Buying anything with cash is cheaper unless you’re getting some type of zero-APR financing and you pay off the loan before interest kicks in. However, interest accrual is rarely the only concern people who are financing a purchase have when making their decision.

Buying a vehicle is a financial commitment that you need to be prepared for, whether you pay cash or finance the purchase. Saving money on big expenditures is a goal for most people, but how you go about doing it really depends on your circumstances.

How Paying for a Car in Cash Can Save You Money

When you pay for a car out of pocket you avoid a potentially large sum of interest that accrues when you take out an auto loan. Depending on your loan’s APR, you could end up paying hundreds of dollars more in interest each month.

With a high interest rate and long term, they could end up paying thousands of dollars more than what the vehicle is worth. If you pay cash, you are agreeing to the sticker or negotiated price. No more and no less.

New cars depreciate very quickly. Most cars lose 20 percent of their value the first year, but your loan amount won’t change to reflect that valuation. You will end up paying far more than what your car is worth on financed new car purchases.

Not only might the value of the vehicle be far below the principal of your loan after just a couple of years, but you’ll also be accruing interest on that initial price – not it’s depreciated valuation. Many people who finance new car purchases end up upside down on their loan, especially if it is a long-term loan.

If you pay cash, you get the car for what it is worth.

Financing used vehicles is a little different. There’s no steep initial drop off in valuation after the first year of ownership. The more gradual depreciation of a reliable preowned vehicle negates a lot of those problems inherent with financing a new vehicle.

While paying cash can save you money in the long run, it is also a preferred form of transaction when it comes to the seller in most cases, especially private owners.

Buying a vehicle off a private owner with financing can be difficult. It is harder to get approved, and many lenders will not lend to you for a private vehicle purchase. Cash is king ultimately, and sellers often go down on the price of the vehicle if you do pay in cash – even dealers. It saves everyone time and money.

When Financing a Vehicle Is Better

Transportation is an investment that makes sense for a lot of people. It might let you get to your job and make more money than you would if you had not owned a vehicle, in which case you end up making more thanks to the car than you ultimately pay in interest or cash.

Car shoppers need to make a value judgement on what their transportation is worth and whether their finances can handle paying cash. In many cases, draining your savings just to pay one lump sum of cash is not the best decision. It may be more financially sound to use a part of your savings for a down payment and then paying off the remainder over time.

The more that you put down the lower you can get the loan term or monthly payment. Then you will accrue less interest over the life of the loan and still have money left in your pocket.

Financing is also a better option if you need to build credit. Making regular payments on a vehicle is a great way to build credit. The only downside to this is that you may have a higher interest rate at first, but with consistent payments and a little time you can refinance your vehicle and get a lower rate. In the long run it makes you more eligible for other large purchases.

Financing your vehicle might also come with some perks you wouldn’t get by paying cash. Depending on who your lender is, you might qualify for better warranties, dealership maintenance and a buyback guarantee. If you purchase a car in cash and it breaks down the next week, your ability to return it could be questionable.

It Is Okay to Finance a Car in Washington, DC or Baltimore

You should always weigh your options before committing to an auto purchase, whether it’s with cash or an auto loan.

Easterns Automotive works with every customer to get them the financing that makes sense for their circumstances. As a trusted and experienced dealership in the Washington, DC and Baltimore areas, we are excited to get you in a new vehicle that you can feel good about.

You don’t have to drain your savings to be in a new preowned vehicle today. To learn more about our auto loan options call us at 888-650-4775 or visit us online to get pre-approved.

Your credit score significantly affects your ability to finance major purchases. The credit scoring system is attended to assign risk to borrowers and predict their ability to pay their debts. In general, the more credit that you have, like loans or a credit card debt, the lower your credit score will be – at least if you have a history of not paying it back. On the other hand, having debt and making payments on time can help improve your credit score.

Credit scores are a complex topic, and a bad one can prevent or complicate the process of buying things like homes, renting apartments or even buying a car. You can purchase a vehicle with a low credit score, but the annual percentage rate (APR) of the loan you get might be high.

APR is the yearly interest you will be accruing on the money you borrow. You can determine your monthly interest rate by dividing your APR by 12. As a rule of thumb, bad credit scores mean higher APRs, while good credit scores result in lower APRs.

