Apollo Finance

Should you pay cash or use finance for your next car purchase?

If you are asking the question ‘ should I pay cash for my next car?’ we can help with your decision.

So it’s taken you a few years to save up a substantial amount that you could use to buy a new car, you should be congratulated on your effort and advised to use that money to your best advantage.

Cars are eventually worth nothing compared to the price paid at the dealership when new and this is the key.

You have saved and saved and watched your bank balance grow and compound further. Now it has a healthy balance over your buffer that you can spend on something. Lets say you buy a car with this money – immediately the car starts to depreciate and lose value until it’s worth nothing. This would mean your savings that took you years to accumulate would not increase in value further but instead disappear into the wind over the proceeding years and leave you with nothing but an old car, unreliable and out of warranty.

Our advice would be to use those funds on something that will appreciate in value, an investment property would be such an item. You could use those savings for the deposit on an investment property loan. Over the next 5-10 years you would expect to see an increase in value and actually make you better off. We can put you in touch with the right mortgage people to discuss this.

Cars being a depreciating asset are the perfect item for a business chattel style car loan. You can still claim the GST for your business in the same way as paying cash and you will get excellent tax breaks also, let us know if we can connect you to a great accountant for some advice.  By using finance for the purchase your cash flow is free’d up; with only a monthly payment for the use of the vehicle over it’s usable life – instead of the lump sum cash outlay, that’s just smart business.

Call us for a quote to find out why it’s far more sensible to use finance than pay cash for your car.

Apollo Financial Solutions 1300 792 760