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Financing vs outright buy

By Terry Savage on September 08, 2019 | Wild Card

Hi Terry..
When purchasing a new car is it better to just write a check or finance with the 0% rate?
What do you think? Thank you!

Terry Says

You’re probably asking the wrong person.  I always think it’s better to buy a car for cash — if you can afford to do so.  You’re not passing up so much in interest by leaving the money in the bank. And if you are a cash buyer you can always ask for a lower price on the car! After all, the dealership isn’t “giving away” free money.  They’re making money on this deal by the enticing zero-rate offer.

So give it a try:  Negotiate the price on the 0% offer (after checking for realistic prices on KBB.com) and then walk away.  When the salesman follows suggest you give him/her cash instead of financing — in exchange for another $500 off the price.   They’ll probably be willing to compromise for maybe a $300 discount for cash — and there’s the interest you would have earned on the money if left in the bank for the next 3 years!

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