Why Is Buying a Car on Installment Cheaper Than Paying in Full?
1 Answers
From a consumer perspective, paying in full occupies a large portion of cash flow compared to installment payments, where only a part of the payment is made upfront. However, in reality, these are just marketing tactics by sellers—remember, there's no such thing as a free lunch. More details are as follows: 1. First, it's essential to clarify: when purchasing a car, paying in full does not involve any handling fees. However, with mortgage payments, unless the manufacturer offers a zero-interest financing policy, consumers must bear two additional costs: loan interest and handling fees (commonly charged). Moreover, zero-interest financing policies may seem to offer significant benefits to consumers, but they might also come with certain restrictions. 2. Because installment payments involve loans: where there's a loan, there are inevitably various fees—interest, handling fees, and beyond that, insurance, inventory fees, deposits, among other 'hidden charges.' When all is said and done, these additional fees can add up to several thousand yuan more.