Question about buying a car?

Question

Would it be best off buying the car all at once, or with monthly payments?

Answer 1

It depends on whether you are trying to establish your credit, rebuild your credit, or whether your credit is already good.

If you have no credit or poor credit, it is best to make payments for one year before paying it off. If your payments are always on time, it will reflect positively and help you get more credit when you need it. If you are financing it, you also want to determine if there are going to be any penalties for paying it off early. In most cases, there are no penalties. Another thing to consider if you finance it is that you can generally refinance after a year to bring your payments even lower. You can join a credit union for lower rates.

If you already have good credit - it is best to pay it all at once so that you can avoid all finance charges.

Another thing you might want to try if you have the funds to buy a new car outright is to visit a dealership and determine the exact car you want. Determine the make, model, color and options you want for your car. Try to find out what up-sales the finance manager would try to add (i.e. Lojack tracking system, Security alarms, Scotch Guard for the upholstery...).

Once you know everything you want, it is time to send a letter to the fleet managers or sales managers of all of the dealerships with 50 miles or 100 miles of your house telling them what you are looking for, telling them that you are planning to pay cash without any financing and asking them what the best price is that they can offer to you. You will have them bidding against each other and you will be in the drivers seat so to speak.

Good luck and I wish you all the best!!!

Answer 2

there are benefits and drawbacks to both.


benefits of making payments:

you can retain (and conservatevely invest, or at the very least earn interest on) the liquid cash you have and still have it on hand for an emergency

you will build your credit score by making timely monthly payments.

you can take advantage of dealer incentives like 2.9%, 1.9% or even 0% on some models. (if you can get 0% then you MUST finance because you are getting use of that money for free!)

you may also want to consider leasing but i wont go into that since your question didnt mention leasing. ill just say that in many circumstances its the best way to go.


Disadvantages of making payments:

-you have to make a payment every month and if you neglect to do so, it can adversely effect your credit.

-you will not really own the vehicle since the title will be in the banks possesion

-if you have bad credit the terms of a finance may negate the aforementioned benfits


in my opinion, i would finance mainly because i value cash on hand. you never know what unexpected problems come up in life, not to mention you can easily make that money work for you and grow. thats not going to happen if its tied up in a depreciating asset such as an automobile

are you a homeowner? if so you may want to consider a home equity loan or cash out refinance.

feel free to contact me if you have more questions

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Answer 3

In the absence of special programs (such as 0% financing and the like) the best thing to do is to buy a used (not new) vehicle for cash.

The biggest loss of value happens when a new car is driven off the lot. At that point, it becomes a used car and you lose anywhere from $1500-$7000 or more (depending on the car and the price) in value. Buy buying a late model used car, you do not have that loss.

Answer 4

Take out a loan for it, make the payments for about a year, then go in and pay the whole thing off. It looks great on your credit.

Answer 5

It depends on several things. (1) Do you have the monies without financing? (2) If you have the monies; should something happens and you lose your job or method of making monies, could you have monies to live off? (3) Do you need additional credit? (4) Do you need additional good credit?!@

Answer 6

all at once no interest payments

Answer 7

which is cheaper