Best Payment Option for You When Buying a Car
By Andrea Nicole
Posted on Apr 13, 2021
We use our cars to get to work or go on road trips. Because of this, we have seen an increasing demand for them in recent years. Usually, many people would want high-quality, comfortable, and affordable vehicles. However, there are hundreds of options in the market.
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This factor, coupled with attractive marketing, can leave many of us wondering how to get the best deal. Today, we'll discuss the best payment option when purchasing a new vehicle. We'll also list down some of the common mistakes you need to start avoiding.
Mistakes You Should Be Avoiding When Buying A New Car
Buying a car involves a lot of preparation and decision-making. With the right tools and information, no amount of sales talk can lure you into purchasing a vehicle that isn't worth its price. So below are some of the common mistakes you should avoid when buying a new car.
- You prefer monthly payments.
As attractive as they may seem, monthly payments can cost you more. Thus, most people would prefer to pay in cash or through checks. Sales agents use this marketing tactic to make it seem as if you're paying less than you should.
In reality, however, you're spending more than your vehicle's original price. Being on a long-term loan will require yearly interest. That means you'll be paying a few extra thousands a year on top of your car's retail price.
- You're not considering other costs.
Another mistake when buying a new car is overlooking its long-term cost. You need to pay close attention to its maintenance and insurance. Typically, the more expensive your car is, the higher its insurance will be. Also, make sure to consider possible oil and tire changes in the future, as well as your gas consumption.
- You find paying $0 upfront more attractive.
Lastly, some people would think not paying anything upfront will save them money. But let us tell you that it won't. Some car dealerships or banks can add taxes and other fees into your loan, making you owe them more money.
The Best Payment Option When Buying A New Car
Knowing the common mistakes when purchasing a new vehicle will help you decide the best payment option. To put it simply, many people will benefit from paying cash or through checks when getting a car. But of course, your payment method would still depend on your wants and needs.
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We encourage people to pay in cash because it has various advantages compared to getting a loan. Below are the top benefits for this particular payment method:
- You will spend less.
Although you'll have to get money from your savings account to purchase your new car, you won't have to worry about its final cost anymore. Thus, you can leave the dealership with your vehicle without thinking about monthly payments or interest.
On top of that, paying cash will make you more cautious about your spending habits. In turn, you'll be able to make wiser decisions in the other aspects of your life.
- You can get discounts.
Some car dealerships may give you discounts when you pay in cash. However, others may not be so keen on negotiating a lower price because it'll mean lower profit for them.
The best to prevent this from happening is to agree on a price first. When the sales agent asks you for your payment option, tell him you haven't made up your mind yet. Once you've agreed on the final price for your vehicle, tell them you've decided to pay in cash instead.
- You won't have to pay interest.
Lastly, paying cash means you won't have to pay monthly interest. Hence, you won't have to worry about a few extra thousands on top of your new vehicle's retail price.
Knowing the best payment option when purchasing a car would depend on many factors. Make sure you're being realistic and consider your financial situation and capacity. Remember that buying a new vehicle will cost you a lot, so getting the best deal will undeniably impact your life.