If you think it is time to get yourself a new set of wheels or this will be your first car purchase then you have a few difficult decisions that need to be made. You want to make sure that you get a reliable vehicle and so you have to figure out if you want to buy a new model or purchase one that is used already.
There are pros and cons for each and once you figure out what kind of vehicle that you want to purchase then you have to start thinking about how you will pay for it. If you have saved up a sum of money over the years then you may be tempted to put all of that onto the counter and pay for your vehicle in full.
The thing about doing that is that you then leave yourself vulnerable to any unexpected bills that might come your way and if you are not cash-rich then you’re going to run into problems. This is why many Australians take out car loans every single year and none of them regret this decision. If you are kind of on the fence when it comes to paying in full or paying over a series of months then the following are just some of the benefits of taking out a car loan rather than paying for it in full.
- There may be no deposit required – There are many finance deals out there and so this very competitive market has made it better for you the consumer to get the best deal possible. On many occasions, you can borrow the full amount needed for your small business purchase of a car and that means that you don’t have to come up with any kind of deposit at all. This allows you to save this money for something else or for a rainy day that might come along.
- You can spread out the payments – Rather than handing over all of your money in one go, you can take out a loan and this allows you to pay the money owed over a number of months that is incredibly manageable and it suits your budget completely. The other good thing about doing it this way is that your credit score will improve as a direct result and as long as you pay the money in full every single month and on time then this will give you an impressive credit score that you’re going to need later on in life.
- You still have purchasing power – Many people think that if they pay in full that they can get a much better deal on the vehicle that they want to buy and the opposite is in fact true. Once you get your loan approval, you have the same purchasing power as a cash buyer and it’s more likely you will get lots of extras thrown into the deal as well.
As is plain to see, it makes a lot more sense to take out a car loan rather than hand over all of your hard-earned cash at once.