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Do you tell people you paid cash for your car?

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  • Do you tell people you paid cash for your car?

    My spouse and I recently purchased a new car in cash. It was approx a $50k purchase.

    -Friends of ours have asked if we leased or purchased.
    -While shopping and discussing cars, people have commented on how various upgrades or a newer model only "costs $x per month." Since not applicable to us, I did mention, "oh we plan to pay cash."
    -One close family member commented on financing rates and I mentioned that we were paying cash to him too.

    My spouse is uncomfortable telling people we paid cash, but I had just assumed if people asked I would be honest. In the examples above, I did feel a bit uncomfortable after disclosing our method of payment. I'm not inclined to lie, but most people around us earn significantly less than we do and don't prioritize saving/investing the way we do.

    What do you all recommend? Would you be open about this or attempt to conceal it to people around you?

    We are in our mid 30s and I've only been out of residency 2 years, so these sorts of issues are quite new to me.

  • #2
    Most people do not pay cash for new cars. I subscribe to the stealth wealth school of thought. Minimize the knowledge of your financial life, even among those with equal incomes or close friends and family.

    In your situation I would never volunteer such information. I don't like to lie about anything. So, I would generally decline to answer such questions. My favorite response to income/net worth queries; "more than most, less than some."

    I never divulge what I paid for a vehicle purchase. They be able to guess a range based on the make, model, trim and options, but it gets you in the habit. Also, I never divulge the means of payment (cash, loan or lease) for payment amount if any.

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    • #3
      It's really nobody's business. If they asked directly, I would be truthful but if they were just talking about interest rates and whatnot, I wouldn't necessarily volunteer that information. Generally, I never volunteer personal information but if asked directly, I usually won't lie. Also depends on the person asking.

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      • #4
        I also endorse stealth wealth. A fancy brand car attracts more interest than a Toyota.

        So if one purchased a new Audi or Mercedes for ~$50k cash, I wouldn't mention that. But if one purchases a Toyota for ~$30k cash, it's probably ok to mention -- no one is jealous of buying a Toyota with cash, even thought the difference is only $20k.

        Talking with family members, maybe this opens the door to talk about saving more. Or, maybe opens the door to unwanted "loan" requests

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        • #5




          Most people do not pay cash for new cars. I subscribe to the stealth wealth school of thought. Minimize the knowledge of your financial life, even among those with equal incomes or close friends and family.

          In your situation I would never volunteer such information. I don’t like to lie about anything. So, I would generally decline to answer such questions. My favorite response to income/net worth queries; “more than most, less than some.”

          I never divulge what I paid for a vehicle purchase. They be able to guess a range based on the make, model, trim and options, but it gets you in the habit. Also, I never divulge the means of payment (cash, loan or lease) for payment amount if any.
          Click to expand...


          exactly.  shrug shoulders and let them conclude what they want.

          wrt income questions, "it's all relative."

           

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          • #6
            I don’t drive anything glamorous, but I have an Odyssey, which can be expensive. The suburban crowd is pretty jealous of them.

            We paid cash for a slightly used one — the money came from the sale of our home as we moved to a new one.

            A few times I’ve been asked if it’s paid off. I usually just tell them we paid it off quickly. I think I did tell my dad we paid cash because I thought he would appreciate it. It does feel awkward though.
            An alt-brown look at medicine, money, faith, & family
            www.RogueDadMD.com

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            • #7

              1. Did you pay cash or finance? A: Wow, that’s kind of a personal question. Why do you want to know? Hey, who do you think will win the game tonight?

              2. Comments on various costs of upgrades: Response: Wow, that’s crazy or Yeah, I heard about that.

              3. Comments on financing rates: Response: Yeah, There are some real deals out there if you dig for them...or...Yeah, rates are on the way up.

                • Follow up response: did you finance? A: Wow, that’s kind of a personal question. Why do you want to know? Hey, who do you think will win the game tonight?



              Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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              • #8
                I think your response should be somewhat vague when talking to someone who makes less than you do.  I would be careful about telling hospital employees (non-physicians) and office staff.

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                • #9
                  I think a car is a relatively small purchase unless you are talking of a Lamborghini or Ferrari.

                  I think there is nothing wrong in telling we paid $50K cash for our Acura MDX hybrid (wife's). At least teach them a lesson on depreciating assets and that financing on top of that is even more stupid. Never mind that 0% deals come with higher up front purchase cost or lease terms.

                   

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                  • #10
                    Great answers and deflection attempts;  being humble going in makes honesty a lot easier.   I usually say things like, 'yeah, I was fortunate enough to be able to pull this off for us'

                    It's hard when you have an earning differential between friends and family, and anticipate it to continue if one gets nicer things than the surrounding norm.  A $50k car isn't really outside the bell curve unless you bought a $50K camry.

                    Just to throw in controversy against a solid no debt strategy.  Financed our Tesla 3 at 2.04% x 60months.  Could have paid cash, but that's money out of market not earning $$$ to pay for the insane insurance hike coming with the teenager getting her license soon.    It also gives you honest cover for those conversations that make you and the wife uncomfortable at this time.

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                    • #11
                      This post reminds me of something I've been wondering about: Why is personal personal (not a typo) finance such a touchy topic? It's almost like a taboo for many people to talk about their finances.

                      I think it has to do with peoples' tendency to judge others based on what they learn about their finances. Then they will either consciously or subconsciously treat them differently based on what they learn. At the same time, I know many people whose identity and self-worth is tied to their finances as well, which makes it difficult to share, or fosters a tendency to overshare.

                      What would you say?

                      This actually bugs me because we can learn a lot from open discussion. @EMDoc, the people you told you paid cash could have learned something so valuable from your decision.

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                      • #12
                        I can tell you we are going through this right now. We have purchased two new vehicles in the last year to update aging cars and accommodate our three car seats for the kids. While I did tell people we bought when they asked, I didn't tell them we paid cash. I just say that hopefully in a few years we can get these cars knocked out and have no car payments. They don't need to know we don't have a payment right now. We are in the same boat that the majority of our family and friends don't earn at our level, but it doesn't mean you need to totally lie or rub it in anyone's face. Be glad you're in the situation you are in and silently enjoy your accomplishments. We are months away from paying off med school loans and I originally wanted to take everyone out for a fancy dinner but I think it will be awkward so we're gonna just take our 3toddlers out for ice cream and tell them! Lol

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                        • #13
                          You first answer the lease/purchase question.  If the questioning continues about financing options, I would get on a soapbox and say that I disagree with the notion that we should calculate if we can afford something based solely on monthly payments.  It is a 50k car, at some point you are going to pay that 50k for that car.  I chose not to pay interest on that 50k.  Anyone can do it.  If they can afford the payments on a 50k car, they can certainly save those payments before they buy the car for the same term and then pay cash.

                          You decided to buy an expensive car, so the elephant is already in the room.  They can already see it in the driveway and driving down the street. So what's the big deal?

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                          • #14
                            Y'all must hang out in different groups than me.  I've owned 3 cars since graduating from college and the issue has never come up, aside from the context of paying the seller.

                            Of course, I'm pretty antisocial...er, introverted.

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                            • #15
                              Many non-physicians think every doctor is rolling in it anyway.  I don't know that telling them you financed your car vs paid cash is going to change that perception.

                              Personally, I think it's a tacky question unless there is a real need to know.  If someone asked me, I would say something to the effect of "I really didn't want to have any more debt so I saved up until I could just buy it."

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