Even if you don’t have the entire amount saved up in cash, there are other ways that you can purchase a 2018 Honda vehicle. You can finance the purchase, use credit cards, or combine a cash purchase with either financing or using credit cards. Whichever option you choose, it’s imperative to determine what financial situation works best for your budget and future plans before signing on the dotted line. Keep reading to learn more about your payment options.
When shopping for a 2018 Honda, opt to pay in cash if you have enough money saved and won’t end up broke. You might receive a discount on the price if you mention that you’re paying the entire amount in cash. The biggest benefit from paying in cash is that you avoid paying interest. For instance, if you were to finance a $20,000 vehicle with a five-year payment plan at 6 percent interest, you would end up paying more than $3,000 in interest.
Using a credit card to purchase your 2018 Honda is a great way to take advantage of rewards such as airline miles or cash back. Using the $20,000 vehicle as an example again, think about what benefits you would receive by using a credit card. If a particular card offers 1 percent cash back, you would earn $200.
Just like paying with cash, it’s vital to have the money available to pay off your credit card when the payment is due. If you fail to do so, then it doesn’t make sense to use credit cards as a form of payment since you will end up paying more in late fees or interest.
Before using your credit card to pay for the vehicle, you should know the credit limit on each of your cards, particularly if you plan to split the payment between two or more cards. You can also contact each credit card company to see whether you can get an increase in your credit limit. It may take a few days for the increase to take effect, so make sure you do this a few days before you plan to make your purchase.
When you finance your Honda, you have to pay interest on the money you borrow. Keep in mind that, depending on your credit score and how much you finance, you might end up paying thousands of dollars in interest. It’s best to have a monthly car payment that is 20 percent or less of your disposable income. You can always use a car affordability calculator to determine how much you can afford to spend based on your budget.
Going back to the $20,000 vehicle option, if you finance the Honda for five years at 6 percent interest, you will have a monthly payment of $387; however, over the course of the loan, you will end up paying more than $3,000 in interest. Further, if you spread out the payment over 10 years, your monthly payment drops to $222, but you will pay more than $6,000 in interest.
You have several options when it comes to paying for your 2018 Honda. To speak with someone about purchasing one of these vehicles, reach out to the professionals at Honda of Roanoke Rapids.