What’s the Best Way to Buy a Car?

Buying a car can be difficult because you have so many different decisions to make. Not only do you have to figure out what kind of car you actually want and how reliable it is, but you also have to figure out how you’re going to buy that car.

You have a few different options when it comes to buying cars, each offering their own unique benefits. We broke down some of your different options and weighed their pros and cons to help you decide how you want to buy your next car—here’s what we came up with.

Straight Cash

The first and simplest way to buy a car is to pay with straight cash. This is most common when buying a more affordable used car from a private owner, but there are some cases where people pay the full amount for a car at a dealership too. The benefit to buying a car this way is that you don’t have to worry about paying interest like you would if you financed. Not only that, but you don’t have to worry about making monthly payments and keeping tabs on your total balance remaining. Once you buy a car with cash, it’s yours free and clear.

Obviously, the downside to buying a car with cash is that it usually limits your budget quite a bit. You might only be able to muster up $5,000 for a used car if you’re paying cash, but financing can help give you a little bit larger of a budget, which is crucial in getting the car you need.

Financing

Your other buying option is to apply for financing when you buy a car. The amount of money you qualify for will depend on how much you make and your credit score. The best way to get a loan for a car is to get pre-financed, which simply means applying for a loan to figure out how much you can spend before you choose a car. This gives you a budget number to work with that you know you’ll be able to pay thanks to your financing.

Financing is a great way to buy a car if you don’t have a very large budget otherwise, but there are some definite downsides to it. The biggest downside is the fact that you’ll have to pay interest. If you’re going to finance, make sure you understand how much you’re going to pay in interest compared to the total price of the car. If you need help understanding how financing works and learning what to watch out for, there’s lots of helpful information on the internet.

Leasing

If you don’t have a ton of money to spend and aren’t particularly keen on being stuck with the same car for the next 5 to 10 years, leasing may be a good option for you. Leasing a car is essentially the same as renting one, except the rental is for a longer period of time. You start by paying a relatively small down payment, then you make monthly payments for the term of the lease. Once your term is up, you can simply lease another car and be done with the old one.

Leasing is a good option because it allows you to get a vehicle without making too much of a commitment. You can simply lease a new car when your term is up and you won’t have any problems. However, there are some downsides to leasing, perhaps the biggest being the fact that you can be charged for wear and tear since you don’t actually own the car.

No matter how you decide to buy a car, make sure you do your research and choose the option that’s best for you.