Auto Financing in St. Louis: Pros and Cons

Purchasing a new or used car is an exciting but expensive investment. Unless you have the cash to pay for the vehicle outright, auto financing in St. Louis is often the most viable option. While auto financing can make owning a car possible, it’s essential to understand the pros and cons before signing on the dotted line. Here are some of the pros and cons of moving forward with financing for your next vehicle purchase with 5 Star Auto Plaza: 

Pros of Auto Financing 

More affordable upfront costs

Auto financing allows you to purchase a car even if you don’t have the full amount to pay upfront. You can opt for monthly installments spread over a period, making it easier to manage your finances.

Builds your credit score

Auto financing can help build or improve your credit score. Making timely payments can show potential lenders that you are a reliable borrower, which can help you secure better interest rates in the future.

Access to better cars

With auto financing, you can afford better vehicles than what you would typically buy with cash. This means you can upgrade to a newer model with all the latest features.

Cons of Auto Financing 

Accumulated interest

When you opt for auto financing, you’re not only paying for the car’s actual cost, but also the accumulated interest over the financing term. This can add up to a considerable amount and make your car much more expensive than you initially anticipated.

Risk of Negative Equity

If you don’t put down a significant down payment or finance for too long, you risk having negative equity on the vehicle. This means that you owe more on the car than it is worth.

Long-term debt

Auto financing is a long-term debt commitment that can last several years. This can make it challenging to manage your finances, especially if you face unexpected expenses.

Contact Us Today

If done wisely, auto financing in St. Louis can be a great way to purchase a car. Considering the pros and cons before deciding to finance your vehicle is essential. To get more information or to speak to an auto financing professional, contact 5 Star Auto Plaza at (636) 940-7600. Our team is always available to answer any questions you may have.