For most people, buying a car – even a used one – represents a substantial purchase in the context of their normal spending habits. That’s why car financing is becoming an increasingly popular option among the British public, with 91% of new car buyers using a finance deal to fund their purchase in 2019.
Of course, your available budget is likely to be the biggest factor in deciding whether to finance or buy a used car. However, it’s not the only consideration you should take into account, with advantages and disadvantages on both sides of the coin. In order to help you reach a decision, here’s a quick look at the pros and cons of both options.
The case for buying outright
If you have the capital available, paying for a car with cash can be the simplest and most straightforward method of acquiring a new motor. After having finalised the deal and transferred the funds, you can drive away with your new set of wheels. There are no monthly instalments to pay, no interest to worry about, no credit checks to pass and no mileage limits to stay under.
While buying a car is certainly the cheapest option available to you in terms of the amount you will pay for it, you should bear in mind that the value of your asset will undoubtedly depreciate over time. That means that buying a car outright is not an investment you can expect to see returns on. What’s more, the fact that you’re paying upfront means that your choice of car is likely to be restricted by your budget.
The case for car financing
On the other hand, taking advantage of the various types of car finance available on the market can give you a much larger budget, allowing you to access a wider range of vehicles. This can result in a better driving experience for the duration of the contract. In addition, you’ll have a more valuable asset at its conclusion that will last longer and fetch a higher price when it comes to moving it on.
Meanwhile, utilising a car finance deal allows you to manage your cashflow far better. You can even use the money that you save by not buying outright to invest in stocks and shares, lay down a mortgage or build up a nest egg. Meeting your fixed monthly repayments will also reflect favourably on your credit score. Even better, you can dispense with the hassle of finding a buyer if you choose an appropriate car finance package.
Is it better to finance or buy a used car?
Ultimately, the choice of whether to buy or finance a used car will depend upon your own financial situation, the type of car you wish to purchase and the things you value most in life. However, there are plenty of very attractive advantages of using car finance which simply aren’t available to those who buy outright.
If you’re interested in finding out more about the car finance options available to you, or to make an application with My Car Credit, why not give us a ring? You can reach us on 01246 458 810 or by sending an email to firstname.lastname@example.org and we can take things from there. Get in touch today!
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