Most financial advisors say not to finance a car if you can help it, pay cash if possible. But does it really matter?

Let's say there are two guys, Joe and Moe. Both work a day job and are middle class. Joe takes an auto loan to get a new car and pays it off for five years. Moe on the other hand spends five years saving an X amount of money every month until he has enough to go to the dealership and buy the same car... show more Let's say there are two guys, Joe and Moe. Both work a day job and are middle class.

Joe takes an auto loan to get a new car and pays it off for five years.

Moe on the other hand spends five years saving an X amount of money every month until he has enough to go to the dealership and buy the same car outright.

Either way, they both paid the money for the car, and they both had an X amount of money earmarked for the car every month for five years.

Does it make a difference if you're Joe or Moe?
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