Should I finance a $9,000 car if I have $20,000 in savings to pay for it?

Should I pay cash for the car or should I finance all or a portion of the vehicle? I have $20,000 saved up to buy a car. After shopping around, I found the one car I like is only $9,000.

Answer provided by
Eric Schad
Answered on Jul 03, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
“This is highly dependent on many factors:
  • the interest rate
  • your ideal down payment
  • if you want/need to build credit
If you can find a 0% interest loan, than financing the vehicle is a no-brainer. You keep all the money you’ve saved and you won’t pay anything extra on interest.
If you want to build credit, financing at least part of a new car would make sense. Just put down 50% and get a loan for the remainder.
Or you can just pay cash outright if you can’t find a decent loan rate or you don’t need to build credit.”

Did this answer help you?

Ask us a question by email and we will respond within a few days.

Have a different question?

You can meet us at our office and discuss the details of your question.

Easiest way to compare and buy car insurance

No long forms
No spam or unwanted phone calls
Quotes from top insurance companies