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Thread: Car Loan vs. Cash

  1. Account Closed
    BumbleBeep's Avatar
    BumbleBeep is offline
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    Jun 2009

    Car Loan vs. Cash

    DF and I both have our own vehicles, however this year alone he's had to replace the engine, transmission, just broke his rear end.... We've gotten used parts for fairly cheap vs. having to purchase a new car. He wants to keep the car for long term as a project vehicle. After deployment with the money we've planned on getting him a good DD so we don't have to keep paying tons to just keep his vehicle rolling. Currently I have great credit my score is 735 or something his on the other hand is in the high 500's. Now I have no idea how marriage is going to effect that but either way he needs to get his in much better shape.

    He really hates financing and doesn't want to have to take out a loan. But I'm thinking if we were to put a large down payment on the new car and just put the rest of the money in an account so it's untouched and let the loan come out of there. It will be payed on time in full everytime, that this could help his credit score. Yes we would have to pay interest this way but i'm thinking it might be worth it. Does anyone know if this would really effect anything?
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    carolinagirll's Avatar
    carolinagirll is offline
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    Sep 2008
    Sounds like a good plan and you already know the pros and cons. PLUS it will help your credit.
  3. MilitarySOS Jewel
    *skittles*'s Avatar
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    MilitarySOS Jewel
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    Mar 2009
    Dh and I have the cash to pay off his car loan right now, but his credit was kinda shady so we're going to make payments on the car for one year and then pay it off in full.

    I think a lot depends on the interest rate you get too. Ours was about 4.9% and we are keeping the cash for our car in a money market thats maybe making 3% interest. We're still losing money...but for us it was worth it.
  4. Senior Member
    instant_oatmeal's Avatar
    instant_oatmeal is offline
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    Apr 2006
    Having a loan and paying it on time will definitely help!

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