As of May 2019, the average price for a new car in the United States is over $36,000. Considering that’s a high price tag, it should come as no surprise that most Americans choose to take out loans for a vehicle purchase.
But if you have some disposable income, you might be asking yourself: Should I pay cash for a car?
Here are the top five reasons why buying a car with cash is a good idea.
1. You Might Get Discounts
When someone finances a car, this means the dealership doesn’t get all the money upfront. This means they have to wait for monthly payments to come through for years.
If you’re able to offer the entire amount all at once, they might give you a discount as a token of appreciation. Also, they’re more likely to take a lower deal to secure all that cash immediately.
2. You Won’t Have Monthly Payments
Again, when you finance a car, you’ll have to make regular payments to pay off the vehicle. This might add to your already hefty monthly expenses.
If you “settle the bill” as soon as you buy the car, then you won’t have monthly payments to worry about.
3. You’ll Have More Purchasing Power
When you offer cash for cars, you won’t have to rely on the dealership to provide financing options. You’re in control of the money.
Paying cash for a new car means you’ll have more purchasing power. If you don’t like what a dealership is offering, then you can always walk away and go somewhere else; you’re not tied down because of dealership financing.
4. You Won’t Overbuy
When you don’t have to shell out all the money yourself to purchase a car, it may be tempting to add all the bells and whistles that attract you.
But when you’re putting down cash, this limits you as to which features are necessary and which are just luxury items. Paying for a car in cash ensures that you won’t overbuy, as you probably won’t have the money to cover all the amazing possible upgrades.
5. You’ll Save Money
Overall, you’ll save money by buying a car with cash. Not only will you avoid paying interest on monthly payments, but you also reap many of the above benefits.
When you can have more negotiating power, self-control on features, and also get discounts, you’ll save a significant amount of money when compared with financing your purchase.
Buying A Car With Cash Is A Great Idea
As you can see, buying a car with cash is a great idea. While it may require you to pull up a large amount of money at once, in the end, paying cash for a car is a lot more worth it, considering you won’t take on any debt.
So if you have the means to pay for a new vehicle all on your own, then by all means, don’t take out a loan or rely on any credit to pay for this purchase. Want to read more on cars? Then check out our other blog articles now.