In this family, we don't DO Car Payments!
We did once upon a time.
The year we bought our LAST car and FINANCED it was 1994.
We have been Car Payment FREE for 15 yrs.
And you can be too!
Sluggy's 2 Rules for Buying Cars
1. Don't buy new. A new car can lose up to 20% of it's value in the 1st yr.
Yes I said 20%!
2. Don't finance it. Save up and pay cash. This will keep you from getting into car debt and keep you from buying more car than you need. Once you get into "Car Debt Hell" it is very hard to extract yourself. Just say NO!
Think about it this way....if you finance a $20 thousand Dollar car over 5 yrs(at the current avg. rate of 8% interest), you will be paying over $24 Thousand Dollars for that car. Your $20K good deal may not be such a bargain once you figure in what you actually paid the bank and that your $20K car after 5 yrs. is now only worth $6K.
4 of those 5 cars we bought since our last "car-payment" car in 1994 were used. The car we bought new I don't know WHAT I was thinking at the time....it was not my best moment but at least we got a deal on it and we paid CA$H.
Buying a car(new or used)on Credit is very BAD for your financial health. Every car should have that warning label on it's side, just like packs of cigarettes do.
And I am NOT joking about that!
This is something I feel strongly about and it's the biggest single reason(outside of not having health insurance & abusing credit cards)that keeps people from getting & staying out of debt.
Save up to buy a car. Once you buy it, keep putting aside the amount you put aside to buy that first car.
That way you can save up for the next car and not have to finance it. You are already in the habit of putting money aside for a car while you were saving to buy the first one, so just keep putting the money aside. And don't find other ways to spend it....no trips to Disney World, no Big Screen TV, no extravagant dinners out, no new wardrobe, etc.
If you do this, when your current car finally belches it's last puff of smoke, you'll have money to buy a new-to-you car for CA$H!
I came across this video from Dave Ramsey that may help you see the whole cars & debt thing differently.
Hopefully it will make you come around to seeing that you too can be Car Debt-Free!
Sluggy
excellent advice! we bought one new car on a payment plan eons ago - ugh. now it's only new (but used) cars for cash. love not having any payments!
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