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02 Nov

Should You Use Your Savings to Buy a Car?

Should You Use Your Savings to Buy a Car?

Should You Use Your Savings to Buy a Car?

When it comes time to buy a car, you have a great variety of choices and decisions.  In fact, it can seem a little overwhelming.  Regardless of whether you are buying a used car or a new car, determining how best to approach paying for your car can be just as tricky as deciding upon your make and model.  Luckily, you do have options, and learning more about them can serve to make the car buying process just a little bit easier.

Don’t Assume That Credit History Issues Limit Your Options

Credit issues don’t mean that you must put a large down payment on a car.  This is a common misconception, but many car dealerships will work with those who have had credit issues in the past.  Even with bad credit, there are still car loan options that many people don’t realize exist.  For example, it is possible to get a zero percent finance loan or a no money down loan.  It is important to keep in mind that you don’t necessarily have to put any money down in order to buy a car.

Car Loans and Your Credit Cards

The odds are good that your car loan interest will be less than your credit card interest.  This reason alone is practically enough all by itself to strongly consider skipping using your savings to buy a car.  If you have a good deal of money saved up, there are potentially better ways to use that money than on a down payment for your car.

Your Savings and Buying a Home

Do you own a home?  If you don’t already own a home, then you might want to consider directing your savings in this direction.

As it turns out, there is great flexibility when it comes to your car buying options.  This means that you don’t necessarily have to take your savings and apply it towards buying a car.  In fact, many would argue that you have many better options at your disposal, ranging from paying off credit card bills to buying a home.

If you are still debating paying cash for a car versus financing it, you can check out our financial calculators here.