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Why would I use cash or my savings to buy a car?

You can use money from your bank or savings accounts to buy the car. You can also combine your money with another type of finance e.g. part loan / part cash.

Benefits

  • It will avoid or lower the cost of interest payments
  • If using only cash it will mean you don't need to depend on being approved for finance
  • You own the car outright so you are free to sell it or make modifications to it

Things to consider

  • You'll need to have the full value of the car up front
  • You can't spread the cost with monthly repayments
  • You'll lose any interest that would have been paid on your savings but won't pay interest you would have to pay on a loan
  • It's a good idea to keep some savings aside for unexpected expenses