Owning a car is no longer a luxury for the Indian middle class . With several ways of financing, coupled with the recently reduced Goods and Services Tax (GST) on four-wheelers with smaller engine capacities, many can buy a car today. But when choosing between financing and paying the lump sum cost upfront, you may face a dilemma. Paying upfront from savings means temporary reduced liquidity. Whereas paying through a loan means eventually paying more than the car’s value. So here is a breakdown on which option makes more sense for pre-owned cars. 

Comparing savings versus financing

Buying a used car directly from savings and buying it with the help of a used car loan are two very different approaches.