Buying a car is a big decision. While you can opt to purchase a used car and spend less, you may then be buying someone else’s problems. Let’s face it – there is no way to be certain you are getting a good deal when you buy a used car – these are most often ‘as is’ situations.
So, with that thought in mind, you may be asking yourself: Should I spend the cash I have, or should I finance my car?
Why Using Cash May Not Be a Good Idea
Cash is hard to come by – very few people have thousands of dollars just sitting in a savings account. But if you do, you might be considering paying cash for a vehicle.
Using your green bucks to acquire a car will limit the quality of car you can purchase, particularly if your cash is limited. Although a cash buy may result in having no car payment, you may end up with more repairs.
But, if on the other side of the coin, you have plenty to invest, using cash can limit you on other advantages only available through financing.
Car Loans
Taking out a car loan will enable you to buy a nicer, more reliable vehicle with a warranty. Financing usually includes a rebate which actually lowers the cost of the vehicle. There are many low or no interest financing options available.
If you qualify for this type of car loan, it takes the guesswork out of what is best – why spend your savings when you can finance? On top of that, most car dealerships are not motivated to give you a better deal because you are paying cash.
