How to Pay for a Car | Get Financial Freedom Tips | Transform Your Financial Future


Tuesday, November 12, 2019

How to Pay for a Car

The marketplace is a huge arena for vehicle buyers. The question isn't how to find a car or which one is the best, but how to pay. That's where the rubber meets the road. Fortunately, there are multiple ways to raise the necessary capital needed to acquire a vehicle. Some methods are old-fashioned and others aren't. The main factor for prospective purchasers to keep in mind is this: there's more than one way to skin a cat.Here's a summary of the most common ways people pay for their new rides:

Cash on Hand

More folks opt for cash buying than you might expect. Recent data shows that about one-fourth of all car and truck sales take place for cold, hard cash. It's important to note that those statistics include used vehicles, which are more commonly traded for currency than their new, trading-room-floor counterparts.

Pay for a Car

Traditional Auto Loans

About two-thirds of all sales are negotiated with standard bank loans. Keep in mind that car loans work differently than regular loans. For one, they tend to have lower interest rates than personal loans carry. In fact, when you buy your favorite new four-wheeled model from a dealership, you're entering into an agreement that is strikingly similar to a home loan. Not only is your loan backed by the collateral you drive away, but the lender continues to have a vested interest in the condition and resale value of the asset at hand.A traditional bank-financed contract for your new ride will feature a fixed term of between two and six years, a rate of interest based on your credit score and other factors, and plenty of fine print that explains what happens to the asset should you default on the agreement.


A common way to pay for at least a portion of your purchase is with a trade-in. The ride you currently own, assuming you have paid it off completely, is one of the best ways to slice off a large piece of the new vehicle's price. If you happen to have a high-value car to trade, and it's in very good condition, it's possible that you can achieve what many consumers dream of, the swap out. If your trade-in is worth as much or more than the vehicle you're purchasing, you'll need no financing at all and might even get a rebate check when all is said and done.

Credit Cards

Sometimes you'll hear about buyers using plastic at the dealership to get a fresh ride, but it doesn't happen very often. Credit card interest rates make the proposition quite costly for anyone who opts for this unorthodox financing strategy.

Sell Other Assets

Nowadays, with a 24/7/365 online retail/re-selling market, some consumers have opted to raise cash by selling all sorts of goods and services. For an upcoming major purchase, whether it's a new home or a new truck, millions of people flock to the Internet and auction off their books, appliances, jewelry, artwork, old coins, silver or gold bullion and more. Anything that brings in a dollar will do.

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