Why Is Car Loan Cheaper?

[OReagan]

Paying in full is actually cheaper than taking a loan when buying a car. Below are detailed introductions to both payment methods: 1. Paying in full: (1) Advantages: Full payment means settling the car price at once, avoiding many fees like handling charges and interest. The process is fast with short approval time, and you can often pick up the car the same day. For insurance purchases, you won’t be bound by loan contract restrictions. (2) Disadvantages: Requires a large sum of money upfront, which can be inconvenient for cash flow needs, and the purchased vehicle immediately enters a depreciation cycle. 2. Car loan: (1) Advantages: No need for a large upfront payment—only 20% down payment is required, with some lenders even offering "zero down payment." The remaining funds can be used for investments to generate more wealth. Additionally, a car loan allows early use of the vehicle, providing convenience. (2) Disadvantages: Car loans come with strict conditions, cumbersome approval processes, and additional costs like interest and handling fees. They also increase the risk of falling into loan traps, such as bundled sales or mandatory insurance purchases from the dealership during the loan period.