A model, not a prediction

Car Investment Simulation

Same car, same depreciation, both ways. The only thing that changes is what happened to the money you didn't spend up front. Adjust the sliders below to see how the numbers shift.

Cost of car $50,000
Down payment $5,000
Loan interest rate 2.9%
Investment growth rate assumption 10.0%
Car depreciation rate assumption 15% / year
Time horizon 5 years

Pay cash

$0

  • Car value at horizon—
  • The payments you never had to make, invested monthly—
  • Car value today (what you paid; not in the total)—

Finance + invest

$0

  • Car value at horizon—
  • The cash you kept, invested for the whole term—
  • Paid to the lender from income (not in the total — it left your income either way; in the cash path it became the investments above)—
  • Of which interest—
At this horizon, financing and investing leaves you ahead by $0
Break-even growth rate — the loan's own rate, compounded the way the loan is 0%
Pay cash — total position Finance + invest — total position

Assumes the car depreciates at the rate set above regardless of how it's paid for, and the loan term equals the time horizon. Rows marked + add up to the total above them; the grey rows are context and are not in it. The two paths are compared like for like: the same money goes in either way, only the timing differs. Paying cash spends the sum today and leaves the monthly payment free every month after, so that payment is invested as it comes; financing keeps the sum invested for the whole term and makes the payments from income. Each path is scored by what you hold at the horizon — the car plus the investments, minus whatever is still owed. Under this comparison the break-even is exact: financing comes out ahead if and only if the investment grows faster than the loan's rate. At 0% growth it is behind by exactly the interest paid. The interest rate and time horizon readouts shift color as a plain-language warning — not a hard rule, just a reminder that longer, pricier loans carry more risk. This is a model to build intuition, not financial advice.