Should I pay cash for a car "IF" I can afford it and it doesn't affect my saving?

SMITTY46
Occasional Visitor

should I pay cash for a car "IF" I can afford it and it doesn't affect my saving.

Most Helpful

Answers (1)

Answers (1)

SMITTY46,

 

Congratulations! It sounds like you have been doing a great job of saving. Paying for your car in cash can be a great option especially when you consider it brings the peace of mind of not having a car payment. Having said that - for most, purchasing a car is the second largest purchase they will make in their lifetime behind purchasing a home. Which means buying a car for cash may mean shelling out a large sum of money and may come at the cost of other financial needs, obligations or opportunities. Before making the decision to spend your available cash on a car, take measure of your financial situation and consider the following:

  • Maintaining an adequate emergency fund of $1,000 (and work your way up to a fund of 3-6 months of basic living expenses)
  • Paying extra towards high interest rate consumer debts to pay them down or pay them off.
  • Saving towards other large goals such as a home down payment, education, or even a vacation. 

So, before you spend your cash, review your finances and begin a plan

 

Thanks,

 

Melani