Having a car payment may seem like an appealing prospect, buying your next vehicle with cash may not be the best idea. Even though there is usually an interest rate attached to financing, there are a number of benefits that come with purchasing a car with an auto loan.
Reasons Not to Pay Cash For Your Next Automobile
Maybe you have just received your tax return or experienced another sort of financial windfall, and it occurs to you that it is time to purchase a long-needed vehicle. You could use your cash to buy a cheaper car from a private seller, but there are a few points that you might want to consider first.
- Not having a loan won’t help your credit rating.
If you have damaged credit, getting approved for financing will give you the opportunity to increase your credit score with every timely payment that you make. Buying a car with cash, on the other hand, will do nothing to improve your situation.
- The hazards of depleting your cash.
Having extra cash on hand is highly beneficial. An emergency fund will protect you in the event of an unexpected expense. If you are currently struggling to get out of debt and mend your credit standing, the last thing you
want is an unforeseen bill to throw your plan off track.
- The risk of purchasing an unreliable vehicle.
If you buy a cheaper, older car, there could be trouble down the road. Repair bills can add up to a giant expense if the vehicle has a tendency to break down. And if it becomes completely undrivable, you will be stuck without a car and with no cash to buy a new one.
Do you want a better solution? Get an affordable auto loan with terms that are agreeable. If you have the cash to spare, use part of this money as a down payment in order to offset the effects of depreciation and accruing negative equity. You can put the rest of your cash into savings in order to be prepared for any repairs that need to be made to your vehicle or for any other situation that comes up.
Where to Go for Financing
If you have determined that you would like to finance your next car, but you’re worried that your credit issues will prevent you from attaining auto loan approval, HOverdrive Automotive Center can help. We have already assisted thousands of bad credit buyers and we can work with your situation. Just fill out our fast and secure online application to get started today.