Credit scores vary greatly among individuals depending on their debt history. Even if you have never had a credit card or taken a loan out, your credit score might be low because the system has no way to judge your financial trustworthiness. That is why some experts recommend young people get credit cards to build their credit score. 

As you make those monthly payments and pay something off a loan, the actual dollar amount you’ll accrue will go down since the accrual rate is just a percentage of the principal – or what’s still left outstanding on your loan.

APRs also differ based on the type of purchase. For example, a home mortgage or credit card may have a very different APR for you than your vehicle loan.

The APR that you want to avoid the most is a penalty APR, which is a special even higher interest rate that is triggered by being late on payments. Penalty APRs are most commonly associated with credit cards, and they’re one of the reasons why it’s so important to avoid carrying a month-to-month balance on your credit cards. Triggering penalty APRs will lower your credit score.

Auto Loan APRs

There are really three important loan-related numbers that are relevant to car buyers who want to finance their purchase:

• Credit score
• Your pre-qualified or pre-approval loan amount
• APR

Your credit score will determine how much money you are eligible to borrow to finance a car purchase and the APR you’ll be charged on that loan.

A credit score should not keep you from getting a vehicle, at least not at every dealership. Our slogan at Easterns Automotive is “Your Job Is Your Credit®”. Even if your credit score is less than perfect, we can work with you to find a financing solution.

We sell cars to people with high and low credit scores and work with more than 30 lenders to find an auto loan option that meets each customer’s financial needs.

It’s worth noting that the best way to improve your credit score is to get financing, make your monthly payments on time and eventually paying off your loan. We truly believe our efforts to find auto loan solutions to every person, regardless of their credit, is a public service to customers with less than perfect credit. We want to be part of your credit healing journey.

Get a Great Pre-Owned Vehicle with the Best APR Possible in Baltimore and the DMV

By working with more than 30 lenders, we’re able to shop each used car customer around to find a lender that’s willing to offer them the money they need at the best APR possible. 

We also offer a simple and secure two-step credit form that helps ensure you go into your financing search with the knowledge you need to make an informed decision. 

Credit scores are a fact of life, but a high APR isn’t an inevitable part of the car buying process. Contact us at (888) 650-4775 or visit one of our many locations in the Biltmore and Washington, DC area to learn more about vehicle loans that works for your finances.

Shopping online is preferred by many. You don’t even have to leave your couch to buy anything from clothing to cleaning products. Online car buying has also been increasing in popularity. You can browse millions of cars online from all around the world, but unlike clothing, books or gadgets, cars are big, expensive investments.

Car shopping can be challenging. You might want a reliable, budget-friendly model, or maybe even a vehicle that’s sporty and filled with the latest features. Finding the right one is frequently easier said than done. 

The internet allows you to browse a wide variety of models without having to drive anywhere or spend any time in a dealership. Browsing online can save time and reduce the effort normally required for such a big purchase. You might even enjoy looking at several cars without the hassle of a car salesman. 

Even people who aren’t going to purchase a vehicle online tend to browse selections, check customer reviews and calculate potential car payments through research on the internet.

Dealership websites often have detailed photos of preowned vehicles and lots of features and facts listed for each car, truck or SUV in their inventory.

But when it comes down to the actual purchasing transaction, most car buying is still done in person.

Cons of Online Car Buying

While there are many pros to looking for a vehicle to purchase online, there are many cons.

• The biggest con is you don’t get to inspect or test drive a vehicle before you purchase it. In a survey done by Autotrader, 67 percent of people said they had to test drive a vehicle before purchasing it. They consider it to be an essential part of the buying process.

• If you’re using a specific app to purchase a vehicle you lose the ability to visit multiple dealerships to get them to compete for your business.

• Purchases online also may not include a breakdown of the costs included in the purchase of a vehicle. As a result, some additional fees might get charged without you noticing. 

• Shopping online also makes financing a vehicle more difficult. The choices may be limited, and no one is there to shop around for different financing companies for you. Some online purchases may limit you to certain lenders and restrict you from additional options. 

• Buying online complicates the trade-in process. Although some companies offer pick-up and delivery, you could get shorted on the full value of your vehicle. 

• Many online car buying platforms offer generous return policies, but they are still a hassle. Getting your hopes up on a great pre-owned vehicle then having to deal with returning it and going without a car again is frustrating.

