Common sense seems to suggest that, if possible, it would be better to pay cash for a car and avoid the expense of credit-related finance charges.

But, depending on the investment climate, paying cash might not be the wisest thing to do economically.

Consider the case of a well-to-do person, the sort who might have plenty of cash for discretionary spending, who decides to buy a $30,000 car.

He could shell out $30,000 and drive the car away free and clear. Or he could finance it.

Suppose he finances it. In a typical deal, he would put down about $6,000, or 20 percent, and finance the rest. That would mean a loan of $24,000, at the current rate of 12 percent for 48 months.

Under that plan, the amount of interest paid by the car buyer over the finance period would be $6,336.61, according to officials of Maryland National Bank, making the total cost of the car $36,336.61.

But if the car buyer invested the $24,000 in a 48-month certificate of deposit at Maryland National's current rate of 8.33 percent, the CD would earn $9,052.64 during the four years.

Bankers say the difference is that the interest on the car loan is paid only on the outstanding principal balance, which declines as payments are made. And with the CD, the opposite happens: The 8 percent applies to a growing principal.

Thus, according to figures compiled by MNB, the investment of $24,000 in the 48-month certificate of deposit would be worth $25,999.20 the first year, $28,164.93 the second year, $30,511.07 the third and $33,052.64 when the CD reaches maturity the fourth year, for a total return on investment of $9,052.64.

The same principle applies to smaller or larger loans.

MNB and other banking and finance officials caution that the cash-payment-versus-cash-investment comparison borders on comparing apples to oranges.

For one thing, while interest payments are tax-deductible, interest returned on investments carries some tax disadvantages.