Car buyers have basically two options to buying a car – purchase their vehicle with cash or obtain a car loan. There are advantages and disadvantages to each of these options. Individuals who have the cash to invest in a vehicle may find it much easier to clinch a deal. Here are a few more reasons why buying a vehicle with cash could be to a buyer’s advantage.
Lower Car Cost
The first step to purchasing a new or used vehicle is to find a dealer that carries the make and model vehicle that a buyer desires. Working with a quality car dealership in Orlando can make it easier for buyers to negotiate a cash deal. Many dealers are willing to negotiate prices when buyers offer to pay in cash as it enables them to sell inventory quickly without the hassle of financing.
No Finance Charges or Interest Fees
Paying cash for a vehicle eliminates finance charges, interest fees and monthly payments. Buyers simply pay for the cost of the vehicle plus tax with no added expenses to the bargain. In some cases, buyers may qualify for a rebate by not financing, which can be put toward the cost of the car.
In a stable economy, paying for a car on time may pose no risk to the buyer. However, a change in a buyer’s financial situation due to a sudden illness or loss of a job could put undue pressure on him to make car payments. Purchasing a car with cash eliminates monthly payments along with the extra interest rate that goes with them. This gives buyers a little extra cash to invest in more profitable pursuits.
Eliminates Risk of “Upside Down Car Loan”
As most buyers are aware, vehicles have a way of depreciating at a rapid rate. A new car may lose a good amount of its value just months after it is bought. After a while, buyers who finance a vehicle may find that what they owe is more than what the vehicle is worth. This puts them in the position of being “upside down” on their loan as what they’re paying exceeds the vehicle’s value. By paying cash, buyers can avoid this scenario.
Paying cash for a vehicle gives car buyers an edge in negotiating a better deal and avoiding extra costs. These two factors can make a cash deal worthwhile.
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