Paid Cash for My Car
Even though I bought it used, my current vehicle cost well into the five-figure range. Car wrap Melbourne Instead of financing the vehicle or applying for a bank loan, I chose to pay for it with cash. I’m committed to living a debt-free lifestyle — carrying a huge car loan and adding a car payment to the monthly budget would preclude me from doing that. Paying cash for my car was a honestly huge investment but it’s one that has paid off in several ways.
Here are five reasons why I paid cash for my car.
Got a Better Deal
Dealers typically make more money when they sell a financing package, but mine offered a much better deal on the vehicle when I offered to pay with cash. I didn’t tell the dealer I had intended on paying with cash because I wanted to negotiate the price as much as possible with a proposed financing package. Allowing him to try and “sell” me on financing and then taking some time to premeditated it prompted the negotiation process. Ultimately, I questioned him if I would get be able to get even more off the sales price if I paid cash, on the spot. He knocked $3,500 off the sales price and we closed the sale that very day.
No Impact on My Credit Score
My credit score is above 750 and I want to keep it that way. Taking out a car loan could reduce my credit score and would also say to my debt-to-income ratio. Paying cash for my car allowed me to keep my credit in fantastic shape.
Place More Away into Other Savings Accounts
The cash I paid for my car came right out of a savings account. Since I didn’t have to worry about a monthly car payment, I was able to build my savings account back up again honestly easily. I live on a cash-only basis so the extra money I have available is going toward savings accounts for other huge-ticket items I might want to buy, and funds I want to make in the next three to five years. I would miss out on these opportunities if this money was going towards a car payment.
Free to Sell or Trade as I Please
I still own the car I bought with cash but if I choose to sell it and buy a further vehicle with cash, I’m free to do so. Not having a car loan means I don’t have to worry about recovering any potential lost costs and paying off the loan in full. I can use the proceeds from the sale of the car towards my next vehicle, or even take it back to the dealership to trade up when I want to.
No Risk of an Upside Down Car Loan
Cars depreciate honestly promptly and many people find that they end up owing much more on the car than it is worth. I would rather own a car so that I’m not “upside down” on a car loan. This also gives me the privilege of promotion it at the opportune time. Paying cash helps me maximize my investment on this buy.