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
advertisement
advertisement

Blog

Mitch Strohm

Auto loan rates for Tuesday, May 24

Be sure to shop around for the best auto loan rates available.  ... Read more


Connect with us