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Paying cash for a car can cost seniors thousands via depreciation
Yahoo Finance cites CDK Global survey data that about 1 in 5 baby boomers pay cash for cars, while the share rises to nearly 5 in 10 among Gen Z buyers.
Americans who skip auto financing and pay cash may be losing significant value over time, according to an analysis by Yahoo Finance. The outlet notes that a CDK Global survey finds roughly 1 in 5 baby boomers or older pay cash for their car purchases, and that figure rises to nearly 5 out of 10 among Gen Z buyers.
The article argues the apparent savings from avoiding interest may be outweighed by rapid vehicle depreciation. It cites Experian data on auto loan rates for super-prime borrowers, about 4.6% for new cars and about 6.3% for used cars, and contrasts that with Kelley Blue Book estimates that a typical new car sold for about $49,220 as of May 2026.
Yahoo Finance says new cars can lose roughly 30% of their value in the first two years, then depreciate at an annual pace of about 8.0% to 12.0%. The outlet frames this as a long-run cost of paying cash, since the money tied up in the purchase is not likely to be offset by the vehicle retaining value.
The piece also highlights potential opportunity costs versus financing. It says financing a portion of the purchase at roughly 4.0% to 6.0% may reduce depreciation exposure, and it points to an S&P 500 return of about 10.0% annualized since 1957 as a reference for what the cash could have been earning elsewhere.
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