The vast majority of people get their new car on finance. Even used cars are financed these days. The choice of paying for a car this way is because there are some benefits to having a car loan.
1. Buy now, pay later
Waiting to save money to buy a car with cash can take years. Financing a car means you can get it years earlier. Certainly, for having this luxury there is a price to pay in the form of interest. The interest on car loans is not that high and depending on your credit score, you may even get a very good deal.
2. Can be tax-deductible
If you finance a car as a business expense, it can be tax-deductible. Tax laws can be different from one state to another. Check if you can claim the interest on the loan, repairs, servicing, and insurance premiums.
3. The car is the collateral
A secured car loan means that the car is collateral. One of the many benefits of having a car loan is that if you no longer pay the monthly premiums, you can just return the car and no other asset under your name will be at risk.
4. Builds your credit score
This is rather easy to understand. If you have a car loan and you are always on time with your payments, your credit score will go up. This type of loan influences your score more than any other type of personal loan or financial product.
5. You can get freebies
One of the benefits of having a car loan is that you can get some useful freebies. These freebies are usually offered by the financing company. It can consist of many different things such as free gas, servicing, free insurance for a limited time, and many other small bonuses that will add up in the end and will save you some money.
