Is buying a car in cash better than financing?

[Anonymous]

So I got some insurance money from the value of my car from a accident I had in the spring. I have $10k to spend well a family member wants to go to carmax but their prices are so expensive for older models, they are very good but way out of our budget especially for low mileage. he needs another car because his giving problems. he want to go see them soon but I don’t want to go back into debt because the car was paid off and I do not have a job to pay. plus if I try to sell it in the future I may not even get half what I paid for it. am I right here? we are going Saturday but I’m not guaranteeing will purchase a car. I don’t want to go back in debt because of someone else’s negligence in the future (I was rear ended at a light by a pizza driver) I want to get a newer car I can save up for it or trade it in.

[WindAtMyBack]

Paying cash is usually much better, even if you have to buy a car that's older than you'd like.

Taking a loan might help your credit rating, but it's an expensive way to do it. Especially if you aren't working and the interest rate is high.

If you absolutely must have a car and can't pay cash for a decent one, then don't use dealer financing. Shop around for the best rate. Then pay it off as quickly as possible.

I've owned ~70 cars and paid cash for every one of them.

If you can buy from a private party you can get a MUCH better deal. You can potentially save a few thousand or more dollars. If you are not comfortable buying from a private party, take someone with you who knows cars well. Have them check out the car. You can even pay a professional mechanic to go through it.

There are not nearly as many private party sales as there used to be. The best way to do it these days is to let the word out that you are looking. Tell everyone you know that you are looking. If you go to places like Craig's List, a lot of those are actually unlicensed dealers pretending to be private sellers. So keep that in mind.

Buy a basic set of tools and learn to work on your own car. You will save tons of money over your lifetime. Plus if you learn some mechanics, it will make your next car hunt more informed and go more smoothly.

[Oigit]

In a lot of ways buying a new car isn't wroth it. Simply because a car starts to depreciate in the value the moment it is driven off the lot. So you always end up paying more then a car is worth in the end. Also with regular maintenance and smart driving you can get a nice used car and drive it for the rest of your life. That used car will cost a hell of a lot less as well.

[Daniela1982]

If you don't want to get back into debt why finance a car unless you can get very good finance rates. But to get that you usually have to have good credit. If the prices of cars are so high, did the insurance company give you a "real" value on your car or a price of a car that is more in tune with today's car prices? For $10,000 you will get junk now days.

My $10,000 car

Cars have shrunk but not the prices

[Asker]

Gave me $16k but that’s still not enough

[TheMajesticKing777]

It depends, because cars at dealerships are most of the time in better condition than random private sellers but it all depends on who is selling but the good thing about private sellers is that it doesn't mess with your credit, you buy it up front and it's yours, do all the paperwork and documents and that's it

[exitseven]

It depends on your situation. It would be hard to make monthly car payments when you do not have a job.
You may have a problem buying a dependable vehicle for 10K. I have never dealt with Carmax but you should find one at a dealer because they usually keep the better vehicles to sell in their place.
When my kids were in college I bought them 3 year old lease cars from the dealer. I got a couple of Fort Tauruses and a Ford Contour. They were all very dependable and did not cost a lot.

[ArtemisSilver]

Financing will build your credit rating and leave you with more cash in hand.

You could also lease, and let them worry about the depreciation while you trade up every couple years.

Or you could by a used car outright, which is generally a better option. You can even save money by doing most of the maintenance yourself.

Or by an electric bike and keep the 14k for a down payment on a house or your education. Cars are overated.

[DCooper]

Definitely better to buy what you can afford to pay in cash for.

[Anonymous]

Yes, you will save a lot of money.