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.
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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.”
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