One look at a new car dealership may shock you at the price of new cars. Can people really afford these vehicles? Well, yes and no. They can- with the help of a car loan. You need a car, but you don’t want to put yourself into financial trouble. You’re already thinking correctly! This is why many financial experts recommend paying cash for your next vehicle. Many people know the benefits of paying for a car with cash and take advantage of it. You should too!
Benefit #1 It’s important to first understand that when you take out a loan, you’re paying for more than just the car. The price of the car is the principle, and there’s also interest. Interest is basically a fee that is charged to a car buyer for borrowing someone else’s money (in this case, the bank’s money). It can range from 0.1% to 9%, or more. By paying cash for a used Ford for sale in Baton Rouge, you avoid losing money in interest. This can add on thousands of dollars to your loan over the amount of time you pay off the car.
Benefit #2 By paying cash for a used Ford for sale in Baton Rouge, you won’t have monthly payments. Let’s say you agree to purchase a car and pay $150 a month for the next six years. No big deal right? It may be feasible now, but life circumstances change. You could get divorced, lose your job, or experience a major illness that becomes quite costly. By paying cash, you won’t set your future self up for a monthly payment you cannot make when life circumstances change.
Benefit #3 So just by purchasing a used car in cash, you’re saving money. Beyond the initial savings at the used ford dealership, you’ll also be saving money every single month because your insurance will be lower.Your car insurance has to cover what your car is worth in order to replace in the event of a major wreck or other catastrophe. This is known as a “total loss.” If your insurance has to cover a $20,000 vehicle, you’re paying more each month than if it were to cover a used vehicle worth $5,000. If you pay cash for your vehicle, you don’t need this. If your car is paid off, many types of insurance coverage is optional- saving you money each and every month.
These three benefits will make your life much easier over the course of the next few years. It usually takes time, commitment, and a bit of research to find a great used car to make it possible to pay cash for the vehicler. Don’t give up… it’s worth it! Make the effort to find a great vehicle you can pay cash for and you’ll love the freedom of having a quality vehicle without making a monthly payment to drive it.