Making the Case: An Application of Credit is Better Than Buying Your Car Outright
Buying a car can be a very daunting thing. For most people, it’s the first big purchase you make. Sometimes that means saving up for a really long time to pay for the car in one shot, and sometimes that means getting an application of credit. Getting an application of credit is usually the more popular choice for most first-time car buyers and it’s pretty simple. But what if you actually have the money to buy your new dream car upfront without getting an application of credit? Shouldn’t you just do it and not worry about paying it back. Well, there’s a strong case to be made for sticking with that application of credit even if you don’t financially need to. Here are some reasons that getting an application of credit is a better idea than a one-time payment:
- Save money for maintenance – Owning a car can be a pretty expensive endeavour. Not just buying the car, but maintaining the car year after year after year. There are oil changes, tire rotation, yearly maintenance, and lots of other tasks that can really add up. Nobody’s going to be giving you a loan for these things because if you can’t afford them, you probably shouldn’t have bought the car to begin with. By sticking with an application of credit and holding onto that big chunk of money, you’ll be able to put parts of it towards maintenance and repairs during the lifespan of your car.
- It’s your chance to earn money – If you’ve got a large sum of money there are two things to do with it: you can either spend it on a big purchase, or you can invest it and make money off of it. Instead of spending it all in one place, get that application of credit and store the rest of that money in a high interest account. You’ll make money while it’s sitting there and you’ll be able to take whatever you need out of it when you need it.
- Repairs are inevitable – no matter how good of a driver you are, sometimes there’s just no way to prevent damage to your car. You could be the most cautious driver in the world, but that still doesn’t stop the jerk who parked next to you from opening their door into yours and leaving without writing a note. If you get an application of credit, you can turn those car funds into rainy day funds for just such an occasion.
There’s nothing wrong with paying for your car outright; in fact, it’s a pretty admirable thing to be able to do. Not many people have the discipline to save up that much and spend it all on the thing they were actually saving up for. But an application of credit has some strong advantages as well that can put you in a great position to handle future obstacles or even increase the amount of money you already have.