Reasons to finance your used car
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Transcript of Reasons to finance your used car
- 1. When purchasing a used car, is it better to pay incash or get a loan to pay for it? Although many people would consider paying incash if possible, there are times when it is easierto finance your used car instead.1 What are some good reasons for obtainingfinancing instead of paying cash?
- 2. The obvious advantage of getting financing forany car is that you can spread the payments overa longer period of time. If you are strapped for cash, this can allow you tobuy the car now while paying for it in monthlyinstallments that are easier to handle.
- 3. Having an installment loan on your credit reportcan help you improve your credit score. As long as you make the payments on time, thosewith bad credit can overcome their credit issueswithin 12-18 months. Therefore, anyone with questionable credit shouldalways get a loan if possible.
- 4. A used car is not always an old or decrepit car. Ifyou are buying a car today that was made in2011, you are purchasing a car that is consideredused. This means that you may need to get a loansimply to afford the payments on a car that maystill be worth quite a bit of money.
- 5. If you run a business, the monthly car paymentcan be used as a business expense as long asthe car is being used for business purposes. Those who choose to buy the car with cash willonly get to deduct the purchase price of the car.
- 6. However, those who get a loan can also deductthe interest that is tacked on to the monthly carpayment. It can create more of a tax advantage in thefuture.
- 7. Why pay the full amount for the car if you arentplanning on using it until it is paid off? For example, if you bought a car for $15,000, youwould be on the hook for the full purchase price ifyou paid in cash.
- 8. However, if you have financing, you may be ableto pay a portion of the loan before your sell it. This can save you a lot of money if you dont liketo lease cars or drive cars for more than a coupleof years.
- 9. There are many great reasons why you should optto get financing for a car regardless of how old itis. You can spread the payment out, claim eachpayment as a business expense and you canpossibly pay less for the car depending on howlong you own it for.
- 10. In some cases, the car may be designated asused while still being relatively new. This meansthat you dont have a choice when it comes topaying in cash versus getting a loan.