Great Reasons to use a Car Loan In Flamborough

Great Reasons to use a Car Loan In Flamborough

Posted on July 1, 2021

Not many of us has the cash around to buy a car outright. Even if we did, sometimes paying cash isn’t the best option and using an auto loan has more benefits. That’s what we’re discussing today. Our Flamborough auto loans team is going to outline some key reasons to use a car loan, and why often times it makes more sense than paying with cash

Financial flexibility

One of the main reasons to use a car loan is financial flexibility. Unless money really isn’t a worry, buying cash would likely empty your reserves. It may even leave you with no savings.

We would recommend using some of that money as a down payment and use an auto loan for the rest. That way, you still have savings for emergencies, you still get the car you want and you have a manageable monthly auto loan payment too.

Tax deductible for business owners

If you run a business, are self employed or a contractor, an auto loan can be deductible. Much depends on the business formation and how much you use the car for work but your accountant should be able to make the car deductible while staying within the rules.

Buying a car with cash can also be deductible but this way, you keep your savings and the money for the loan comes out your tax fund instead.

Predictable outgoing

A Flamborough auto loan is a set amount per month for a set number of months over a set term. Nothing changes unless you want it to so you always know what’s going out and when.

This predictability makes budgeting easier as you’ll always know what you have going out and what you’re likely to have left over each month.

Helps build your credit score

Auto loans can actually help your credit score. Those monthly payments you never miss will all contribute to your payment history. That can make up to 35% of your credit score is can make a real difference.

The loan also adds to your credit mix, which is a minor contributor to your score. If you’re trying to improve your score, an auto loan is a long term, predictable way to do it.

Drive a better car

Unless you have significant savings, you will likely be able to afford a much nicer car if you finance it. Buy something newer or more luxurious or sportier, whatever your tastes, but you will likely have much more of a choice when you use finance over cash.

Cars are expensive and unless you have lots of savings, financing is the main way you’re going to pay for that car.

It may seem like a no brainer to buy a car outright if you can, and it may be, but in some circumstances, auto loans can make sense too. Much will depend on your particular situation.

Contact Unique Chrysler for help, advice and competitive Flamborough car finance and leasing.

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