Well, consider my scenario. I purchased my 2015 as a demo model, which knocked $16000 off the list price and then took out a loan with Hyundai for the MAX term available - 8yrs. Why? Perhaps I am mad.
Their loan interest rate was 1.9% for 8yrs. I had the funds available to pay the car in full, but I decided to keep those funds invested. I've now had the car just over 2yrs and during that time the funds left in the investment have grown over 25%. If I would have pulled the funds from the investment to avoid paying the 1.9% car loan interest I would have lost out on a substantial gain. This combined with the fact that I write off the majority of my car loan interest as business expense (making my out of pocket interest rate approx 1.1%) it even makes more sense.
If I choose not to keep the car I really don't care if the loan is more than the vehicle's worth and will liquidate enough of the investment funds to pay off the difference between the trade in value and loan. I might just be able to do that by cashing in only part of the gains accrued while owning the car and never actually touching the funds originally earmarked as car money...
obviously there are always circumstances that make it worth while for an individual, exceptions to the rule so to speak. My father was prone to doing the same as you, he would only finance something (car, house, or otherwise), if the loan interest rate was lower than what his money was earning in an investment/CD/Mutual Fund/whatever.
me personally, I just can't fathom an 8 year car payment, I change cars too often, 3-4 years on average, and I prefer to buy demo models or 2-3 year old lease returns with low mileage so I don't have to worry too much about taking a big depreciation hit. I will pay cash if I can and like you and my father if the money is earning more than the loan interest, then I will finance it, but never more than 48 months.
Even with my house I couldn't fathom a 30 year loan. I put 80% down (that I have saved and invested over 12 years) on the house and did a 5/5 ARM though my CU, paid it off in 5 years and then refinanced another 5/5 ARM and pulled some money back out to remodel the house, and again paid it off in 5 years, and refinanced again with another 5/5 ARM pulled some money out for various things and have 2 years left on the current mortgage. I've paid my house off completely 2 times since we bought it in 2006 never carrying a loan for more than 20% of the value of the home, don't like carrying any more debt than necessary and I like my payments to equal no more than 2 weeks pay, I like being 50 with near zero debt and not have to stress paycheck to paycheck.
My father died 18 years ago, but over the course of his work life of nearly 50 years he retired from 3 companies, with his investments and retirement programs, he lived comfortably retired from 1993 until he passed, and my mother has been living comfortably retired since 1993 is in her 80s and has enough to live off of for another 30 years easy, and Dad never made a lot of money, the max he ever made from a job was $52K in 1993 when he retired, he just never carried any debt, invested wisely and saved like a crazy miser.
