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Should you buy a used car with a stimulus check or keep it in a bank? The US Treasury announced the roll-out of the second $600 stimulus check recently and it is the much-needed financial boost that will benefit many in South Carolina. However, receiving money is one thing, and spending it wisely is another and while we love the first, most of us fail at the second. The motive should be to put this $600 to the best possible use for you and your family, utilizing the amount in such a way that the benefits stretch well beyond the current crisis. And while many say that you should simply put it in your savings account, we disagree on valid grounds.
In this post, we give you a rundown as to why it is much better to use the $600 to buy a used car than to save it in a bank or even buy stable government bonds. A quality used car is the best investment you will ever make with the second stimulus package.
You will earn an average of 0.05% per year with banks
Let us put that into perspective. Say you put the $600 you receive in a savings account with the best paying bank in the country. Right now, the average interest rate on a savings account is 0.05% per annum. At that rate, you will earn only 30 cents at the end of one year. Or, your $600 will take 1 whole year to inflate to only $600.3. Is that exciting? Not really. The return is not enticing enough to not use the $600 for a whole year.
Other investment options
Okay! You can argue that we all know that savings accounts do not pay much. What about US government bonds? The picture is not that pretty here as well. 10-year US Government Bonds currently offer an annual return of 0.87%. That comes to $5.22 per year. Comparatively better than banks but your $600 is now stuck for 10 years. Again, the return is not high enough to have that kind of patience.
Return on buying a used car
As obvious, the calculations will not be that straightforward like the above two options but you can come to your conclusions as you get the overall picture. Now suppose you buy a quality used car using the $600 stimulus check as the down payment. At Family Auto of Taylors, we have a flexible down payment system combined with a trade-in policy that enables you to customize the financing to bring the down amount to that level. So, you have a car that will run you for over 7-8 years and you can use the vehicle to keep your current job, or seek out a better job, or cut down on travel time and earn from overtime.
Recent reports show that the salary figures of an average US citizen are slated to rise at a rate of 3-5% per year, even after the economic hit of COVID-19. If your car helps you to keep your job, just the return is way higher than banks, keep aside other factors like income stability, financial security, and more. In fact, investing in stable financial instruments in the US do not assure lucrative short-term returns. It is better to spend your money on commodities that bring you returns in other forms.
Use the second stimulus check wisely
And visit Family Auto buy here pay here dealership to get a new used car. We offer flat 2-years/36,000 miles warranty on all our used cars. Plus, you get easy financing with no credit score check and other exciting deals. At Family Auto, $600 is enough to get you a used car. Drive to your job, stay safe from the virus, and achieve guaranteed success.