Should I Finance or Buy a Car with Cash?

Two people shaking hands over a financial agreement

Pros & Cons of Buying a New Car with Cash in Sudbury, ON

So, you’ve saved up enough money to fully purchase a vehicle in cash. Good for you! Now that you’re searching for a new ride, you’ve come to a crossroads, deciding whether to use up that cash on a vehicle purchase or take out an auto loan and use the cash for other opportunities. We here at Auto Depot Sudbury are here to help. That’s why we’ve highlighted the pros and cons of purchasing a vehicle with cash so that you can make the right decision that suits your situation.

Read More:

Car Financing Myths & Misconceptions

Happy man with car dealer buying a car signs the contract in car showroom


1. No Interest Payments

Buying a new car with cash allows you to avoid paying interest on a loan. Financing a car through a loan typically incurs interest charges, depending on your credit score. By paying with cash, you eliminate this expense, saving you money in the long run.

2. Negotiation Power

Cash buyers often have stronger negotiation leverage. Sellers may be more inclined to offer discounts or additional perks to customers who can make an immediate and full payment. 

3. Ownership and Flexibility

When you buy a car outright, you own it outright. There are no monthly payments or restrictions on the vehicle. This gives you more flexibility in how you use and maintain the car, and you have the ability to modify or sell it at any time without the constraints of a loan agreement.


1. Reduced Access to Liquid Cash 

Using a significant amount of cash for a car purchase may impact your overall financial liquidity. It ties up funds that could be used for other investments, emergencies, or opportunities. 

2. Limited Credit Building

Making a cash purchase doesn't contribute to building or improving your credit score. If establishing or building your credit history is a goal, financing the car through an auto loan and making timely payments could be more beneficial for you.

3. Missed Investment Opportunities

If you have access to low-interest financing options, paying in cash means missing out on potential investment opportunities. Instead of using cash for a car purchase, you could invest the money elsewhere and potentially earn a higher return than the interest rate on a loan.

Now that you’re aware of the pros and cons of purchasing a vehicle with cash, you can make an informed decision of the route you want to take. When it comes time to purchase your next vehicle, make sure to browse through our inventory of high quality vehicles here at Auto Depot Sudbury, your premier Northern Ontario pre-owned dealership.