Numerous car loan packages are very tempting nowadays, especially to those with monthly salaries like teachers. Offers like zero cash out or lower cash out with the lowest monthly amortization are highlighted to catch customer’s attention, especially those who hardly thought of owning their dream car on a cash basis. According to Evans (2017), it may be tempting to go for lower monthly payments with a longer-term loan, the difference between a three-year and five-year loan on the same car at the same price with an identical interest rate can add up to thousands of dollars in payments.
Buying a new or used car is not just checking your total net salary or moreover your gross salary, but you should check first and foremost your available cash on hand after paying your monthly bills and setting aside a budget for your expenses up to the next paying day. According to Zoleta (2018), for many millennials, buying a car is something to cross off the bucket list. Having that first set of wheels means you are on the right track to becoming a full-fledged adult. Even so, it is advisable if you had money-lots of it-for your most significant investment ever.
However, what if you do not have enough savings to buy a new one or do not even have available cash to buy a used car. Through the tight market competition in the car industry, you can avail a car loan with monthly payments rather than shouldering in one-time full payment. Remember, having a car without emergency cash on hand is not quite the right decision, after all.
Once you have determined to have your dream car on an installment basis, your second simple tip is to make at least a simple computation of your monthly cash flow or determining the readily available cash for your soon-to-be monthly car loan installment payment.
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