Car purchases are no trivial matter. The cost is large enough to merit careful thought and personal financial scrutiny. All options should be explored in order to come up with the most sensible plan for each individual. For example, one could choose to buy with cash while others might buy with a loan despite having to pay the car loans interest rate. There is no such things as a single correct way to do things. It all depends on a person’s circumstances and other factors at play. Let’s look closer at the pros and cons of each:
Buying with Cash
Only a few people pay for the full amount with cash. It is simply too high for most people unless you are extremely rich, you purposefully saved up for it, or you buy a second hand vehicle. Saving means waiting for a long time until you get your own ride. Getting a second hand vehicle involves greater risk than buying a brand new car. However, all of these may be worth the trouble if you consider the positives of this purchase route.
First, you won’t have to trouble yourself with a loan application. Some people might not fit the ideal applicant because they have a bad credit history, an unstable job, or other ongoing loans. It might simply be a hard time to get an approval because of the economic situation. By using cash, you take back the power through independence. You can buy whenever you want as long as you have the money.
Second, you don’t have to stress about the monthly payments for the next few years. Once you have paid for the car, you can drive it home and never look back. There is no danger of repossession if you miss payments. The vehicle is yours and yours alone. No bank will take it away from you in the event of sudden misfortune.
Third, the lack of car loans interest rate is only the beginning. You can also enjoy an additional hefty discount when you buy in cash just like with any other type of purchase. Some dealerships might even include more freebies for cash buyers. Shop around to see where your money will take you farther.
Buying with Loan
No doubt, it is difficult to save up for a car. Sometimes you simply need it now and not years down the road. Loans provide a route for faster purchase. There is no need to wait until you have enough in your bank account. You can just pay back the lender in small monthly payments which are easy on your wallet.
