Having a dream car to transport all family members while traveling is certainly the dream of many people. As an expensive asset, owning a car is a luxury so it takes a lot of struggle to buy it. But lately, improving economic conditions have made the growth of car owners in Indonesia also increase.
One of the factors driving the rapid growth of vehicles circulating on the road is the ease of buying vehicles on credit. The presence of a finance company (leasing) has a significant impact on the growth in the number of owners of these four-wheeled vehicles.
Since ancient times, it has been known that it is best to buy anything with cash. This has become a basic economic principle that will free a person from debt that can be a burden both morally, especially materially.
Advantages of Buying a Car on Credit
If you can’t afford to buy a car in cash and have a big desire to own a car, taking a car loan can be a practical solution. Here are the advantages you can get:
1. If for productive purposes, you can increase capital turnover
Even though it is intended as private ownership, there are also people who buy cars not just for family needs, one of which is to support business interests. If so, buying a car on credit could be the best way. The reason is because the capital turnover can still be maintained.
By buying credit, of course there is no need to pay the entire price. Simply by providing a down payment, the rest can be paid in installments. But of course what must be considered is the liquidity of income from the business in question. It must be maintained so that income is not greater than expenditure, this is of course aimed at preventing arrears and installments from growing and causing the car to be withdrawn by the leasing party which could be a source of loss.
2. Psychologically there is a light impression
The second advantage of buying on credit is from a psychological point of view. There is an impression that paying in installments is easier than paying directly in cash. Because the price of a car that ranges from tens to hundreds of millions is not a small amount for an expense at one time.
3. The Speed Factor Is One Of The Reasons
One of the biggest reasons why some people buy a car on credit. With credit, of course, what you have to think about is the amount of DP and monthly installments that are in arrears to be paid. For some people, the desire to immediately own a car can turn into a need. Through leasing or credit, it is enough to pay a down payment and complete the requirements, a car can be driven immediately.
4. No need to pay the total price
Spending money once in the amount of hundreds of millions will obviously reduce the economic capacity at one time. With credit, only a down payment is paid while the rest can still be used to fund other needs. This is certainly much lighter than having to spend the entire savings to buy a car when there are other needs that are not fulfilled.
Disadvantages of Buying a Car on Credit
There are advantages of course there are disadvantages. Although the various advantages above can be considered to encourage buying a car on credit, the following disadvantages of buying on credit also need to be considered. Here are some of the losses that will be borne when buying a car on credit:
1. Become an Additional Financial Burden
Buying anything on credit, including a car, certainly presents its own burden. Because even though the dream car is owned, it is not fully private property. There is still a process before the car is paid off and actually becomes private property, of course through monthly payments that must be repaid within a certain time.
2. Increase Debt, Indirectly
From an economic point of view, healthy finances are debt-free. Installing a car is actually the same as adding to the debt burden that arises from each installment of the car payment.
3. If the Interest is High and Socio-Political Conditions are Unstable, the Burden will be Bigger
This factor is a factor that could arise. Where credit conditions are closely related to the stability of domestic banks. At the same time, if there are things that shake the socio-political conditions in the country, of course, car loans that are currently running are also affected. At least the most likely impact is if there is an increase in credit interest rates.
Each of the advantages and disadvantages as described above can be your consideration before deciding to buy a vehicle on credit. If your financial ability supports buying a car with cash, you can get the following benefits.