How to buy a used car with no finance

How to buy a used car with no finance

Buying a car is an exciting time in anyone’s life, whether you are a new driver or a dab-hand at all things car related. However, it can be expensive, even more so if you have to take out vehicle finance. The monthly payments can drain resources that could be used on repairing or revamping aspects of your car and you will have to make these repayments for a significant amount of time before the finance is repaid.

Cash vs. finance

When it comes to buying new or old used cars, there are generally two options you can choose from: paying cash or choosing finance. Opting for finance means you will pay it back over time, while choosing cash allows you to purchase the vehicle immediately.

Finance may allow you to choose a better car, but you will find that the repayments carry interest which can increase on a regular basis. If you have an income that has to be spread across many different expenses, buying with cash is a better option. It may limit the amount of money you have available to spend on a car but it is a once-off payment that gives you the independence of a vehicle.

Is cash always better?

Car finance has always been the go-to choice for anyone interested in buying a car. You can choose your dream vehicle and pay it off in relatively affordable monthly increments, but these increments can increase if you have not chosen a fixed interest rate.

Choosing to use cash allows you to pay the exact amount for the vehicle, rather than having to pay an additional amount on top of the price of the vehicle. You should choose finance if you are able to get favourable interest, meaning you will lose less money and will be able to use what cash you would have spent on the car for other investments.

Cash is a better choice if you have the amount you need and have found a car suitable for your needs. It is a good idea to watch what you spend. And if you find a car for less than your cash budget that is in good running condition, you should purchase it and use the remaining cash for any extra expenses you may incur with the vehicle.

Another reason why cash may be a better option is because you may be able to negotiate a discount with a dealer if they know you are paying cash. While finance is an ideal option for those we may not have the resources to save up, dealers are aware of how little room there is for change in the amount.

How to buy a car without finance

It might seem easy to pay cash for new or old used cars, but some novice buyers may not know exactly what to do or how to start the buying process, as outlined below.

Be clear on what you can afford

Many people will rely on the dealer to tell them what they can or cannot afford, but this can be risky. You should draw up an accurate budget to stick to and try not to be swayed by dealers who oversell a car that is out of this budget. Ask them to only show you cars within your price range and bring along a money-savvy friend or family member to make sure you follow your budget.

Don’t be afraid to spend less

Spending less than your actual budget on a car does not mean you are buying a bad car. It may be an older model or may not be in the exact colour you were looking for, but if it is in good running order and is well maintained, you should definitely look into it. You will end up saving money and still getting a well-running car for your next big adventure.

Sell your existing car and use this money, if possible

If you have not been able to save up money month by month, you could look into selling your current carand using this towards buying a new one. Be sure to note, however, that you will not get the amount you paid for your current car back, so be prepared for a lower sale. This is not negative, however, as it will contribute to the overall cash you need to buy the car.

Final verdict

Buying a car with no finance can save you a lot of money in the long run, but you have to be absolutely certain that you can afford it on a cash budget. If you do not have the resources, do not attempt to buy a car with what little you have. Plan your budget carefully and stick to it as close as possible and you will be driving away in a new pair of wheels in no time.


Authored by: Pete Anderson

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