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
 

A little research could save you BIG on interest.

Don't have time? Our rate-tracker tool saves you time and money. Delivered Thursdays.
 
advertisement
Partner Center
advertisement

Blog

Tara Baukus Mello

Mustang car tops Empire State

The Ford Mustang just turned 50, and both Ford Motor Co. and Mustang owners are celebrating.  ... Read more


Connect with us