It's about respecting the value of your money. When you pay cash, you see you labor and investment and effort leaving you in exchange for a material good. You will understand that the thing (be it a car or whatever), is literally a manifestation of your energy. This will force you to think more carefully about your decision, force you to slow down, and truly think what is best and most valuable to you, and by extension, on average, you will make smarter and better decisions with your money.

Conversely, buying things on credit allows you to psychologically ignore losing your money while still gaining access to the stuff. There is therefore way less pain involved, and you are much more likely to act hastily, and buy more than you otherwise would have.

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Building wealth really isn't about squeezing that extra % on your dollar (this changes once you have a net worth in excess of 10MM, but that's not you or 99% of people so that's irrelevant). Building wealth is a mindset about delaying gratification, being an informed consumed, and diligently investing in quality investments. Taking out a loan on an overpriced, rapidly depreciating asset falls into none of those categories.