cashback wrote:Pay cash. Is paying the interest worth possibly helping your credit? In my opinion, no.
I disagree completely. The average car loan right now is hovering in the 2-2.5% category. About 6-8x better than the average credit card rate. You're talking $200 on a $10k loan. How many people on this site would pay an AF on a card with a $10k limit if it was interest free. This is the equivalent. If he pays off half the loan as I suggested, he'd be looking at about $100 in simple interest after a $10k loan. That's an outstandingly low cost to borrow money.
Paying cash would rob him of the ability to:
1. Help his credit mix
2. Keep money in the bank drawing interest
3. Show positive on-time payments on his credit
4. Show new established credit.
I can hardly think of a cheaper instrument to help build a person's credit than a car loan at today's low rates.