Finance nerds - get a free car!

My FIL just bought a new car, and mentioned that with 0% financing he's much better off keeping his principal (and having it earn money) than he is paying cash. This gave me a thought: what rates do you have to hit to have the car payment paid 100% by the interest you earn on your principal, and therefore have a 0 cash flow car?

Turns out, it's pretty simple. If you assume you can get a 0% financing loan on the new car, then it just comes down to the term. 

• 60 month loan means you need to be earning 20% on your principal
• 72 month loan means you need to be earning 16.667% on your principal
• 84 month loan means you need to be earning 14.286% on your principal

Now, of course you still actually spent the money on the car so the opportunity cost blah blah blah. But if you've got the cost of the car already in an asset that returns the amount above, you could have a cash flow "free" car!

NERD!

Statistically, 10 years.

Robbie (Forum Supporter) said:

 

• 84 month loan means you need to be earning 14.286% on your principal

 

If by some grace of god you manage a consistent 14.5% over 84 months screw getting a free car. Someone should be paying you 8 figures a year already to pick stocks and you have been on the run of a lifetime.  

Also no reduction for sale of the car at the end. If you sell at 50% the new cost at month 84 they you only need to pull 7.45 or so over the same period which is doable but not without individual stock purchase. Definitly not a set it and forget it vaguard account.