You’ve found the perfect vehicle and it’s now time to decide how you’re going to pay for it. You might be equally capable of financing or outright buying the vehicle, but which option is preferable to you? It all depends on your means and plans with the vehicle. Follow along with Go Auto Outlet as we go over the pros and cons of both financing and purchasing.
Financing means you have to go along with what the lender works out for you within your payment means. This means having monthly payments, monitoring interest rates and dolling out your money over time for the vehicle. This payment structure means you don’t have to pay the entire price of the vehicle right away, so if your finances are tight, you’re able to spread out the amount you’ll have to pay over time. It’s a simple process that can get you in a vehicle quick. However, the downside of monthly payments is that it ties you down to a contract that must be adhered to. You also have to worry about the interest rates on top of the initial cost of the vehicle.
Purchasing outright is by far the simplest method. You pay the price of the sum that was agreed upon for the vehicle. This means you don’t have to worry about monthly payments and worry about how long you have left to pay until it’s all paid off. If you’re worried about your credit score, paying in cash is a great way to avoid affecting it. Unfortunately, paying in full is not always an option for people if you don’t have enough money saved up. The problem with paying for a vehicle outright is that its price and condition depreciates and makes it less valuable as you drive it. As well, if you don’t have enough money for your vehicle you may end up settling for a different model that you actually don’t want because you can’t afford it.
Financing or purchasing? It all depends on what you want. If you have the money and don’t want any monthly commitments, then pay the lump sum right away. If you want to be more conservative with your money, finance and pay monthly to get on a plan that gets you the car you want at a decent rate.