Should I buy a car outright with my total loss settlement money?

"Should I use the settlement money from my totaled car as a down payment for a new car or buy a used car outright? I recently got in a wreck in which my Honda was considered a total loss. The insurance gave me the full value of the car, which is more than enough to pick up a decent used car of the same value."

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Johnny Puckett
Answered on Jun 25, 2021
Johnny Puckett is a freelance writer and automotive expert. He has contributed content to a number of some of the largest online publications, aftermarket automotive manufacturers’ sites, and automotive informational sites. His experience in the automotive and information fields informs his writing at Jerry. His automotive interests bleed into his free time, where he enjoys modifying his favorite cars and woodworking.
“It really depends on your needs.
If a used car of the same style and value that you had adequately fits your needs, you would be better off just paying cash and saving yourself from those monthly payments.
However, if you find a better car for a few thousand more that would better fit your needs, financing the rest of the car would not be a bad idea. Consider if the settlement money is enough for a sizeable down payment.
Whatever you decide, think it over before signing anything and be careful not to go overboard.”
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