When you plan to buy a car the first thing that comes to your mind is how to pay for it. There are two options for you; you can pay the entire amount by cash
When you plan to buy a car the first thing that comes to your mind is how to pay for it. There are two options for you; you can pay the entire amount by cash or you can take a loan and spread your payment to many years. Deciding on the mode will depend on your financial stability. Reading the statistics, we can find that majority of the buyers go with financing their vehicle because of the many advantages associated with it. You can consult in-house car financing services singapore for more info on this.
- When you use the financing option, you can have a greater choice. When you are confident of your ability to pay the installments, you can look for a better car. This way your choice is not restricted. If you were to go for outright purchasing, you have to look at your present cash in hand situation and also the money in your savings account after paying the purchase price for the car. You can plan your future needs and buy a vehicle accordingly when you choose to buy through a bank loan.
- You have to figure out expenses on a tight budget if you are planning to pay the whole amount when buying the vehicle. Instead, choosing the installment option helps you to spread the cost to many years. This way you don’t feel the pinch much. You know your fixed monthly payments ahead and so you are able to plan your expenses for other things well. Overall there will not be much impact on your pocket and this helps you lessen the burden.
- Financing your car purchase can indirectly help improve your credit standing. Your regular payment of EMIs will let the lender know your reliability in terms of repayment. So your credit score can improve based on this. This will pave way for better terms when you approach for loans in the future. When you are dependent on loans it is important to have a good credit history.
- When you pay through the cash down option, it drains out most of your savings. This is not good since you may resort to borrowing for your regular expenses also. Buying through a loan helps to keep your savings safe as you pay the installments based on your monthly income only. You choose the number of installments and also the number of years it is spread out, so you have better control of your income and expenses.