What are the differences between buying a car in full payment and with a loan?
2 Answers
The differences between buying a car in full payment and with a loan are as follows: 1. Different payment methods. When buying a car in full payment, the entire car price is paid to the 4S store at once, and then the vehicle purchase invoice is issued. However, when buying a car with a loan, you only need to pay a part of the car's base price. The specific amount depends on the proportion you want to pay, usually a 30% down payment, and now the minimum can be as low as 10%. The remaining amount is paid through installments. It's similar to buying a house with a loan, where you deposit money into the bank every month, and it will be automatically deducted. 2. Different required documents. If you buy a car in full payment, generally only an ID card is needed, which is required for issuing the invoice and registering the license plate. However, buying a car with a loan usually requires more documents, typically including an ID card, driver's license, bank card, and sometimes bank statements and proof of residence may be needed if going through a bank.
Here's my take on this. Paying for a car in full means settling the entire amount at once, avoiding debt and monthly loan payments. The biggest advantage is saving tens of thousands in interest and financial service fees, keeping the banks from fleecing you. The downside is it drains your savings, and maintaining liquidity is crucial these days. Like when my family paid cash for a car last year, we got stuck when home renovation funds ran short. It's frustrating when promotion opportunities or good investments come along but you're cash-strapped. Another issue is rapid depreciation - a $30,000 car might only be worth $15,000 after three years, whereas that money could have grown in fixed-term deposits.
