There isn’t any doubt that purchasing a new vehicle is an exciting endeavour for most of us, especially if we are doing it for the first time. But whether it’s your nth time buying a vehicle or you are a complete beginner when it comes to vehicle ownership, you have more than a few options when it comes to how you decide to pay for your vehicle.
You can, for instance, get a loan, but this entails interest, and you will have to consider your monthly payments and whether or not you can afford it as well. You can go for a PCP agreement or a Personal Contract Purchase deal, which means you have to pay a monthly fee plus a deposit and have the choice to either return the car at the end of the deal or pay a lump sum so you can buy it outright. There are other options if you would like to have a new vehicle, but one of your best options – if isn’t the best option – is to purchase a vehicle outright. Here are the real advantages of purchasing your new car outright.
The advantages of outright purchase
Of course, one of the most critical questions is whether or not you have enough savings to pay for your vehicle outright. You need to have the funds, but if you have been able to save and can afford to purchase the vehicle in cash, then you can most certainly do so – in fact, it’s recommended. Here’s why:
- You won’t have to deal with any debt. Most of us are already in debt with other things, so why add to your debts when you can simply pay for your new vehicle in cash and walk away? The thing with debt is that it usually comes with interest, and if you get a loan for your new vehicle, you will have more debt to pay within the duration of a few years – and more to worry about. No individual likes being in debt, so if you have the opportunity to get a new vehicle and pay for it in cash, then you should.
- You don’t have to contend with interest. As already mentioned, when you get a loan or go for another car deal, you often have to contend with interest. And interest rates can be higher if you don’t have a good credit rating or if you have a small deposit. If you have the money for it, it’s better to pay cash because you will no longer have to worry about the interest rates – in fact, you own the vehicle outright.
- You will not need to make repayments every single month. This is one big advantage if you decide to pay for your vehicle outright with some excellent new car deals. The worry of making monthly repayments is taken away from you, and you can simply enjoy your vehicle and drive it without trying to factor monthly repayments into your budget.
Of course, while purchasing a car outright is often the best solution, you have to make sure that you still have enough savings for other expenses, and you have some other sources of funding in case you need it as well.