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Americans owe nearly $1.4 trillion in auto loan debt. And as more car buyers explore financing options, this figure may increase. Car loans are expensive, so it might be better to explore other alternatives. If you have some money saved, you can even buy a car without getting a loan. But how exactly do you buy a car without borrowing money? Here’s how.
1. Buy a Used Car
According to Statista, the average selling price of a used vehicle was approximately $22,000 in 2020. New cars cost nearly $17,000 more. If you don’t have enough cash to get a new vehicle, find a used car. Instead of getting a luxury car that costs an arm and a leg, go for a more economical vehicle that costs less and is cheaper to maintain.
2. Buy the Car with Cash
Most car buyers apply for a car loan even when they have some money in their savings account. If you have some money saved, you can buy a car with cash. When you pay cash for a car, you won’t be tempted to overspend as you know the car will go down in value. Financing may encourage you to buy a more expensive car. Also, when you buy a car with cash, the dealer may give you a discount.
3. Compare Car Deals
Although you might have already settled on the car you want, it’s advisable to be flexible. In the auto industry, demand and supply significantly influence the price of cars. So, don’t rush to pick and buy a car, compare the deals on different websites until you find a car you can afford. According to Shelor Motor Mile, dealerships will allow you to compare prices of different car models easily, making your buying decisions a lot easier.
4. Trade-In Your Old Car
If your car is still in good condition and you’re not paying a loan for it, consider swapping it with a new one at the dealership. As long as it is well maintained, you won’t have to get financing and buy a new car. Experts recommend trading in or selling a car after 2-3 years. You can sell it to a private buyer and get the cash to purchase a new vehicle at the dealership.
5. Save Cash
If you don’t need the car right away, you can start saving for the purchase. Create a savings plan for yourself or seek the help of a financial expert. After you save up enough money, use it to pay for the vehicle. Buying a car with cash will help you avoid getting tied down by a car loan.
6. Drive Your Current Car for Longer
Most people get a new car as soon as they pay off their car loan, never getting out of debt. You don’t have to upgrade to a new car just because the new model is out. If you are always paying car loans, you’ll not save any money. Once you get a car, drive it for years–until you have enough cash to buy a new one.
About The Author:
Eva is a content writer at Letstechup. She is well adept in writing on various Tech topics and discuss helpful tips that are actually beneficial to improve one’s lifestyle in multiple ways.