Smart Quiz: Which Car Purchase Is Most Likely to Cost the Least?
- A Leased Car
- A Cash Car
- A 3-Year-Old Car
- A Gas Guzzler
Answer: A Cash Car
Got your eye on the latest sports car? Or maybe a half-ton pickup is more to your liking. Whether it’s a new car or a pre-owned model, you want to spend the least amount of money possible while still getting exactly what you want. To do that, remember this — cash is king.
Over 17 million new cars were sold in the United States in 2017. While there are always new (and used) car specials happening at local dealerships, the best deal you’ll ever find is the one you get when you are willing to pay cash upfront. Buying a car outright will give you quite a few advantages.
Cash Gives You Negotiating Power
Car dealers love cash buyers. They don’t have to deal with finance companies, get their money immediately, and don’t have to fill out as much paperwork. Don’t just run to the dealership, though. Do some homework to find out what the average selling price is. The Kelley Blue Book is a great place to start. Make the dealer an offer below asking price and negotiate from there. Don’t be afraid to ask for upgrades for the same cost.
Cash Saves You Finance Charges
A financed or leased car has expenses you won’t have to worry about if you pay cash, including application fees and high interest rates. Add up all the lease payments and the buyout option, or the loan payments, and you’ll see the totals are way more than the cash purchase price.
Cash Saves on Insurance
Lenders and leasing companies have specific requirements on the type of insurance you have to carry. While no one is suggesting you don’t carry full coverage on your vehicle, you certainly won’t need GAP insurance and you can adjust the deductibles to levels that you are more comfortable with, saving more money in the process.
Buying a car with cash is the best option for saving money. Instead of making car payments, you can put that same amount of cash back for future repairs, upgrades or your next vehicle.
~Here’s to Your Financial Health