Shopping Tips

4 Reasons to Pay Cash for a Car

If you can pay cash for a car, you should. It’s a transaction with simple mechanics.

When you pay the entire purchase price without a lending package, you won’t get socked with the interest charges on top of everything else. You can expect to pay 10% to 20% more for the vehicle with a 5-year loan.

Although the average price of a vehicle today is north of $30,000, the only reason to consider not paying for everything on the day you take it home is that you receive a no-interest loan.

If you have a 0% loan, it works as well as cash upfront.

Why Should I Pay Cash for a Car?

1. You’ll get more discounts.

If a dealership offers a 0% APR financing package, you might get the choice to take a rebate if you can pay cash. It’s also easier to negotiate a better price for the vehicle because there’s less work to do to complete the transaction.

2. It encourages personal financial discipline.

When you save up the money to pay for a vehicle in cash, you’re creating a life skill that influences other life areas. It gives you control over the impulses that can tempt you to buy things you don’t need, enabling your brain to focus on your long-term goals instead.

3. You can prioritize other financial goals.

Paying cash for a car forces you into a budget where each cost must have meaning. By creating a zero-sum ledger where everything you earn gets accounted for, you’ll structure your financial picture to support current and future needs.

4. It gives you access to other features.

Since paying cash lets you take the vehicle from the lot, you can shop for specific features you want in the new car. Although it might take some time to find the perfect one, you’ll know that you are getting a fantastic deal.

Paying cash for a car can save you time and money. Although it won’t give your credit score a boost, you’ll still have fun getting behind the wheel.