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Should I pay cash or take out a car loan for a commuter car?
I have cash for a new car up to $7,000, but I was thinking of maybe taking out a loan and using the $7,000 simply as a down payment. I don't really want a car payment, but I need a reliable car for commuting. Should I pay cash or should I take out a car loan?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“If you aren’t keen on a car payment, cash is ideal.
In general, $7,000 cash will get you a pretty reliable car. It may not have the bells and whistles of a car that’s twice as expensive, but if you only need to commute, this should get the job done.
If you were to get a loan, you’d also have to pay for additional
car insurance
coverage per the loan contract. Getting insurance can be a stressful and expensive process, but it doesn’t have to be. Try the free Jerry
app to help you compare rates from the top 50 companies and get the best deals delivered to your phone in minutes.While you could get a loan, the idea of paying cash is probably a much better option in terms of financial savviness and avoiding depreciation.”
View full answer
- Gregory R.
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