The last couple of years have been big for car sales, with over a million vehicles being moved on a monthly basis. If you’re reading this article, we’re willing to bet that you’re considering adding your name to that lengthy list of transactions.
When you go to buy a new car, you’ll have one of two options. You can finance your vehicle or you can pay for it in cash.
If you have the money to do it, buying a car with cash is by far the better option.
Not sure why buying a car with cash trumps financing a vehicle? Here are a few of the many reasons:
1. More Negotiating Power
When you walk onto a lot and tell a car dealer that you have a check for them sitting in your pocket, they’re going to be more inclined to sell to you. Not only is buying in cash great for dealerships because they’ll get the money from your sale immediately, but it tells them that you’re a serious buyer that’s worth their time.
Feel free to leverage your all-cash status as a bargaining chip to try and get your vehicle’s price down. It’ll probably work.
2. You Won’t Pay Interest
Do you ever wonder why those “cash for cars near me” guys offer their customers cash deals and don’t use bank financing? It’s because when you buy a car with cash, you always get a lower price.
Financing a car means paying a lender monthly interest over the lifetime of your vehicle which will cost you thousands of dollars. When you buy in cash, you can ditch lenders and just buy your car at its listed price.
3. Reduced Insurance Rates
When you’re financing a car, it technically belongs to your lender until you pay it off. Because the car doesn’t belong to you, when you go to insure your vehicle, you’ll be asked to opt into insurance packages that include body repairs.
While it’s probably a good idea to opt into this type of coverage anyway, if you own your car outright, you can decide to just invest in cheaper “liability coverage” and assume the risk of your car getting totaled in an accident.
4. No Need to Budget For Car Payments
Buying a car with cash is a freeing experience for the simple reason that once you drive it off of the lot, it’s yours.
No worrying about interest payments. No worry about a monthly car bill.
There’s something that’s just sort of…liberating about that.
Wrapping Up The Benefits of Buying a Car With Cash
Buying a car with cash will save you money and will make your life easier. If you can do it, our recommendation is to not be distracted by seemingly attractive financing offers and to just pay your vehicle off all in one go.
Believe us when we say that your future self will thank you.
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