Car loans have become very popular in recent years. People all over the world borrow money to purchase their personal vehicles. Even in third world countries people are starting to utilize the power of financing. It is natural then to think that if you had enough cash to buy a car detailer you want, you would not need an auto loan. However, a lot of very wealthy and rich people still use auto financing, while they could easily pay cash for their vehicles. What is the reason behind this?
The reason is rather simple, rich people prefer to invest their money in order to make even more money. They find investments that will yield them more interest, than they would spend on a car loan. Auto financing allows these rich individuals to free up as much as funds as possible and put it towards investments such as stocks, bonds, real estate and others.
However, just because you are not rich doesn’t mean you cannot use the same type of strategy with your finances, if you have some cash saved up. Car loans can easily enable you to use that cash towards investments instead of blowing all of it on a car. After all the car is going to depreciate, while the investment will grow year after year. This is exactly why car financing is so popular nowadays among people of any income level. For middle class people car loans allow to get car right now instead of waiting years to be able to afford one. The high-income families still finance their vehicle, so they can use their funds in a more productive manner.
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This entry was posted on Tuesday, September 28th, 2010 at 5:47 am and is filed under Auto Loan. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.