we fix money login

we fix money login

For prospective car buyers with a lot of extra cash on hand, a question they may have is whether it's more profitable to buy a vehicle with cash or whether they should finance it with an auto loan.

Naturally, there are pros and cons to both of these options, but the biggest point that car buyers need to contemplate is that of lost opportunity cost (LOC).

LOC refers to the potential future grown on a sum of money that is lost upon being used for something else. That may sound confusing, so it's best to tackle this concept with an example.

Buying a Car with Cash

Consider a man who has $30,000 in an investment account that has an annual return of 4 percent. Every year that money is generating roughly $1,200 in interest alone. If the man takes his $30,000 out of the investment account and diverts it to the purchase of a vehicle, he will not only lose the $30,000, but he will also incur an LOC of $1,200 per year.