The only reason I'd pay cash would be if money was so far from being an issue that 40,000 was simply immaterial (0.0something of a %) or if liquidity was my first priority and I could afford that kind of cash.
Sure you could invest the money you have up front, but investing is long term, and if you're tied up in a CD or in portfolio that happens to be down in the short, and disaster strikes.... you're gonna get hit with penalties and loss. If you're car is leased, you'll take even more of a hit. If you're tied up in a loan, you can sell and eat whatever that may be, less than a lease for sure though. But if you're car is already paid for, you can cash out with only depreciation loss, keep your portfolio so it can regain its money, and finish any termed deposit.
On ANOTHER side note, the best way to avoid depreciation is to buy a low mile-used car and not take the 20% "off the lot" avg. loss.
So in reality, if you pay cash for a used car its not all that bad. Depends, again, on the particular financial situation you're in.
ON ANOTHER side note. Capital One and ING Orange are both decent online savings accounts, with 2.5-4% yeilds. So if you want something flexible, and can deal with the restrictions on withdrawals and in some cases mediocre customer service, I'd reccomend them.
Last edited by 2005_330xi_BMW; 10-25-2005 at 07:46 PM.