Should You Finance or Pay Cash For Your Next Car?

Should You Finance or Pay Cash For Your Next Car?

Posted on March 22, 2023

For most of us, financing is the only option we have to purchase a vehicle, but if you do have enough cash to buy a car, should you?

While financing comes with the added cost of interest on the loan, there is the bonus of having more options.  Borrowing money and paying it back over time allows us to buy a better vehicle.  Don’t get too caught up though, make sure you know your monthly budget before talking about a deal.

Another thing to consider when weighing your options is depreciation.  Cars start to lose value the second they roll off the lot, so spending all your hard-earned cash on it upfront might be detrimental.  Obtaining a car loan and then investing that cash somewhere it can grow may be a smarter move for your financial future.

Often a car loan has a lower interest rate than a credit card, so you might be able to roll your debts into your car loan and only have one payment to worry about each month.  Making your car loan payments on time each month can help to improve your credit score too, so when it comes time to trade this vehicle in, you might be eligible for a lower interest rate.

If you do have some cash, you can put down a slightly higher down payment and decrease those monthly instalments.  The most important thing to consider when choosing a lender, a down payment and a vehicle is to make sure you won’t be in over your head with the monthly payments.  It really does pay off to do your research ahead of time and maybe even shop around a little.

At Northway Ford we can help you with financing and selecting the perfect vehicle for your budget.  Fill out the pre-approval form to get started today!

We’d love to help you find a great priced car loan. Simply fill in the form below and we’ll get back to you ASAP or see our selection of new and used cars at our Brantford dealership. 

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