Should I get a loan to buy a used car?
I have enough money saved up to pay cash for it, but it will use up 75% of my savings. Should I get a small personal loan from the bank to supplement my savings for the purchase? Or take the risk with having low reserves for awhile? The car has a warranty.
Do you have any general principles about borrowing money for cars?
Filed Under Financing | 3 Comments
Tagged With borrowing money, cars, enough money, general principles, personal loan, risk, warranty
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3 Responses to “Should I get a loan to buy a used car?”
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It would be helpful if actual dollar amounts were included, but personally, I’d take no more than half of my savings and put it toward the used car. You never know what catasrophe could befall you so keeping an on-hand reserve is probably wise. New cars depreciate substantially as soon as you leave the lot.
Taking out a small personal loan from the bank will help build your credit rating and you can always pay it off early.
why would you buy used when the manuf. are just dying to get you in a new one…. take some of your savings for a down payment invest the rest and use the earned intrest on the money to make the payments. this way you have a new car covered under warranty so you will have a period of trouble free driving. also they are offering cash back insentives…use that towards the car as well. this way you get to drive, keep your savings and let the earned intrest pay for your car…
I think it depends on your circumstances and what you need to accomplish. If it is a newer used car I would put a small amount down and finance the balance. You could then invest the rest of your money and make more money than you will pay in interest. Again you have to be secure in your employment and ready to commit to making your payments. You also have the chance to just hold onto your cash just in case something happens down the road. That way you will be covered. Good luck I hope you make the decision that is best for you.