Are you currently shopping for a new set of wheels? While there are plenty of financing options available, many consumers still appreciate the simplicity of paying cash for a car.
Paying cash eliminates having a monthly car payment and also gives you more negotiating power.
This article takes a look at a few things you should keep in mind when buying a car with cash.
1. Decide How Much You Can Afford to Spend
The big difference when paying cash is that you’re going to need the lump sum of money on hand in order to make the purchase.
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Hopefully you’ve been disciplined enough to sock away cash so that you can shop around for a nice ride.
Now take a look at your budget and decide if you can afford a major purchase at this time.
2. New or Used?
The next thing to decide is whether to buy new or used. It’s no secret that used cars are a much better value. After all, the instant a car is purchased and driven off the lot, its value drops considerably.
So regardless of the payment method you intend to use, buying pre-owned is what any financial adviser will recommend. You’ll simply get more for your money with a pre-owned car with low miles.
3. Consider the Car’s Trade-In Value
Another important factor when car shopping is trade-in or resale value. After all, it’s unlikely you’ll own it forever.
Smart consumers use online resources like KBB.com or Edmund.com to research the historical value of the make and model of the vehicle they are considering. Keep in mind that the more your car is potentially worth a few years down the road the less it will actually cost you to own.
If you’re considering selling your car, here is a great resource for getting the most cash for cars that you should check out.
4. Buying From Dealer vs Private Seller
The final major factor to consider when paying cash is whether to buy from a dealer vs. a private seller.
You can often get a better price from a private seller, and yet many dealers offer a limited warranty on pre-owned cars, making this an attractive option. If you’re interested in a car from a private seller, you’d be wise to have a mechanic look it over first.
Ultimately you’re trying to get the best car possible for your money, and that comes down to doing research and asking lots of questions so that you’ll be as informed as possible before making your final decision.
The Advantages of Paying Cash for a Car
It’s not hard to see the advantages of paying cash for a car. The key is knowing what you want and what you’re willing to pay. Be a smart consumer. There’s no reason to get in a hurry. After all, by paying cash you’re in control. All you have to do is negotiate a great price, and then BAM!, the car is yours!
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