When it comes to buying a car, you probably already know that buying used is often considered smarter than buying new. However, you might be under the misconception that the best way to do so is to find a car that you can buy in cash. Although there are some perks to buying cars this way, financing can be a better option. These are a few reasons why.
1. Get a Better Vehicle Unless you've saved up a big chunk of cash, there's a chance that the car that you would purchase with cash wouldn't exactly be a nice one. Financing allows you to use your cash as a down payment and then to make payments on the rest of the vehicle's purchase price, which means that you can typically buy a nicer car while keeping things affordable. Then, you can enjoy more reliable transportation and can feel proud of what you drive.
2. Reduce the Risk of Losing Your Cash Due to an Accident Many people who buy cars with cash put "liability only" coverage on their vehicles. This means that if you get in a wreck, your insurance company won't pay for the car, and you'll lose all of the cash that you spent on the vehicle. With financing, you can minimize the amount that you pay out of pocket in the beginning, so if you crash the car the very next day, you won't lose all of your cash. Instead, your insurance will pay for it, since your lender will more than likely require you to carry collision coverage as well.
3. Improve Your Credit Score One reason why people buy cars in cash is because they don't think that they can get approved for a car loan. However, if you are able to get a loan on your car, you will have the opportunity to boost your score. Some lenders still work with individuals who have poor credit, such as "buy here, pay here" dealers that offer dealer financing. If you shop around, you should be able to find someone who will work with you, no matter how bad your credit score might be.
As you can see, financing your used car purchase can actually be a smarter option than buying with cash. Luckily, a buy here, pay here car dealership can help you purchase the used car that you want without requiring you to pay for it out of pocket up-front. Contact a dealership, such as Autobank of Kansas City, for more information.Share