Friday, April 16, 2021

Is It Better to Finance or Pay Cash for a Car Purchase?

 

When you buy a car at a dealership, you’ll have the choice of paying in cash or financing the purchase by taking out a loan and making monthly payments. Our Honda financing center near Sherman Oaks, CA can help you make a decision based on your individual budgeting needs.

Paying in Cash

If you have enough cash on hand to foot the entire cost of purchase, then paying in cash upfront is certainly an option. Even if you have enough cash, be sure to ask yourself:

·       If I pay in cash, will this affect my ability to manage other expenses, such as my mortgage, utilities, etc.?

·       Will I have enough money in the bank for emergency or unforeseen expenses?

If neither of the above questions are an issue, then paying upfront in cash can be beneficial and save you the interest associated with a loan. Another facet to consider is insurance. If you elect for just the minimum liability coverage with lower payments, you can do this with a car that’s yours and fully paid for. If you’re still making payments, you’ll require more than the minimum liability coverage.

Financing

Financing a car purchase can be more beneficial than most car buyers realize. Consider these possible advantages:

·       You have existing good credit that may qualify you for a low-interest loan or cash-back offers.

·       If you have a less-than-stellar credit history, you may still qualify for a decent loan offer. Properly managed, timely payments can help raise your credit score over time.

As you can see, it really comes down to your own specific financial situation. At Keyes Honda, we provide financing offers on all Honda models, including the Honda Insight and more.

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