The Best of Both Worlds in Car Shopping

Easterns Automotive tries to give you the best of both worlds with Direct Car Buying.

DirectCarBuying.com allows car shoppers to browse a large selection and have the car they want delivered to a dealership closest to them. This method allows the buyer to shop online and not have to travel far to pick up a great pre-owned vehicle. They also have a chance to see the vehicle before they take it home.  

Online inventories are great for new and used car buyers. Easterns Automotive has a substantial online inventory with nearly 1,000 vehicles for sale in the Washington, DC and Baltimore area. We aim to make car buying as simple as possible for customers.

While buying a car online is appealing to many people, seeing the car in person is always ideal, especially if it is a pre-owned vehicle. You want to confirm the quality of the vehicle and make sure you get what you are paying for.

Call us at (888) 650-4775 or come into one of our many locations and test drive a car today.

There are several reasons why selling your vehicle to a local dealership is a better, more convenient option for most car sellers in Baltimore, Washington D.C. and Maryland:

• It’s straightforward and nearby
• You might have an existing relationship with the dealership
• You don’t have to deal with the logistics of selling a car online
• You’ll be working with a registered business that use properly secured transactions

Trust and Reputation

It’s not in any dealership’s interest to take advantage of people selling their cars. Local dealerships have a reputation to uphold, and they want you to come back to them the next time you want to buy or sell a vehicle.

If a dealership takes advantage of you, treats you poorly or gives you a bad deal, they are essentially losing a customer forever. That customer could also tell their friends about a dealership’s bad behavior or vent about their treatment online. Any dealership that wants to maintain a good reputation must treat customers fairly. Loyalty doesn’t matter to online marketplaces. They might have hundreds of thousands or even millions of customers worldwide – losing your business or getting one bad review doesn’t mean anything to them.

Do You Know How to Sell a Car on an Online Marketplace?

Unless you’ve already researched or gone through the process of selling a car online you might not have any idea how it works. Selling a car to a dealership is simple and intuitive:

1. Get an offer
2. Drive the car to the lot
3. Exchange your keys for a stack of bills or a check

To sell your car on an online marketplace, you usually have to:

1. Download an app, make an account and figure out how to use it (you’ll also likely get spam emails for the foreseeable future)
2. Take lots of pictures of your vehicle, inside and out and from all angles
3. Go through the process of filling out all your vehicles information
4. Write a report on your vehicle’s condition, history and warranty
5. Enter the price YOU want
6. Decide where and how your vehicle will be listed in the marketplace
7. Depending on the marketplace you may need to meet prospective buyers for test drives or inspections
8. Once it sells you have to get it to the buyer  

Some online marketplaces are also hotbeds of scam artists and creeps.

There’s no guarantee someone you meet from Craigslist is going to be safe. You can maybe report scammers and dangerous people to the platform, but the offenders can just make a new account and keep doing what they’re doing.

Some of the better online marketplaces will come pick your car up when you sell it. These higher-end platforms take extra steps on their end to make the process less cumbersome for car sellers, but in many of those cases the marketplace ends up taking a bigger cut of the sale since they’re putting in so much of the work.

Local dealerships are easy to use, and you have an opportunity to negotiate and exert more agency over the process.

Peace of Mind and Security

Meeting up with random strangers for a car inspection, test drive or to exchange your car for cash can be dangerous and unpredictable. Handshake deals and cash exchanges aren’t exactly secured. There’s little to no recourse if the check they give you bounces, or if you’re the buyer and you find out the title isn’t clear when a repo man tows your new car off.

A lot of car buyers also want some kind of guarantee of reliability and quality. They’ll want to see Carfax or some other kind of preowned certification or warranty. If you’re selling on a marketplace or you’re just listing your car on Craigslist or a similar website, any warranties or certifications you offer will have to be done by you.

In many cases certified preowned vehicle warranties are transferable, but the new owner will need to let the manufacturer know the vehicle has changed hands. A lot of automakers charge extra fees for warranty transfers.

If maintaining the certified preowned warranty is important to you or you’re using it as a selling point, you should look into the transferability of the warranty. Some automakers have special rules that may or may not invalidate warranties if you sell a certified preowned vehicle.

Avoid the Headache

Whether selling your car on an online marketplace will net you more or less money is debatable. Chances are any difference will be negligible, especially now when preowned vehicles are selling for record high amounts.

