Owning a car could mean a lot to many. People do not buy it only to get to places; it can be a dream of their life.
91% of American households have access to a means of transport. If you’re not part of this demographic, should you get one? There are often conditions why you should and should not.
The following are three ways to get a car and their pros and cons. Choose the one that suits you:
Purchasing
As the term suggests, you purchase a car. It would be perhaps your first response to someone who wants a car. It typically involves a lot of money, but you will own the car entirely and owe the shop nothing afterward.
Who Should Purchase a Car?
To purchase a car, one must have the necessary funds. You do not necessarily have to be very rich. You can save a specific amount of money to purchase a car. You may also need a garage or a parking space to park it.
You must start saving for a car if you need one. It applies to those who need to travel a lot, whether for work or other essential chores. Someone with a family would also need a car, especially large families.
Pros and Cons
Buying a car has its pros and cons. One of the most significant advantages of buying a car is that you get to own your vehicle right away.
As for its disadvantages, the first can be the car’s cost itself. While it may not be a problem for a well-off person, anyone struggling with money might find difficulties affording it.
Gas and maintenance can also cost you money, depending on how often you use them. Hence, you should have the finances for car maintenance or at least be eligible for car repair financing. This way, you wouldn’t have to worry about costs when you’re met with car troubles.
Car Renting
Another thing you can do to get a car is rent it. Renting is a way of borrowing it for a particular fee. It’s different from purchase as you can only use the vehicle temporarily. You might be required to submit several documents, which you should prepare in advance.
Who Should Rent A Car?
The people primarily suited to rent don’t necessarily need one for their private lives, and those who tend to travel from city to city or farther regions and countries. The choice to commute is there, but it’s for the ones who want to experience other cultures without the hassle of commuting.
Alternatively, you can also rent a car if you want to know how it feels to own one, like a trial period. You can see how it works for your daily activities as a precursor to buying one if you decide to purchase.
Pros and Cons
The best advantage of renting a car is that it generally costs less than buying it. The shorter time you rent the car, the cheaper it will be. Even some long-term car rent may be less expensive than purchase, especially if it’s a secondhand model. Committing to it short-term means you won’t have the financial burden for gas and maintenance.
Temporarily owning a car does not necessarily have a negative impact. However, you may have issues with the rental company, depending on which one you choose. They may charge you fees they did not disclose.
The typical things they tend to charge you would be damage, late pickup, or even fuel charges. The good news is, if you find the charges unfair, you can dispute them.
Car Financing
Another option you could opt for is financing. You can buy a car and pay in installments with interest. Typically, car companies or shops offer this if you do not have enough money to purchase it in full.
Alternatively, you can pair up with a lender who can offer you the funds. You may get something like an auto loan, a rent-to-own, or leasing of a vehicle. You could even get a personal loan and buy a car.
Who Should Finance a Car?
People who finance a car want and need it but cannot pay to buy it in full. However, you should be able to have enough money to cover the interest rates that come with financing it, as well as for your typical car expenses.
Pros and Cons
Financing a car also has its pros and cons. The primary advantage of this is that instead of buying it in full, which can be too expensive, you can slowly pay off your debt every month. Cars can be so expensive that an average person may not be able to earn or save enough money for almost any vehicle in a short time.
On the other hand, it could be a disadvantage to many. Some might not get a loan at all. You may fail to qualify for the financing, especially with a low credit score. And even if you get a loan, the interest rates will be high. Multiple debts cause a low credit score because that’s how loans affect your credit score.
In Conclusion
Before thinking of owning a car, make sure to consider if you need one in the first place. If you decide to get one, think of the best option for you. Don’t forget to explore all the options you have and make the most out of them.