Payment plans can make life a whole lot easier if you don't have a reserve of cash, but personal finance blog Get Rich Slowly points out that once you have accumulated some savings, you'll likely get a better deal by paying upfront.
Photo by Joe Marinaro.
There are a number of reasons why paying in full ends up saving you money, but the most obvious is the fact that there isn't any interest. If you're enrolled in a plan that charges you interest, you're going to end up paying more the longer you stretch out the plan. However, this isn't the only reason payment plans can end up costing more. For example, if you're in a position to negotiate, it's much easier to do so with cash upfront since cash is much easier for small businesses to deal with. Furthermore, some payment plans just plain cost more than paying upfront.
It's important to note that this isn't an end-all, be-all solution. You need to pay attention to what you're buying (cars, for example, are actually cheaper if you finance through the dealer), and you need to make sure you can afford to pay upfront. If you don't have the savings to be able to do so safely, then it's probably a better idea to pay over time. With good saving habits, though, you should eventually be able to get yourself into a position where you can pay upfront more often. Hit the post at Get Rich Slowly for more, and share your experiences paying upfront in the comments.
Grow Your Savings by Paying in Full [Get Rich Slowly]