If you want to get a great price on your vehicle sale, call Easterns Automotive at (877) 867-4212. We’ve created an easy process that allows you to sell us your car for cash way more quickly and easily than any online marketplace. We can give you an offer in three hours and you can finalize the deal right afterwards. No meeting prospective buyers for test drives in parking lots, no need to create a picture gallery of your vehicle and no paranoia about whether or not you’re getting a fair deal.

Let Easterns Automotive make your car sale easy – call or visit one of our lots today!

Yes – at least at Easterns Automotive Group. You can sell us your car for cash without buying a different one from our lot. Whether a dealership will buy your vehicle outright – and what they’re willing to pay – is highly dependent on the dealership.

Some dealerships may be less likely to take some vehicles. A dealership that just sells sports cars or luxury brands may not be at all interested in purchasing a 2005 Toyota Camry or a 2003 Jeep, even if your vehicle still has a lot of miles left in it.

At Easterns Automotive, we’re not brand, year or model elitists. Even if your car has problems, we may still be able to work something out so you can at least get some cash or at the very least credit towards a new vehicle.

Car owners in Baltimore, Washington D.C. or anywhere in Maryland that want to sell their car, truck or SUV should fill out the vehicle sales form on our website – we’ll send you an offer within three business hours.

Why Are Used Cars in Such High Demand in 2021?

Every auto sales expert seems to be in agreement – there’s a serious car shortage in 2021. The shortage has increased the valuation of preowned vehicles by quite a bit, which is good news for people who want to sell their used vehicle for cash or as a trade-in.

In March, Edmunds found that the average trade-in was being valued at $17,080, a 21 percent increase from March 2020. The average preowned vehicle sales price was at $25,463 in April, roughly $2,800 more than the average price in April 2020. According to J.D. Power, the April 2021 average used car price went over $25,000 for the first time in history. 

What’s Causing Used Car Prices to Go Up?

It’s a bit counterintuitive, but one of the main reasons for the increased price of preowned vehicles is a shortage of chips for new cars. The difficulty manufacturers are having getting enough chips has resulted in fewer new cars being made, meaning a lot of dealerships have fewer new cars in their inventories.

The pandemic also caused the temporary shutdown of many car manufacturing factories, which meant many companies lost at least two months of production in 2020.

Analysts and dealership experts also suspect leasers are deciding to hang on to their leased cars, trucks and SUVs longer than normal, which has meant fewer previously leased vehicles are entering the used car market.

Another interesting pandemic-related reason for the new and preowned car shortage has to do with rental car services. One of the biggest sources of preowned vehicles for sale are rental car companies that sell off their “old” rental cars.

Rental car companies usually keep their vehicles for between four and 22 months, which means they represent a frequent infusion of used cars into the preowned vehicle market. During the pandemic, when very few people were actually traveling and renting vehicles, those rental car companies had no reason to purchase new vehicles. That means the 2020 rental vehicles that should be entering the 2021 used car market aren’t materializing.

The scarcity of new vehicles has also changed the way rental agencies are purchasing vehicles, with many opting to hold onto vehicles longer rather than overpaying for scarce new vehicles. Companies like Hertz and Enterprise have actually begun purchasing preowned vehicles when it becomes necessary to replace vehicles in their fleet, which is a pretty rare move for the rental car industry.

While those complications have, in most cases, been a negative for new car manufacturers and dealerships, they have resulted in a significant increase in preowned vehicle sales. TrueCar estimates that 3.4 million used vehicles were sold in the U.S. in April 2021, which is a 58 percent increase over April 2020. The increase in used vehicle popularity has further stressed the supply of available preowned vehicles. Dealerships had about 18 percent fewer used vehicles available for sale at the start of April 2021 than they had in April 2020.

Why Does This Matter if I Want to Sell My Vehicle?

The current scarcity of both new and preowned vehicles has resulted in an increase in the valuation of used cars, trucks and SUVs.

To put it simply, 2021 will be a historically good year for anyone selling their vehicle, since valuations on preowned cars are likely to stay high until the chip shortage is over and the supply of new vehicles begins to normalize.

If you want to take advantage of this opportunity and sell your vehicle, call Easterns Automotive at (877) 867-4212. We’re always happy to accept preowned vehicles for trade-in or cash – whichever you prefer.