Would you pay cash for your car or go for an auto loan?
Many consumers prefer an auto loan rather than paying hard cash
for a car. This preference is partially because of a competitive
auto loan market now offering auto loans on new and used cars, light
trucks, sport utility vehicles, and motorcycles.
One obvious advantage of getting an auto loan is that you improve
your cash flow by retaining it. Plus you increase your financial
security by keeping your money for emergencies or development related
expenses such as college tuition or updating your computer equipment.
An easy monthly payment over a period of say four years, will make
you a person with reliable credit history even if you previously
had bad credit.
But let us not get carried away by the benefits of the auto loan.
Think for a moment, if you buy your car with cash, you have no monthly
payments; and even if you were to invest each month's auto loan
payment in an interest paying investment, you would not come out
ahead unless the interest rate of your investment is higher than
the rate of your auto loan. And we know how likely that proposition
is.
About The Author:
Ego Feathers Jr. is a successful author and the publisher of http://www.1st-choice-loans.com.
Recommendations and tips on auto loan inquiries including interest
rates, bad credit loans, new and used vehicle loans and refinance
options.
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