<prompt> Human: Ive been saving for the past 3 or so years for a new car as my current one is about to die. Ive worked out the exact OTD price 26k with the dealer, but people are telling me that I should take an auto loan with minimal downpayment and invest what I have. That the returns Ill make will be greater than the interest rate on the loan. However, the way I see it is different.Im 23 with minimal credit history. I paid off all my student loans before the grace period was over and Ive had a credit card for about 1.5 years now. So I cant imagine my score being decent enough to get a low rate. But lets say I get my parents to cosign the loan so the rate would be what? Roughly 3.5? The cash on hand would have to go into a taxable account IRA already maxed into most likely the 2055 Vanguard TDF. So thats any applicable commission trading fees on taxed income off the bat. Then theres the fee for getting it out plus any capital gains and expenses on that. These costs go on top of the loans interest rate and gap insurance Id need to purchase as well. Plus thats all not counting the fact that Im betting that there wont be another bear market soon. But I dont think having a bear market would matter for the money invested since I wont take it out until retirement. Id still have to make those monthly payments anyways.Plus, these are people who say that I could also take out an auto loan and make the minimum payment for anywhere from 1 month to 1 year. Then pay the rest of the loan off to build credit. The same people who believe that I should keep a balance on my credit cards to generate credit bc by paying off my balance at the end of the month each time, Im not building much credit. Its because these people believe in something like that leads me to believe that they are all misinformed and that I should just pay the car in cash.  <response>: Have you considered buying used? Even the most reliable cars depreciate 40 to 50 in the first 4 years. The 26k car you are thinking about will likely be worth around 13k in 4 years. If you have mind set on a new car for whatever reason, great. If not, and you want to make the most financially savvy decision, look at late models 201011 with high ratings for reliability and at or under 50,000 miles. Youll save thousands of dollars and have a car with plenty of life left. Dont let anyone talk you out of paying cash. If you feel more comfortable paying cash, pay cash. People love to compare apples and oranges when it comes to borrowing vs. paying cash. Your auto loan rate is guaranteed. Stock market returns are not. If your auto loan is 3, you must find an investment that guarantees a 3 return and has the exact same maturity to break even. TL;DR: Buy reliable late model used, pay cash. 