Should I get a car loan for an expensive car or buy a used $7,000 Honda in cash?

"I want to get a reliable used $7,000 Honda, and I have the cash to buy it.

But I was thinking about getting a loan for a more expensive car instead.

Which is the better option?"

Answer
“You can definitely find a Honda for $7,000 that will last you years. The bonus is that you’ll have no debt either.
If you get a loan for a more expensive car, you’ll instantly fall into debt on a depreciating asset. You’ll also have to budget for full-coverage car insurance, which can cost you several hundred dollars a month.
In almost every scenario, paying cash for a car that’s reliable is the better option.”
avatar
Eric Schad
Answered on Jun 10, 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.
thumb-up

Did this answer help you?

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

Have a different question?

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

Read advice from car experts at Jerry

Easiest way to compare and buy car insurance

√
No long forms
√
No spam or unwanted phone calls
√
Quotes from top insurance companies
Find insurance savings — it's 100% free