The idea of buying with cash and not through a loan is nothing new. But today, it’s much easier to use a credit card or auto loan to quickly get what you want, then pay it off later rather than buy a car without a loan.
Why Buy A Car Without A Loan
In many cases, a car loan is a smart move. It builds good credit history. Paying a loan on time can even repair poor credit history.
But in some cases, it’s a better idea to try to buy a car without a loan. How can you get a car without a loan and instead use cash? The short answer is by using discipline. But here are some of the details
Cars are more reliable than ever. But when purchased new, they lose value the moment you drive them off the lot. There are many reliable used cars that can serve you well. Do the research and narrow your options down to a few smart choices before taking the next step.
Now, it’s time to narrow it down to a single choice. Focus on “needs” rather than “wants.” If you need a car to commute, don’t get a vehicle built for off-road adventures. If you have a family, don’t buy a two-door sports car. While there are exceptions to every rule, it’s best to stick to practical needs when buying a car.
Don’t forget that in addition to the car price, you will need to pay for title, tags and registration. Also, it’s good to have money set aside to pay a mechanic to check out the car before purchase. Also, try to estimate what insurance costs will be with a new vehicle.
Now that you know exactly what you want, you can set up a plan to save the money. Establish how much you can set aside each month. Then, simply divide the purchase price by what you can set aside. That’s how many months it will take to get your new car. Or, you can do the reverse. Determine when you need the car and then save enough money each month to have the cash to buy it at that time.
Remember, while it might seem like a long wait, it’s better than paying interest after the fact.
Lower The Price
If you find that the car you’ve identified will take too long for you to buy, lower the price by looking for a more economical car. Remember that cars that are cheaper to buy are also usually cheaper to own. They may also get better fuel mileage. Find a car that both fits your needs and is in your price range.
Value Your Current Car
Come up with a plan to sell your old car. Get an estimate through online research or by getting it valued in person. Find out which place will give you the best value for your current car.
Cut Back Expenses
Every day, most people waste money on items such as coffee or fast food. Make coffee at home. Cook at home. Cut back on entertainment expenses. All this will help you save faster for the car. Small steps lead to big gains, eventually.
This approach can help you buy a car without a loan. There is no magic wand to wave to make it happen. But with a combination of good research, smart choices and discipline with your savings, you can achieve the goal of getting a car and still having some cash left in your pocket.