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Today's question comes from Tess in Arizona. I'm looking to buy a new car soon. I'm seeing lots of

incentives, almost $2,000 off when financing. I have the money saved, so what if, oh boy, George,

I financed for the discount, then paid off before the money saved. So what if, oh boy, George, I financed for the discount, then paid off

before the first notice due. Of course, would I be charged interest or any other fees? Is this

considered debt? Genius. Okay, Tess, yes, this is considered debt. I don't know how you could

say I'm financing and it's not debt.

Now, what you're saying is, hey, I have the money. What's the big deal? I'm just taking it. I'm being a smart consumer, getting the discount, and then I'll pay it off immediately.

Well, there's some things you have to consider here. Number one, when you're financing, the dealer can throw in a lot

of different extra fees. They tack on there, but they've distracted you, right, with this little

carrot they've dangled, which is the $2,000 off. Oh yeah, you can hear it. $2,000 off. We don't know.

We don't actually know what a good deal is in this scenario until you really look at the

numbers and you start. And once you're at that point, Ken, once you're across the desk in the

financing office, the party's over. They know they've got you. Oh, yeah. It's a lot of pressure.

A lot of pressure when you get in those offices. And there could be prepayment penalties because

they know people are going to do this. And so they say, hey, you can't pay this off within this time frame. And the other thing is the lender, the financing

office loses the commission if you pay it off in a short window. So there's a lot of things there

to consider. And if you have the cash, I don't know why you're messing with that. I think you're

going to get a better deal. And honestly, I would run from that dealership. It sounds like you're just

seeing this incentive online, but I would go get a better deal elsewhere. A reputable, independent,

used car dealer, you're going to get a better car there. And when you said new car,

I know. That's also a big, it's a big trigger for me, Ken. There's only a few people who should be buying brand new cars, and that is folks with a million dollar net worth and no debt. Yeah. Because the hit you're taking on depreciation is insane. Yeah. New cars lose 60% of their value in the first five years. Yeah. And I just did a video on this, Ken, on my YouTube channel.

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