If I had the cash to pay for a car I would still finance. By financing, you are adding a trade line to your credit report, which in the long run will help your score. If you have the cash just finance and pay it off over 12 months. The interest accrued over a year isn't going to be all that much.
if you had the resources available that wouldnt deplete your savings, would you buy a car (say 25k)? why or why not? buying with cash leaves you without monthly payments and does save you money in the long run but also cuts out that money instantly from your savings on an investment that will loose money. financing the vehicle allows you to retain more of your savings via a simple down payment but opens you up for extra fees and interest costing more then the sticker price over the loan term.
help navigate this?
Here's my opinion on how I would navigate:
1. What rate would I be approved for? If 0% = yes | If anything else, it would depend. For example 2%:
2. Could I earn more than 2% interest in an investment? Yes = finance car | No = Buy in cash
3. If I finance, am I willing to invest the cash? Yes = finance car | No = Buy in cash
Generally speaking, I would buy the car cash but mainly because I probably wouldn't invest the relatively small sum. You could finance to build credit, but generally what's the point of credit if you have cash to buy things. Consider if you have any credit needs in the future such as a mortgage.