Should You Buy a Car with Cash or a Loan in Copetown?
Should You Buy a Car with Cash or a Loan in Copetown?
Posted on August 5, 2021
On the surface, the answer to which is the best way to finance a car purchase might seem simple. Cash is king and is the easiest, cheapest way to buy a car. But it isn’t always that simple and there are times when a car loan actually works out better. Our Copetown car loans team helps you decide if you should buy a car with cash or a loan.
Pros of buying a car with cash
There are obvious benefits to of buying a car with cash.
Free and clear – If you have cash in the bank, you will own the car free and clear. No monthly payments, no not owning the car until the loan is paid and no anxiety over making payments.
Zero interest payments – Not using a car loan means not paying loan interest. Depending on the amount involved, that could mean a saving of thousands of dollars!
No monthly payments – The other obvious benefit of buying with cash is no monthly loan payments. That means more money for you at the end of each month and not having to budget to make sure all debts are paid.
Cons of buying a car with cash
There are downsides to paying with cash though.
Need a lot of savings – The main downside with cash purchases is the requirement to have lots of cash around to buy the car. Not everyone has that luxury.
Use up all your savings – If you empty your savings to buy a car, what will you have left for emergencies? Everyone needs an emergency fund and the moment you use up yours, you know something will happen where you need money…
Pros of buying a car with a car loan
There are definitely benefits to using a car loan too.
Flexibility – Aside from the down payment, you don’t need savings, you don’t need large sums of cash and you can still buy the car you want. You can have higher payments over a shorter term or a longer term with lower payments, whatever suits you.
Build your credit score – Managing a car loan will help improve your credit score. If you’re rebuilding, making payments benefits your payment history, the loan improves your credit mix and successfully servicing a car loan could definitely improve your score overall.
No waiting for savings – If you don’t have thousands of dollars in the bank and cannot wait until you can save, a car loan is your friend. As long as you have something for a down payment, you can drive away a car the same day.
Cons of buying a car with a car loan
Car loans also have downsides.
Interest payments – All loans come with interest in one form or another and car loans are no different. Depending on the size of the loan, that could be a little, or a lot.
You don’t own the car until the loan is paid – You’re not free and clear with a car loan. You’ll only fully own the car once the loan is paid off in full.
As you can see, that seemingly obvious question of should you buy a car with cash or a loan has a lot more going on!
Contact Unique Chrysler for help, advice and competitive Copetown car finance and leasing.
Thanks for reading. Be sure to connect with us on Facebook, Twitter, Instagram, or LinkedIn to stay up to date on our latest great articles!