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Should I get a car loan for an expensive car or buy a used $7,000 Honda in cash?
"I want to get a reliable used $7,000 Honda, and I have the cash to buy it.
But I was thinking about getting a loan for a more expensive car instead.
Which is the better option?"
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“You can definitely find a Honda for $7,000 that will last you years. The bonus is that you’ll have no debt either.
If you get a loan for a more expensive car, you’ll instantly fall into debt on a depreciating asset. You’ll also have to budget for full-coverage
car insurance
, which can cost you several hundred dollars a month.In almost every scenario, paying cash for a car that’s reliable is the better option.”
View full answer
- Gregory R.
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