Cash vs. Car Loan
When you want to purchase a car from a dealership in Alberta, you have two options – pay in cash or take an auto loan from a lender. You assume that it is a great idea to obtain the vehicle by making a single payment. As a result, you don’t have to pay the interest, nor do you have to worry about making the payments on time.
Cash isn’t always good
However, there are several downsides, which make this strategy an appalling idea. For instance, you can only pick from a smaller pool of vehicles, as the better automobiles are out of your budget. Also, if any emergencies arise after paying for your car in one go, you will put yourself in a compromising position, as you may not have the necessary finances.
Advantages of a car loan
On the other hand, when you take a car loan, there are no restrictions when you have to select a vehicle. Depending on the amount the lender approves, you can pick from a wide variety of automobiles.
Another huge advantage of getting a car loan is that you can increase your credit score, provided there are no delays in the monthly payments. With a positive credit history, you can take credit from financial institutions at lower rates of interest. At the same time, the chances of getting rejected go down significantly.
Provided you get a car loan with a low rate of interest, you will save large sums of money in the long run. To help understand why you should take an auto loan here is a simple example. Rather than paying $20,000 for a vehicle, you pay only $8,000 as a down payment to the lender. With the remaining amount, you can invest in other aspects of your life, such as reducing the debt or make improvements in your property. You also have the freedom of spending money on third-party options for your vehicle, such as a high-quality music system, a dashcam, spare tires, and heated seats.
The advantages of taking a car loan always outweigh the benefits of paying by cash. If you want to take an auto loan, make sure you conduct adequate research before selecting a vendor in Canada!