Keeping Car vs Selling it to Invest?

[OctopodeClub]

For investors like us, everything is different...

Others might see my car, which is completely paid off, as a $0 monthly bill. I see it as a depreciating asset which could be put to work instead of just sitting!

In other words, wouldn't I be better off;

1. Selling my car
2. Investing that money @ 5% annual return
3. Using those returns to get a new vehicle (purchase or car lease - a lease would probably be best in this context as it would further free up monthly cash flow to be invested).

This way, the depreciating asset could instead be turned into a producing asset?

For example. 5% yearly investment return on $30,000 is ~ $1,500 / 12 months = $125 per month which I could put towards a new car lease. That would mean there is $125 unrealized gains by my car just sitting (and this is without counting the ~$1,000 depreciation / yr and repairs since my current car is 8 years old... and German).

 

[Jones75]

Unless you can do a serious write-off, forget leasing. Better off buying with 0%-1% financing.. $30,000 depreciating equity in a car is too high for most people. Your $125 per is free money, without lifting a finger…zoom, zoom…

 

[viruscore1]

Unless you can do a serious write-off, forget leasing. Better off buying with 0%-1% financing.. $30,000 depreciating equity in a car is too high for most people. Your $125 per is free money, without lifting a finger…zoom, zoom…

When a car is purchased, taxes are applied on the purchase price and paid upfront. Leasing a car, taxes are applied on the lease payment. The author's model will work but 5% annual return is not enough, a seasoned trader should average 2% per month. I've been doing this for years.