Harrisonburg Auto Financing: Should You Pay Cash for A New Car?
It's a hotly debated issue between consumers and financial gurus, is it better to pay cash for a new or used car?
Or should you consider a Harrisonburg auto loan financing option? The short answer to both is, it depends.
Basically, there are 3 ways to buy a new or used car:
--Finance the vehicle
--A blend of the first two
That's why getting the "best deal" on a new vehicle really comes down to your finances, your monthly budget, and your future plans.
There are plenty of vehicles to buy up and down the Harrisonburg Motor Mile! So, let's take a look at the advantages and disadvantages of each method for getting into that new vehicle.
No Auto Loan Financing: Paying Cash for Your Car
By far, paying cash is the preferred method for most people when buying a new vehicle, although it's not always in reach.
If plunking down a big chunk of money won't deplete your emergency fund, reduce your ability to save money for big ticket items like a new home, or interfere with your ability to pay your monthly bills, then this is a good way to go.
Who doesn't want to own a vehicle free and clear right from the start? Plus, budgeting for a new vehicle will keep you from spending more than you can afford.
However, some experts believe you should never pay cash for a car. Their thinking is that you can invest that money and make more with your investments than you will in the interest payments on the loan.
On the flip side, that means you have to be a great investor and that the economy has to continue to grow. While theoretically it's good advice, it's not good for everyone!
If you're buying a used car that doesn't have a big price tag, then paying cash is a good option. You can avoid the the necessary paperwork for used car financing.
If paying cash prevents you from taking advantage of financing incentives like cash back, do the math to be sure it makes sense to finance.
Also, if you've got the discipline to take advantage of a dealership's 0% offer, and you know you'll make your payments religiously, AND you won't spend the cash you've put aside, then that offer could save you some dough.
You can leave your money in a CD or savings account until it matures. Yes, you'll have to pay taxes on it, but you'll come out ahead in the long run.
Auto Loan Financing
If paying cash isn't a good option for you, there are many auto loan financing options on the market.
Here at Joe Bowman Auto Plaza, we have a wide network of lenders. That means we can usually find the right lender to match what you need for comfortable monthly payments.
If you have your own personal line of credit, that's another solid way to go. Credit lines typically have low interest rates with flexible payment plans.
And if you've had bad credit in the past? We've got good options for you as well.
Because we do have such a good variety of lenders to choose from, we can shop around and find one that won't gouge you on interest.
This will allow you to build equity, helping to restore your credit. Check out our bad credit auto loan program to learn more.
Down Payment and Financing
Making a large down payment is another smart way to go. This allows you to reduce the size of your car loan, potentially shorten your loan, and the amount of interest you'll pay.
Each dollar designated as part of your down payment is that much less you'll have to pay on interest.
So what's the bottom line? Simply, that there is no "right" way to buy a vehicle. It all comes down to what works for you and your monthly budget.
The real bottom line is preserving and growing your credit, while still allowing you to enjoy your new car without stressing out over payments!