Finacing a car

Potential Pros of Financing a Vehicle

While we would all like to be able to pay for our next vehicle using cash that we’ve saved up over a number of years, sometimes life just seems to have other plans. For this reason, most people end up financing a vehicle. But are there some potential pros to financing a vehicle purchase? Let’s consider a few.

The Potential Pros of Financing a Vehicle

While there are certainly some potential negative aspects to consider when financing a vehicle, there are also some potential benefits too. Here are just a few.

You can buy a newer (more reliable) vehicle

If there’s one thing I’ve learned in life when it comes to buying a vehicle, it’s that buying an older one is a very risky business indeed. Sure, you may get lucky and manage to find a vehicle that doesn’t give you any problems at all, even though it is a good few years old or has a lot of miles on the clock. More often than not, though, this simply doesn’t happen. In my experience, older cars tend to spell potential trouble. Financing a vehicle can enable you to buy a newer – and often more reliable – vehicle. If you can afford to buy one that is just a year or two old, then you will also have that added benefit that it will come with some kind of manufacturer warranty, meaning you can sort out any problems that you find before the warranty period ends.

Leaving cash available for other things

Another potential benefit of financing a vehicle purchase can be that it leaves cash available to use for other things. While I don’t think that you should finance a vehicle just so that you can have money left over to do something frivolous – like go on an expensive family holiday or buy a new overpriced TV – if you use the money you have left over to do something more positive like putting a deposit down on your own home or perhaps even starting your own business, then we can see that financing a vehicle could free up some cash to help achieve some major life goals.

Building your credit rating

Another potential pro of financing a vehicle is that it can help you build your credit rating, which can help you get a mortgage when the time comes and you have a deposit available. One thing to keep in mind here is that you are also taking on a new financial commitment, which will be visible on your credit report, and this might affect the amount you are able to borrow for other things in future when lenders check to see if you meet their affordability criteria.

We can see that the idea of financing a vehicle purchase with a reputable lender might not be a bad one in all cases. Still, it’s good to consider the potential cons of buying a vehicle this way too. This is something that we will discuss in a future post, so stay tuned for that one!

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