Should I Use Car Finance or Cash to Fund My Motor?

If you are planning on buying a new car, there are several different ways that you can pay for it. Buying it outright or applying for car finance are the two most popular methods.

Both options have their pros and cons, and the best choice for you will depend on your personal circumstances and the type of vehicle you wish to purchase.

Cash

If you have found a car that you like, and you have enough cash to buy it outright, this is great! You can give the money to your dealer and drive it away immediately.

However, if you can’t quite afford the car you want, you will either have to save up and wait to buy to it or settle for a model that isn’t exactly what you wanted. There is also a third option: buying the car on finance.

Car Finance

Even if you have the cash to buy a car, you might be missing an opportunity to buy an even better one on finance. Car finance deals allow you to spread the cost of a vehicle over the course of one or more years, so you will pay a small portion each month, avoiding the hefty lump sum.

As you don’t have to pay all at once, you may find that your monthly budget will allow you to buy a car which may have previously been out of your price range. What’s more, you can start driving it straight away, rather than having to wait until you’ve saved up enough.

Which is the Right Option for Me?

If getting the best overall price possible is important to you, cash will always be the better choice, because there is no interest involved, although many people will find it easier to fund such an expensive item in small instalments, especially when there are such low rates available. It all comes down to how you prefer to manage your money.

Get in touch to find out more about the latest car finance deals in Birmingham at Smallbone and Son Cars!