Question: Is Paying Cash For A Car An Advantage?

Question: Is Paying Cash For A Car An Advantage?

Cash gets you the discount price, which is the cost you pay for taking advantage of zero percent financing.

And when you pay cash, you may even be able to negotiate a better price, particularly on a used car.


If you don’t finance your purchase, you won’t pay any interest.

Is paying cash for a car a good idea?

The common thinking is that buying a car with cash is better than financing because you won’t have to pay interest. After all, with a cash deal, you pay exactly the price shown and no more. If you want to spend your cash, that’s great: It means you won’t have a payment or another care about the car’s financing.

Why should you not pay cash for a car?

You don’t have to pay for 100 percent of the car with cash or finance the entire cost of the car. A side benefit of making a large down payment and taking out a smaller loan is that you can potentially shorten the term of the loan, which often reduces your interest rate and the total amount of interest you have to pay.

Photo in the article by “Flickr”