A new or used car on loan can make your life easier. Figuring out what you can afford and how to cut the cost is a challenge without the added pressure of finding a reliable way of funding your purchase.
Finance deals are available online and offline, so you don’t have to go to great lengths to get money. Here are some of the benefits of buying a car on finance through established names like 5 Star Car Title Loans.
You Can Borrow 100%
Whether you’re buying your first car or your tenth, you should know that financing can be a great way to pay for it. You can borrow up to 100% of the vehicle’s value with financing. This means if you buy a $15,000 vehicle but only have $5,000 in savings, you can still get the car. Car finance also comes with these added benefits:
- The ability to make monthly payments on your loan instead of paying one lump sum upfront.
- A lower interest rate than what credit cards charge.
- A chance to build up credit and improve your financial situation over time as you pay off the loan.
The Loan Is Tax-Deductible
The last thing you need to worry about when buying a car is the tax implications. But if you’re planning on financing your vehicle, the one thing you don’t need to worry about is your tax deductions.
If you choose to buy a car on finance, the interest payments on your loan will be tax-deductible. That’s right – by choosing to finance rather than buy outright, you get better financing terms and bigger savings on your taxes!
You Can Use Your Saved Cash for Other Expenses
If you’re paying cash for a car, you might think that the money going towards your monthly payment is saved. You couldn’t be more wrong. You can use your saved cash to pay down credit card debt, save for retirement, or just buy more stuff.
Helps You Establish Credit
When you buy a car on finance, it helps you establish credit. Having a good credit history can help you secure financing for other assets such as a house or even get a new job!
The information in your credit report determines credit scores. The more information you have on file, the better your credit score will be.
When you sign up for auto-payments with your bank or credit union, your financial institution will report this to the three major credit bureaus—Experian, Equifax, and TransUnion. This shows them that you’re responsible with your money and can make timely payments on other accounts as well.
When it comes time to apply for additional lines of credit (like a mortgage), lenders will consider how well you’ve managed previous loans and payments when deciding whether or not they’ll approve an application.
Buying a car on finance goes beyond just getting the best price. It is an opportunity to check deals that may not usually be available. You even stand to gain by taking a car on loan. Leasing or financing a vehicle will almost always cost more than buying outright. However, if you plan to keep your vehicle for a long time and have good credit, it’s worth the extra money. You can also keep your monthly payments manageable by cutting down a few unnecessary expenses.