How to Buy a Car Without Borrowing Money

Posted on 04 December 2012 by Tony Santos

Every car owner knows that paying off the loan for one car and the quickly taking another loan for another car isn’t a wise decision. Nor is carrying the balance of the old loan to a new one by buying a new vehicle and trading the old one without finishing your payments.

In  the following article we talk about how you can buy the car you want, without really having get caught up in the vicious circle of car loans…

#1: Pay Cash

When it comes to avoiding a loan, the most obvious thing to do is to buy your vehicle by paying with cash. For a lot of people it doesn’t really make sense to go out there and borrow money because they already have sufficient money in their savings account to pay by cash.

However, this certainly doesn’t mean that you go ahead and empty your savings account to buy the vehicle. You should always have emergency funds ready. Use only money that is beyond your emergency cash to invest in your car.

#2: Lower the Price

In case you don’t have enough money to buy the car that you want to buy, then why not go for one with a lower cost? Why pay more for something that you can get it for lesser? For example, instead of splurging your cash on a brand new car, go for a used one. Or instead of buying a high end luxury model, buy a more economical one.

Another thing to consider is the maintenance of the car once you buy it. If you buy a car at a lower price, you’ll spend less to maintain it. Not only are smaller cars more fuel efficient but they also cost less to insure. However, keep in mind that the dealer you buy your car from will almost always have auto dealer bonds to ensure a safe buying experience.

#3: Change Your Thinking

A lot of people tend to do their mental math according to the “low monthly” payment they will have to make to own a vehicle. However, that’s not the right way to do it because your monthly payments can add up pretty fast and you could end up paying more.

When you calculate the cost of the car in terms of cash payment, you’ll find that you’ll be paying much lesser. Every penny saved is every penny earned. So you could use the money you save from those monthly payments for a better cause, and maybe even have it working for you. Instead of it working for the loan giver.

A lot of people are caught in the car loan maze. They’re so badly caught up in it that they hardly want to find a way out of it. But you don’t have to like them. Be wise and start working your way out of it.

Categorized | Car Loan, Car News, Car Tips

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