Borrowing money to buy a depreciating asset is ludicrous. If you dont have the cash, you cant afford the car. In dougs case he should be buying a 20k car not a partially financed 70k car. I like his videos but this one is moronic. AND, its for a Landrover, the worst piece of indian/chinese crap ever. Our wonderful 2004 bought new corolla just died, replaced it with a very low mileage 2013 Civic SI thats a blast to drive. Car loans are to the middle class what those check cashing places are to the lower class. Just learn to set your expectations to a reasonable level and invest as much money as you can in things that dont depreciate and actually earn you money. You'll be thankful cruising into your senior years with more money than you know what to do with.

  • the_ritter_special
    the_ritter_special11 dagar sedan

    Unrelated but I feel like most people who drive modern cars (crossovers specifically) are awful drivers. All over the lane, slow, braking when no one is in front of them, etc... At least here in Florida anyway

  • Joel
    Joel11 dagar sedan

    You cant put a price on the sense of calm and relief that comes with having absolutely not debt or payments.

  • stuntmonkey00
    stuntmonkey0011 dagar sedan

    Hard truth: really well to do individuals pay cash for their cars. That's because they aren't buying flashy cars and aren't wasting time investing the difference on what amounts to a small amount of money for them. Not so rich people finance cars that they can't afford, end of story. Like, look at the percentage of cash buyers for Subaru's vs BMW's, and Subaru demographics lean towards well to do but not flashy rich families.

  • Pratik Pramanik
    Pratik Pramanik12 dagar sedan

    Cars & Bids financing options soon??

  • Alex Adeshigbin
    Alex Adeshigbin12 dagar sedan

    So basically everyone should finance their cars if they’re wealthy and have an 800 credit score. Got it

  • Balls of Steel

    Balls of Steel

    10 dagar sedan

    Actually yes, what I've noticed is that rich people never ever buy with cash, they do everything in loans all the time, and that's how they actually increase public debt. The higher position in a company, the more money you borrow and buy stuff with someone else's money (bank) and keep your money from salary and bonuses to increase your wealth. All assets that lose value fast, are financed. It's a crazy, but it's actually very expensive to be poor.

  • Lessardo
    Lessardo12 dagar sedan

    financing at under 2% is literally free because inflation goes up by 2%, essentially meaning you are spending 0% interest on your loan. don't finance if you can't get it under 5% because then after inflation, you are essentially matching the stock market or losing money based on historical averages and the tax you pay on that gained money.

  • Craig Philhower
    Craig Philhower12 dagar sedan

    Utterly distracted. NOODLES!!

  • rblbatb
    rblbatb12 dagar sedan

    yes, buy a reliable used car and pay cash.... From an old guy that has been around the block.

  • Meraz Khanum
    Meraz Khanum12 dagar sedan

    THIS IS A CAR!!!!!!!!!!!!!!!!!

  • NoNegotiations
    NoNegotiations13 dagar sedan

    Yeah 1.99% if you have perfect credit score. Doug the type of guy that misses every detail.

  • NoNegotiations
    NoNegotiations13 dagar sedan

    Doug has became Dave Ramsey Show.

  • TurtleSauceGaming
    TurtleSauceGaming13 dagar sedan

    "If I had bought the Defender with cash..." You'd not only be out the cash, but on the hook for one Landrover Defender... Seriously do people still do this?

  • TurtleSauceGaming
    TurtleSauceGaming13 dagar sedan

    Dear god man, let your dog out of the jeep! he looks so sad in there!

  • Roni92pl
    Roni92pl13 dagar sedan

    So nobody is going to mention that little fact of getting car now with financing vs getting it in 5-10years of saving with cash? Ffs, if everyone buy car withhout financing youll still see most of cars from 90' on todays roads. Thats just not realistic thinking. Who tf have 40k usd in spare cash??

  • Jones 0
    Jones 013 dagar sedan

    Driving an 08 Corolla owned - I’m watching this because I test drived a Model 3 Last week, I’m itching like a dope fiend I can’t pay cash… and my sources of income is a joke Not happening I want a tesla…😔

  • paddyballgame
    paddyballgame13 dagar sedan

    Doug your monthly car payment could be going into those same index funds over the term of your loan. If the market goes down in the future, you would benefit from dollar cost averaging.

  • Aki Lesbrinco
    Aki Lesbrinco13 dagar sedan

    Excellent advice. I've been thinking about this a lot lately. My wife's old Nissan rogue is pretty long in the tooth and we decided to buy her a new Venza. I've been considering the possibility of buyng it cash. It might be best to finance it.

  • Andrew
    Andrew13 dagar sedan

    Just traded in for a newer used car, got an interest rate of 2.3% and about 20% more for my trade in than I would have six months ago. Have a bunch of student loan debt with interest rates that are triple my new car loan rate, so I'm taking what I would have put down in cash and paying off other higher interest debts and investing in the stock market. Another benefit of financing is wanting to get into luxury/performance cars - its a bit easier to do if you show progression in financing higher and higher amounts over time. You're not going to walk into a Porsche dealer to finance a 911 Turbo with little to no money down if the only thing you've ever financed was a VW Golf.

  • vap0rtranz


    Dag sedan

    that is generally OK approach. if old car is a lemon, get a new(er) one. and if you've got high % loans elsewhere in your bag, pay those off 1st to get rid of the wasted interest. if down payment is small, OK. but you could have bought used and put the rest of that downpayment to pay down debt more. so say the buy-in-cash folks. there's another school of thought that says to pay off smallest loans 1st, even if they're lower %. it depends on your cash flow. having more cash on hand is best. move that cash around to attack wasted money (so interest) as quickly as possible.

  • Rich Foley
    Rich Foley13 dagar sedan

    Don't finance 100% of a new car because then you need GAP insurance.

  • shakeal huggins
    shakeal huggins14 dagar sedan

    The real problem is full coverage insurance. If you have an auto loan they'll require it. I'd rather have a car that I can crash and buy another than buy an expensive car with higher insurance (especially here in NYC)

  • Noah B
    Noah B14 dagar sedan

    On the safety aspect I agree, my personal car is a 2000 Rav4 and it was cheap, and is a fantastic car. My company truck/daily is a 2014 F-150 and oh man driving the Rav4 from that feels like a tin can!

  • 308328928
    30832892814 dagar sedan

    where's that review? 00:45

  • NukeDarfur
    NukeDarfur14 dagar sedan

    This video is so 2007.