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Take advantage of 0 % financing, or pay cash?

There are quite a bit of rebates offered on the purchase of a new vehicle, as well as significantly low-interest alternatives throughout the year. That said, it seems that there are more discounts at this time of the year. These discounts include plenty of no-interest financing options as well as large discounts on the purchase of a new vehicle when you pay cash.

financing or cash payment

For many consumers, it can be difficult to determine which offer is the most advantageous. Even if you do not have enough money in your account, you can always borrow from the bank and benefit from the discount offered by the automaker when paying cash, which could still be the best alternative even if you are paying interest on that loan from the bank.

“What ultimately matters is the difference between the total amount of the vehicle you can finance at 0%, and the amount of the bank loan with interest less the manufacturer’s discount when paying cash. If this amount is less than the total amount financed at 0% for the vehicle, it is better to borrow, “said a financial representative at Whitby Toyota.

Even if you do not borrow from the bank and you have the total amount needed to buy the vehicle in your account, it may be wise to sit down with a financial advisor nonetheless. What you need to know is that this amount in your account will earn you interest when invested. If you withdraw the sum, you lose the returns that can be bigger than the amount of the cash discount. With 0% financing, you do not have penalties and the money stays in your bank account to accumulate interest.

As you can see, there are several variables to be taken into account when determining which solution is the most advantageous.

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