There are ultimately two different ways to purchase a vehicle. One is using your own cash funds and the other is through some form of loan from a bank or financier.
If you are in the fortunate position of having cash available for your purchase you may be tempted to pay in cash, but there are some benefits of taking advantage of financing for your purchase, which you may want to consider first. For example:
Future savings – Often financing will allow you to purchase a better vehicle than what you might be able to afford with the cash amount you have on hand. Having access to a more modern car can lead to less maintenance costs and better efficiencies, saving you in the long term.
Better budgeting – You will often know exactly how much you’ll be paying, every single month, which makes it much easier to budget your future expenses.
Having savings on hand for unexpected events – Keeping your savings available for when needed is a comforting position to be in. Compared to the situation where you may have put all your savings into your new car, and have nothing left for any unexpected events or expenses.
Building your credit history – If you are starting out with establishing a new credit history or trying to improve the one you’ve got, building a positive credit history with a vehicle financier will work in your favour for future financing requirements.
Vehicle used as security – A benefit of financing your purchase through dealer arranged financed, is that in most cases the vehicle is the only security that is required. This is a much lower risk option than having security over your home or another asset should you ever have financially difficulty and default on your repayments.
If you do decide to opt to finance your next vehicle we offer several tools on our website including displaying indicative repayment amounts and highlighting vehicles that might be affordable to your situation.Would I qualify for finance?