Originally Posted by
SimMonkey
Stimpy,
My family situation requires four cars. They were all paid off numerous times. I shop interest rates all the time : Penfed, AA credit union, Navy Federal. The last time I refinanced all four into a used car rate of 1.49% for five years. I max out their KBB value. Some banks allow you to borrow 115% of their value. I use this cheap money to invest in items that pay much more. This strategy won’t be as effective as interest rates rise, but I think you could still find five years loans at 2.25 today (I’m just ballparking it). To me, that is still cheap money.
I understood and had inferred the above process but have trouble making the numbers crunch (?)
Example:
> Used car worth maybe $8,000.
> Loan at 2.25 % over 5 years = $8900.00 owed
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> $8,000 invested returns of 10.0 % over 5 years = $4000.00
> $4000.00 - $900.00 = $3100.00/5 = $620.00
So, you clear about $620.00 / year.
Is this an accurate example of what you are doing?
Stimpson