Should I buy with cash or finance?

When buying a used car, one of the main decisions to make is whether to buy outright with cash or choose finance. Both options come with their pros and cons. So, it is essential to examine your personal circumstances prior to making any choices. Let’s go over some factors to think about when deciding between the two possibilities. Plus, keep in mind if you choose car brokers to help you find a vehicle, some methods of payment may not be available.

Your financial situation

Car brokersThe first factor is the most important, and that is your financial situation. Look at your finances to decide if you have enough money to buy the motor outright. If you have a lump sum available or enough in your savings, you can pay with cash. This will allow you to avoid monthly loan payments and means you also save on interest costs.

In addition, consider your monthly cash flow and budget. Buying a vehicle with cash may deplete your savings or leave little in the emergency fund. If that is the case, financing might be better for you. It enables you to spread the cost of your motor over a certain amount of time. It makes things more manageable and provides financial flexibility.

Interest rates

Always take the time to examine the prevailing interest rates for car loans. If they are low, financing may be more appropriate. You can keep your monetary reserves where they are or invest them somewhere else. This could lead to you earning a greater return than the interest you will pay on the loan.


Assess your credit score and creditworthiness. A decent credit score can help to secure a positive interest rate on car loans. However, if you have a low score, or a limited credit history, you can experience higher interest rates. Cash purchases can be more attractive here.

Future goals

Look at your long term goals too. You could have other financial priorities. Examples can be paying off high-interest debt or saving for a deposit on a home. Using cash for the purchase may not be as wise in these cases. Also factor in if you will need to pay car brokers for their help.

Ownership and resale value

Both of these are also important. Consider how long you intend to keep the car and what its potential resale value is. If you plan to sell the car in a few years, financing can cause negative equity. Owning outright lets you sell without any loan obligations.

Maintenance and insurance costs

It is always a good idea to consider both of these factors. You may need more comprehensive insurance if you have finance. As a result, it can be more expensive than if you own the car. Maintenance costs may be higher too depending on the terms of the finance.

Personal preferences

Think about your comfort level as well as personal preferences with debt. Some favour the peace of mind that you get with outright owning a car. Others are fine with the monthly loan payments.

Learn about car brokers from us

At Auto Car Brokers, we commit to helping each client become the best broker possible. The learning modules we supply are based on our own success in the market. In other words, we’re teaching you all that we know. It can make it much easier to manage your business, find clients, search for cars, and more.

So, if you’re interested in finding out more about car brokers, feel free to get in touch. We’re happy to show why it is such a great opportunity.