I’ve only recently been mingled into this subforum “Financing.” I came across it by chance and find it very interesting what I’m reading here. I’ve found out that there are, of course, funding supporters, but also opponents. In the camp of supporters there are those who choose funding for various reasons, but are aware of what they’re doing. And then there are those who obviously work for them. I would like to make the following calculation example especially for those who want to think: Let’s assume that someone (person A) wants to buy a new car worth 25,000.- Euro, so typically a well-equipped car of the compact class or the lower middle class, is a wurss. Could also be a younger used car, doesn’t matter. He (or she) already owns a 6-year-old Wa This car has a current value of approx. 7,500.- € and is available as a deposit for the new car. Further financial resources are not available, nothing has been saved. The missing difference of 17,500.- € is to be financed over 3 years. Person B wants to do exactly the same, has also the same used car, but has already saved 17.500.- € and pays cash. Question: What is the financial status of person A and B? after three years? Premises: – Only the difference should be considered, i.e. the 17.500.- € advantage, with which person B enters the race, are then deducted again. – The saving on person B was possible, because person B at the beginning of the car career cycled for several years, when person A already drove the first car (…or B has driven an ancient grotto for several years, or what do I know, doesn’t matter). – Both people have always otherwise ex Act the same net income! – However, for the next 3 years Person B will invest exactly the amount that Person A is involved in financing into an open real estate fund with a guaranteed return after tax of 5% (not taking into account expenditure surcharges). i.e. the monthly additional charge should be exactly the same for both persons. – Person B should have advantages over Person A in the negotiation of the actual purchase price as cash payer. – To compensate, we assume that in return Person A can finance the vehicle at 0.0%. Person A: – Starting status Used car value 7,500.- € – Monthly burden due to financing: 17,500.- / 36 = 486.- € – Status after 3 years: Used car with 50% residual value= 12,500.- € – Asset growth in 3 years so: 12,500 – 7,500.- € Person A has after 3 years an improved asset by 5,000.- € person B: – initial status used car value 7,500.- € + equity 17.500.- € – monthly saving rate 486.- € in real estate fund/ return 5% – status after three years: used car with 50% residual value= 12,500.- €. Capital in the fund approx. (interest rate not taken into account on a monthly basis): (((((486*12*1.05)+486*12)*1,05+486*12)*1,05 = 19,305,- €. increase: 19,305,- – 17,500,- € 1,805,- – asset growth in 3 years: 12,500 – 7,500 + 1, 805= 6,805,- €. After 3 years, person B has an improved asset status by 6,805.- €. Thus, after 3 years, person B stands by 6,805,- – 5,000,- = 1,805.- € better there than person A, although person A has financed 0.0%! Over a longer period of time, the whole would look quite different, since because of the interest rate effect, person B with its financial status exponentially distances itself from the status of person A. The above invoice is also very ko The reality is that the result is even more in favour of person B. The wealth growth of person A will also be eaten up quite precisely by inflation, i.e. it will not be able to afford a better car next time due to the fact that it now has 5,000,- € more. Its newer will cost about 30,000,- €. Again, both people earn the same thing, drive the same car and otherwise have about the same amount of money. I don’t want to demonise the financing! You can also come up with the idea, even though you have the equity to finance anyway (I have already done so myself), because you expect better rates on the capital market (as in the example) or on the stock market, or because you want to remain liquid, for example. However, this should be reserved for those who are familiar with this gambling. However, for me financing is always a temporary one. r process, and never a permanent solution (according to the motto: from one financing to the next). The banks among you may forgive me my superficial calculation; it should be a model of vision. I am an electrical engineer. So…and now take me apart!!!!!!! Greeting Stuby