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Old 08-11-2012, 12:28 AM   #22
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Join Date: Mar 2012
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Location: Marion, IA
What I Drive: 2012 Ford Focus S Ingot Silver

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Heres the deal I got...

Back in 2008 after my cavalier was paid off.. I just started putting 500 a month in to a Total Stock Market Index Fund... until March of this year when my old 2003 Cavalier started to fall apart...

When I went to pull the money out of that mutual fund to buy my new (used) Focus, I had a 1900 dollar capital gain on the shares of the fund i sold.
Figuring what I spent on the car plus my trade which wasnt near as much as i hoped.. but not bad considering the clutch was gone and the front end was worn out.

Turns out it was like a 13,000 car loan in reverse with a 12% interest rate... I spent only 11,100 of my own money and 1900 in capital gains...

Only draw back is next year when i have to pay 5% capital gains tax on that $1900...

the interesting thing is .. that mutual fund after buying the car still had over 25 grand in it...

For those with high interest car loans, this is something to think about..
that car loan is costing you a fortune..
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