Buying a vehicle can be quite an expense, as you may already know. And the thing is, how you pay for your vehicle will greatly depend on what you can afford and your situation financially. For instance, do you have available cash for an outright purchase, or do you need to go for a loan or other finance agreement? Everyone will agree that cash is king, and the best method of paying for a vehicle (or anything, for that matter) is with cold hard cash. Paying in cash means you no longer have to worry about being in debt, and you don’t have to deal with monthly payments, either. But should you pay for a vehicle in cash if you have the funds, or take out a lease or loan? Here’s your best guide.
The Benefits Of Paying In Cash
Simply put, paying in cash is a great option – the best option, many experts would say. By paying for your vehicle in cash, you have a one-off payment, you can own the vehicle right away, it is cheaper than getting a loan because you can also take advantage of discounts and some of the best new car deals that you may not otherwise get if you take out a loan, and you don’t have to think about any limits on mileage. Best of all, since you already own the vehicle, if you decide to sell it in a year or so, you can do so without any hassle. Paying for your vehicle in cash is a straightforward and simple process as well – you just visit the car dealer or look for a great new car deal online and give the dealer your payment. Unlike loans, you don’t have to worry about credit checks, and unlike personal contract hires, you don’t have to deal with mileage limits, either.
The Benefits Of Financing
You have several choices and options in terms of financing for a new vehicle, which include PCP or personal contract purchase, HP or hire purchase, a lease, a personal loan, or a credit card. Each method comes with advantages as well as disadvantages, but the general advantage of each includes being able to get a good or better model than you could probably afford if you were to pay in cash, and the cost of the vehicle can be spread out. You can also budget more easily since you just have to deal with a fixed monthly fee, and it can improve your credit rating.
But there are certain disadvantages as well – for one, it’s definitely more expensive than paying in cash since you also have to pay interest, and you may not be able to make any changes or adjustments to the vehicle if you go for hire purchase or PCP. It can also be a challenge to get out of an agreement, and you may have to contend with fees for mileage and additional fees if there is any damage to the vehicle.
If you can afford to finance your vehicle outright, why not? It is the cheapest option, and if you need money, you can easily sell your vehicle as well. The final decision will really be up to you but make sure your decision will affect your life in a positive way.