Did you know that about 6 million Americans are behind on their auto loan payments? With this surprising number increasing, more people are buying a car with cash, to avoid future financial ruin.
And if you’re reading this article, chances are you’re stuck between buying a car in full or making payments on it. If so, you’ll want to read this guide for tips for buying a car!
When Is Buying a Car with Cash a Good Idea?
For starters, buying used cars with cash can save you money in the long run if you know how to look! Unfortunately, not all dealers sell reliable used cars. Some will sell you a vehicle that will only last a few months, and then you’ll be stuck in the same position again.
So with that said, you must know the signs to look out for when buying a car–used or new!
1. The Car Is In Good Shape and Accurately Priced
When buying a car, make sure that you have it checked by a professional! Have them do a full inspection of the engine, fluids, motor, and transmission. If the car is in good shape or has minimal damages then buying the car is a good idea!
However, you also want to make sure you’re getting a good deal since the car is most likely used in this scenario. You can look online and see how much others are selling the exact make and model for.
If the car is way over the average asking price, speak with the seller and see if you can lower the price! Overall, it’s best to skip out if the car is overpriced. And if the car has 2 or more structural or internal issues that cost more than $800 to fix!
2. You Don’t Have the Best Credit
Having good credit can be hard especially after a global pandemic. And if you don’t have the best credit, it can be hard to get a good car! This is why a cash car is a good idea.
So if you’ve been denied at multiple car dealerships for having bad credit, consider buying a cash car. When you buy a cash car, your credit is not the main focus since you won’t owe any installations!
You could also try to find a dealership that works with people with low credit scores, this way you increase your credit and get a newer car! However, the choice is yours if you want to try and make payments or just put a big lump sum down.
3. You Want to Save Some Money
When you agree to pay off a car, you’re also agreeing to pay monthly interest rates. And in the end, you could pay up to 20% more than the original asking price.
But when you buy a car in cash, you only pay for the asking price and any taxes. Ultimately, you do end up saving money. However, this may not be the case, if the used car is in bad condition. So ensure that you’re buying a good car before putting all your money down!
Tips for Buying a Car
Buying a car with cash can be scary, especially since it’s a permanent decision. So before you commit to a cash car, make sure you think about these factors:
- Cash cars don’t have a warranty or 30-day return policy
- You will be responsible for any repairs or damages
- You will not build credit by buying a car in cash
If you’ve thought carefully about these factors, and you still want to continue with your purchase, you’ll need to know how to buy with cash! For starters, buying a cash car is easier than financing.
However, not all dealerships have cash cars available. So start by searching for the best car dealerships that have quality cash cars. Usually, cash cars will be used and can range in price.
Finalization and Payment
Once you’ve found your preferred dealership, make sure to test drive and inspect any potential vehicle that you have in mind. If you think you’ve found your car, ask questions about the car’s history.
For example, was the vehicle salvaged? How many owners has the vehicle had? Has the vehicle been in an accident?
These questions are important as they’ll determine how long your vehicle will last! So if a dealership is adamant about sharing the car’s history, it’s better to look elsewhere.
However, if you think you’ve found a good vehicle, you’ll need cash or a check to complete the purchase. After this, you’ll receive your car title and license plate!
But be aware that in some cases it takes a few weeks to get your license plates. Nevertheless, you should receive a paper replacement, until the real ones come in.
Cons of Buying a Cash Car
One of the downsides of buying a cash car is that your savings may have been drained from such a sudden purchase. Therefore, if you need extra cash for any repairs or upgrades to the vehicle, you may not have the money.
Another con is that most dealerships don’t offer discounts on cash cars. In contrast, a financed car has more cash discounts.
Lastly, some cash cars are not always the nicest pick of the lot. So don’t expect to get a brand new vehicle for a low cash price!
Pros of Buying a Cash Car
Buying a cash car also has its benefits. For starters, you don’t have to keep track of a car payment every month. Car payments can put you on financial hold for many years. Therefore, buying a cash car is better if you don’t want to owe money.
Secondly, when you buy a cash vehicle, you don’t need to get full-coverage insurance. Instead, you can have minimal coverage and save some money. However, this option can come with its own con’s, especially if you get into an accident.
Lastly, you don’t have to pay interest fees when buying a cash car. So the price that is written, is the price you pay!
Buying a Car Made Easy
Buying a car with cash doesn’t have to be stressful. And we hope that with these tips, you’ll have a better understanding of what it is to buy a cash car.
So if you think you’re ready to purchase a cash car, contact us today to get a list of our available inventory!