ThirtyOne
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- Apr 18, 2017
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- Chapel Hill, NC
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- 2021 JLU Rubicon, 2017 Chevy Tahoe
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- #16
I had to go back and revise my answer on the down payment question. Something was nagging at me and I went back and worked it through and realized I had missed the boat. I will do a detailed post at some point with real examples.
Edit again. I still don't think I got it right which should tell you how shaky the conventional wisdom is. I think it is actually that they think you will pay money down and lose your equity if the car is totaled when the down payment doesn't change the financials that much anyway. Or that you could have gotten more back through gap insurance if your car was totaled. The conventional wisdomists sure do spend a lot of time thinking about the extremely unlikely scenario that your car will be totaled in the middle of your lease.
I will do a detailed post on this because it is pretty fascinating how this very boundary case has become the prevailing wisdom on the subject.
Anyhow, for some reason paying money down, increasing equity, reducing interest, gaining a tax benefit on a trade, reducing your monthly payment, and just basically doing all the things you are supposed to do on a loan are somehow bad because the conventional wisdom people suddenly realized that a car is a terrible investment. But only if you total your car on a lease. Go figure.
Edit again. I still don't think I got it right which should tell you how shaky the conventional wisdom is. I think it is actually that they think you will pay money down and lose your equity if the car is totaled when the down payment doesn't change the financials that much anyway. Or that you could have gotten more back through gap insurance if your car was totaled. The conventional wisdomists sure do spend a lot of time thinking about the extremely unlikely scenario that your car will be totaled in the middle of your lease.
I will do a detailed post on this because it is pretty fascinating how this very boundary case has become the prevailing wisdom on the subject.
Anyhow, for some reason paying money down, increasing equity, reducing interest, gaining a tax benefit on a trade, reducing your monthly payment, and just basically doing all the things you are supposed to do on a loan are somehow bad because the conventional wisdom people suddenly realized that a car is a terrible investment. But only if you total your car on a lease. Go figure.
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