auto

No good reason not to pay cash

Dear Terry,
I am able to pay $33,000 cash for a new-car purchase or finance the car for 48 months at 6.35 percent. My home is paid for and I have $380,000 in savings earning 5.4 percent. Are there any compelling reasons not to pay cash?
-- Debbie

Dear Debbie,
Paying cash for a car is almost always the way to go -- you can negotiate the initial price from a position of strength and you will save thousands of dollars in interest costs. With your large savings balance -- and assuming you won't have to pay any penalties if you withdraw some money -- you should definitely pay cash.


Here are this week's reader questions:
Car's onboard data system could haunt you
Do the same dealer fees apply when buying or leasing?
Should I use my savings to pay off my car loan?
Is it better to pay cash or finance a new car?

If you have a question for Terry, e-mail him at Driving for Dollars.

advertisement

Show Bankrate's community sharing policy
          Connect with us
advertisement
CAR & MONEY NEWSLETTER

Get cost-cutting tips for buying, selling and maintaining your wheels. Delivered monthly.

advertisement
Partner Center
advertisement

Blog

Tara Baukus Mello

Bad-credit car loans lowest since 2012

Car loans for consumers with the worst credit, so-called subprime and deep subprime, have fallen to its lowest share of auto loans overall since 2012.  ... Read more


Connect with us