Do you prioritize the investment return rate (expected) or the interest rate of a monthly payment? I know its discussed a lot in respect to paying off mortgages.
I want to save for a new car over the next 12months. I have a 2009 Prius going strong with 150k miles, but I think its a good time to sock away funds for it. My gas and mileage is paid by work, so I'm making money driving. I've never needed anything beyond routine maintenance.
I can put away 15-20k for a newer car by Xmas next year. Not really sure what I want, so wide price range.
OR I can put that money into investments and get a car with a low interest rate when the time comes.
I know the investment return is higher than the interest rate on the car. But then a car payment is for 3 yrs and what if I had a job loss or something? that makes owning a car outright a better situation.
AND if I don't need a new car at that point, I was thinking I should take half of it, invest, and continue to rebuild that car fund each month.