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Cash

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If you have the money available, cash may seem like the easiest and most cost effective payment option.

There is obviously no interest to pay, so the total purchase cost of the vehicle will be lower than if it is financed. However if you do have money in the bank, it is important that before committing it to purchasing your car, you consider what else the money could be doing for you.

Finance rates for vehicles tend to be lower than on many other purchases, so it is sometimes more sensible to finance a car and use your available cash to purchase other items.

In some cases, investing cash rather than spending it, can actually generate a return which is greater than the interest that would be payable when financing your vehicle.

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