Seb pays the $5,000 cost for his car all at once. Carolina also buys a $5,000 car, but she uses a secured line of credit paid over a period of 3 years. What is the advantage of Carolina’s strategy?

Carolina spreads the $5,000 cost over 3 years instead of paying it all at once, so she can make smaller payments over time. Because she uses a secured line of credit, she may pay interest and must provide collateral; financing does not lower the car’s price.

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