Benefits of Buying a Car in Cash


Car Cash 2

What buying a car in cash does over someone who enslaves themselves to a care note:

1. Affordability: It forces you to ONLY buy what you can afford. Remember, the term “I can afford it” does not mean you can afford the car payment that month. It means that you have the cash in the bank to make the purchase without owing anyone. Otherwise you can’t afford s#%$. You’re just gambling with how long you can make it without a major emergency happening.

2. Discounts: It puts you in place to be highly likely to receive a sizable discount on the overall price of the car. Lenders want to move VOLUME. Making $3k on 5 cars beats $5k on 2 in most businesses across the globe. Your greedy local car dealership is no different. Whipping out cash and buying a car at the end of a sales month will 9 times out of 10 allow you to get the dealer to cover your tax, title and registration.

3. Car insurance: It allows you the CHOICE to pay less in insurance! (Banks and car lease finance companies dictate your insurance coverage)

4. Late fees: The goal for wealthy people is not to be able to make payments on their bills on time. The goal is to have as few as possible in the first place. By reducing the number of payments that go out each month (from canceling cable bills to combining monthly cel phone plans to eliminating credit card payments regardless if you pay in full) you are substantially reducing your potential to pay late fees.

5. No more car than you really want or need: It forces you to think smarter about your purchase! Numerous published studies show that when you spend your own hard earned money you choose better, more reliable, longer lasting products (read: honda, toyota, nissan). When you give a 25 year old a $25k loan they come home with a Giraffe with a motor in its butt.

6. Cha ching! It puts you on path for wealth! If you were to simply reduce your auto expenses by $400 per month and instead you invested that amount over the typical timeframe someone pays a mortgage (30 years), you are $818,435.52 wealthier than the person who doesn’t.

Shout out to driving cars in hopes of impressing people who you’ll be asking to borrow money from in a few years.

Very impressive your plan is my friend.

#WarOnCreditWeek2

http://thisiswhyyourebroke.com

Advertisements

2 thoughts on “Benefits of Buying a Car in Cash

  1. Florina

    So I made the mistake of financing a 19,995 2011 Toyota Camry 2 months ago the loan term is 72 months and my rates is 26.7 . I put down 3700 dollars.My payments are $443 a month and now 2 months later I seriously regret getting this car.Now I’m trying to take it back for something cheaper but no one will take the car without at least 2 grand down because I owe more than its worth.I don’t have 2 grands to put down towards a new car.How would you recommend I get rid of this car?Selling it isn’t an option either because no one wants to buy the car.I had one dealership tell me they would be taking a loss buying it straight out without doing a trade.I wish I had found your site before buying this car I had never financed a car before and i’m only 19.Having parents finance wasnt an option either since they both have bad credit and I have no credit.Thanks for the information

    Like

    1. Hi Florina,

      Thanks for being honest about your mistake! You still have a little bit left to go in your assesment of your situation but thats pretty impressive for 19.

      The last part you should acknowledge is that yes you didnt have parents to finance the car but you also didnt need to finance the car in the first place. When we shy away from sacrifice we drive fool speed into regret. I’m sure now you would trade that car (which I’m guessing has a $22k or so balance you’re upside down on when they added in tax and license) for a short term paid off bucket given the chance.

      Which brings me to my next unfortunate point. You’re completely stuck. There is nothing beneficial to your finances that you can do outside of

      1. Bankruptcy
      2. Repo (this normally leads to Bankruptcy)
      3. Go hard at the BKF debt elimination plan and knock the balance out early
      4. Have someone take over payments (like http://www.swapalease.com or http://www.takemypayments.com- and yes this rarely works out)
      5. Sacrifice to save up enough to pay the difference between how much your car will sell and how much you owe the bank before you sell the car to carmax.

      The last option means you’re taking the bus, public transportation etc. Because spending $6k to get out of a car loan and then buying a $10k honda civic means you just got exactly nowhere.

      Wrote a song about this horrible situation dealers sucker us into, like to hear it here it go>> https://thisiswhyubroke.wordpress.com/…/02/the-lost-decade/

      Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s