Buying a car is one of the biggest investments in a person’s life. There are two options, you either pay the cash upfront or get financed. When you pay cash, the transaction is simple offering lump-sum payments in exchange for the vehicle. You essentially make a huge payment rather than doing smaller ones in bits and pieces.
When you choose to finance, you usually end with a nicer vehicle than you pay for upfront. Intrigued? Let’s dive into the details.
Buying a Used Car
If you have the money, you are more likely to prefer buying a new car, right? Why would anyone consider an older car? This is a huge misconception among people who think that used cars are inferior to new cars and are not smart purchases. The reality is used cars are often a great purchase, especially when you are buying your first car. Buying a used car comes with the experience of the previous owner who can tell you all about what you need to look for and the most impressive features of the car.
One of the biggest advantages of buying a used car is that you have more choices for your budget. You can easily get the car of your dreams under your allocated budget. Remember, used cars are not always sold because they have issues or are faulty. They are often sold because the previous owners need a different vehicle to meet their needs.
Here are some other reasons why you should go for a slightly used car:
- Used cars typically have lower insurance costs.
- Less deprecation than a new car. The value of a car depreciates faster in the first two years of ownership.
- The older the model, better will be the build quality, so there is less risk involved
Challenges of Buying a New Car on Cash
Time for the reality check. Not everyone has the ability to buy a car on cash as they don’t have enough savings to make such a huge payment at once. It usually takes thousands of dollars saved over the course of many years before you get the car of your dreams with cash payment. This is why car dealerships offer in-house financing options. These options are offered to people who are looking to buy a car and are comfortable with making smaller payments every month with interest.
Before we jump on to why you should go for an in-house financing option, let’s discuss some of the challenges of buying a car on cash. First and foremost, buying a car on loans with a lower interest rate can save you a lot of money that can be used somewhere else. Depending on the interest rate you can save money by reinvesting the cash in a stock market or other assets. No reason to burn through your savings all at once if it is not needed.
Secondly, when you buy a car on loan through in-house financing options, you can often improve your credit score. Establishing a strong credit score has a lot of financial benefits and can even help you get a bigger loan like home loans. Buying a car on cash has no secondary benefits other than getting a car.
Third, when you buy a car on the cash, it can hinder your ability to make another major purchase for some time if you are lacking the required down payment. Life is uncertain which is why it is important to have some savings in your bank account to help you overcome adverse circumstances.
Fourth, paying your loan payment on time helps you develop a strong relationship with the dealer that can help you in the future. For instance, if you ever decide to buy a better car for yourself, you can work out a better deal on the second vehicle based on your previous payment performance. Paying with cash will never give you this option.
Benefits of In-house Financing
In-house financing for most people is always a better option than paying in cash. There are many reasons why people prefer in-house financing options like:
Purchasing Process is Smoother
Why spend extra days to get pre-approved for a loan when you can get approved the same day at some dealerships? Dealerships who typically offer In-house financing usually have a quicker purchasing process with better benefits, warranties, and flexible interest rates. For most people, in-housing is like a shortcut to owning a vehicle.
Dealerships with in-house financing tend to receive a lot of applications, resulting in a well-oiled machine allowing the dealerships to be more flexible in accommodating your needs. Some dealerships can offer you a better vehicle on a specific budget while ensuring that you make the best choice.
As mentioned earlier, a credit score is an important aspect of any future loans. With an in-house financing option at a dealership, people get to improve their credit scores significantly, which later benefits in rental property matters. We currently do not report credit scores at 500 Below Cars.
How 500 Below Cars Handle Things
If you need a new or old car but don’t have the financial means to make the purchase, don’t worry at 500BelowCars we offer in-house financing options. Our approval process is simple and based on your job history and current residence. There are no hefty or complex processes involved in-between. Our only aim to make sure you get the car you want in no time. We currently do not submit our financing to the credit bureau.
Getting a car should not be difficult for anyone; this is what we believe at 500BelowCars. If you have a car in your mind, feel free to contact us, and we’ll get you the best deals that you will not be able to resist.