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Dominic Perry
February 07, 2020
Should I use my savings or get financing for a new car?
Currently I have enough to get the car I wanted for years. But I honestly don't know if it is a good idea to put down all my savings for it or is it better to get financing for it? Thx
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Kreditiweb
Asesor financiero
February 07, 2020
Kreditiweb
Asesor financiero
February 07, 2020

Hello Dominic,
Getting a new car can be exciting until you start thinking about a way to finance it. If you have the cash available, the cheapest way to get the car is using your savings. By doing this, you will avoid debts and enjoy your financial freedom.
However, getting a car loan or any sort of financing can also help your savings grow. Even though you will be paying interests, you can make your savings grow in a savings account or by investing it. This option is only beneficial when the rates you will get for the car loan are not too high or higher than the estimated earnings you would get from your money.
For that, you will have to analyze the APY of the savings account you will put your money at and compare it to the interest rate you will pay for the loan. If the amount of earnings in your savings is higher than the interest rate you will pay for the loan, you should get financing for your next car. On the other hand, if your loan is going to cost you more than the interest you will earn on your savings, we recommend using your savings and staying in good financial health.
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