Buying A Car With Cash - Top Reasons Why It Is Better
Buying A Car With Cash
Buying a car with cash is the best solution if you would like to avoid the hassle of taking a loan. There are many situations where you find yourself in need of financing the car that you want to buy by taking a loan. However, to save more money and to own the car outright, it's much better to pay with cash.
As you might know, by taking a loan, you abide by paying monthly payments that include interest. However, if you pay with cash to purchase the car that you are interested in, you save yourself much more money you would have otherwise paid by taking a loan.
Top Reasons Why It Is Better To Buy A Car with Cash
To clarify the idea, here are the top reasons why it's better to buy a car with cash:
- You own the car outright. It becomes completely yours.
- You do not have to worry about future payments because there is no loan or monthly payment. You pay a lump sum payment and that's it the car is yours.
- There is no interest so you can have more savings.
- Cars are depreciating assets, so if you take a loan and pay interest, you are losing money in two directions.
- There are incentives and rebates for people who pay with cash.
- If you are unable to purchase a new car because it may be costly, you can purchase any used car that is a good fit to your budget. Even if you still don't have the money in full, you can wait until you save the required money, then you can buy the used car that you have chosen.
- People who buy the car, whether it's new or used by taking a loan are dealing with the lender every month to pay the monthly payment. But when you buy in cash, there is no dealing with the lender.
- Peace of mind, because the car has become yours outright. Therefore, no one can take it back from you if you become unable to pay the monthly payment.
- You can sell it any time without having to worry about paying off any remainder of the loan.
- Auto loans are not tax deductible.
- If you do your research beforehand, especially online, you can get a discounted price, so you will save much money you would have otherwise spent on interest.
- You will have more negotiating power with the seller, because the price you are going to pay is clear, because it's just a lump sum payment. On the other hand, if you are going to take a loan to finance the car from the dealer, you will most likely be taken for a ride, because the dealer has a relatively complicated pricing system and you may agree on a deal without having a clear idea about every detail of the deal.
In conclusion, as we said, there are many situations where you find yourself in need of financing the car that you want to buy by taking a loan. However, to save more money and to own the car outright, it's much better to pay with cash, even if you have to lower your expectations regarding the type, make, model, amenities or the luxury level you want.
I hope that you found this article helpful and if you have any opinion, please feel free to add it below.
Muhammed F Omran wrote this article about buying a car with cash. For the latest, strategic, to the point and actionable car buying tips, go to http://muhammedfomran.hubpages.com/.