1. Buying A Car

2. Let’s Look At A Simple Case

3. Assumptions Time span: 44 years Car purchased every 4 years Total cars purchased: 11 Cost per car: $10,550 Interest rate: 8.5 No down payments No trade-ins No inflation

4. Option 1: Financing Borrowing Money To Buy

5. Cost to Finance Base Cost: $10,550 4 Year Interest Cost: $1,932 Total Cost Per Car: $12,482 Total Cost of All Cars (11): $138,000 Total Interest Paid: $21,252

6. Option 2: Using A Self-Funded CD Using Your Own Money

7. Using A Self-Funded CD Current Value of CD: $41,071 Assumes 7 year capitalization @ $5K/year Annual Car Payments: $3,030 APR: 5.50% Tax Bracket: 30% Post Tax APR: 4.00% Withdrawal every 4 years for car: $10,550 Balance in CD at Age 69: $258,927.37

8. Option 3: Using A Self-Funded, Tax-Free Account Using Your Own Money

9. Using A Self-Funded Non-taxable Account Current Account Value: $35,960 Assumes 7 year capitalization @ $5K/year Annual Car Payments: $3,030 Withdrawal every 4 years for car: $10,550 Total in account At Age 69: $964,638.00 Nope, there is nothing wrong with your eyes!

10. What Would You Choose?? Bottom Line For The 3 options

11. Summary Cost of financing cars: -$138,000.00 Private Financing with a Self-Funded CD: +$258,928.00 with Self-Funded Non-taxable Account: +$964,638.00

12. That Was A Hard Choice! Ron Doerksen Sustainable Finances 360.306.5642 SustainableFinances@comcast.net