Cash or a Car Loan? Solving the Car Buyer’s Dilemma

Do you have a substantial amount of savings? Or have you received a large amount of money in the form of a gift? Do you want to use to buy a car? Many people believe that buying a car with cash is a good thing because it helps them to avoid car loans.

What are the Benefits of Buying a Car with Cash?

1. You can get rid of making regular monthly payments.

2. You do not have to worry about obtaining low-interest rates.

3. You do not have to pay the interest rate for a depreciating asset (car).

4. You do not have to worry about repossession.

5. You can sell your car quickly.

There are multiple benefits of buying a car with cash. But, is it advisable to do so?

Should you buy a Car with Cash?

Buying a car with cash is an option for those car buyers who have cash. Today, an average new car costs $33,560 and an average used car costs $15,900. An average American doesn’t have that much cash in hand to buy a car. Even if you have cash available, you should consider obtaining a car loan.

Why consider a Car Loan?

It is advisable to assume the responsibility of a car loan because of the following reasons:

A Chance to buy a Better Car

Cars are expensive and if your funds can only allow you to buy an older car, you could end up with a high maintenance vehicle. On the other hand, you can use your money for making down payment and buy a new car. Also, remember that making down payment of a substantial amount will reduce your loan amount as well as the interest amount.

A Chance to improve your Credit Score

Even if you are capable of buying a new car with cash, it is advisable to opt for a car loan. The reason is simple. Buying a car with cash will have zero impact on your credit score. Alternatively, regular payments on your loan will improve your credit score and enable you to qualify for better interest rates in the future.

A Chance to buy Any Other Thing

If you use your cash for buying a car, you will not be able to use it to buy any other important thing such as a house. Instead, you can put your money into a savings account and use it to make down payment while buying a house in the future.

A Chance to safeguard your Future

Instead of spending your cash on a depreciating asset like a car, you can invest it and safeguard your future. You can opt for long-term investment and obtain 6-8% returns. When you compare the returns to 3-4% interest rate on the loan, you will realize that choosing a car loan is the lucrative option.

Car loans have a terrible reputation because people tend to misuse them. If you took care of the loan responsibly and made regular payments, you will realize that a loan will benefit you and help you buy the car of your dream.

Remember to always look at the bigger picture!

All the best!

Used Car Loans for People With Bankruptcy – Perfect Way to Own a Car After Bankruptcy

The Convenience of an Online Car Loan Calculator

With the proliferation of Internet facilities in the recent past, the use of online car loan calculator has also become very popular. It incorporates a simple process as all that you have to do is to click a few buttons on your computer and the wonderful world of the Internet manifests itself in various forms. You’ll be able to find various websites of online auto loan finance lenders who offer car loans. Most of these lenders also provide free online car loan calculator, which makes it very easy to find out what it will cost to take car loans and the amount of money needed to set aside every month in order to service a loan.

How An Online Car Loan Calculator Can Help You

Most people have to take a loan if they wish to buy a car, whether a new one or a pre-owned one as they do not have spare liquid funds for this purpose. Even if they have the funds, they prefer to keep the money for unforeseen emergencies that might crop up at any time. However, if you take car loans, you have to make regular monthly payments to the lender in order to pay back the loan. Moreover, the total cost of taking the loan will be much higher than the value of the car since the element of interest and the finance charges of the lender will also come into play. This is where an online car loan calculator can prove to be very useful. It can tell you exactly what your monthly payment will be, based on the amount of loan that you might be taking from the lender, the interest rate that he would be applying to the loan and the time period for repaying the loan.

Auto loan rates play a big part in determining the total cost of the loan and the amount of the monthly payment. Each lender will have his rates and as such during your search for convenient car loans, you’ll find that the online car loan calculator will provide useful information at every stage. It will help you by working out the various parameters and making it clear as to which lender’s offer would be most suitable to you.

The most important aspect of financing car loans is the interest rate and consequently the amount of the monthly payment. Before finalizing any car loan you have to make sure that you’ll be able to repay the car loan as per the agreed schedule, taking into consideration your monthly income and other subsistence expenses. An online car loan calculator will work out various options that might be suitable for you and based on these calculations you can decide the amount of loan that you wish to take and the time period for which you wish to take the loan.

The online car loan calculator will also help you in deciding whether you wish to go in for a new car or a pre-used one and whether it would be better for you to buy a car or lease one.