Buying a car on Cash or Loan?
Hi, we are thinking of buying a new car in Bangalore and contemplating on whether to buy in cash or on loan. Considering the traffic conditions, we only want a small car like i10 or Tiago. We do have cash on hand to buy a decent hatchback or sedan upto 10L. It will not burn all our savings for sure. However, I have seen so many people still buying on loan even though they have cash. Would be interested in knowing what makes more sense for others. Especially want to understand if there are other benefits of loan apart from credit building. Other suggestions on car models are also welcome! TIA.
Pay 40-50% cash rest 5 year loan. Save money for emergency. Invest in good debt mutual fund if you are risk averse.
Pay 20% as downpayment. Rest 80% on EMI for 4 years, Rest all cash. Save for rainy day so that in case of unknown events, you can foreclose the loan Easily.
Btw if Hyundai Exter NCAP comes good, thats a nice vehicle whst I ve heard.
If you are only buying for convenience you can look for a second hand car. It will depreciate slow.
I agree the depreciation will be slower. We did consider this option but after comparing the prices of second hand vs new, it made more sense to buy a new one.
Jordon Lee
Stealth
a year ago
If you're working with an MNC, check if they have a lease program which will save you about 2L overall on a 10L car.
Also kudos to you for choosing a small car. Lots of absolutely stupid mofos living in tiny gullies and buying SUVs.
My spouse’s company does have a good lease program. We haven’t compared it with other loans yet as they only joined in July, but we’ll consider that. Thank you.
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