![]() ![]() Where’s your margin? Oh yeah, it’s going to the bank for five more years. Or-dang it-you just need more room in your monthly budget for life. ![]() See, on the surface, $350 or even $500 a month seems innocent. Plus, think about this-during your loan term, you’d still be paying the same monthly payment for a car that’s decreasing in value each month you pay. And until you pay it off, you’re in an upside-down car situation. That means if you bought a car for $32,000, when you’re done paying it off (almost six years later), you’d have paid about $36,000 for a car that’s now worth maybe $13,000. The truth is, dealers make more money when you finance, so they’re winning if they convince you to borrow more-whether that’s by extending your loan term, encouraging you to put down a smaller down payment, or selling you a pricier car if you have a larger down payment.īut what the car dealer won’t tell you is that your shiny new car will lose 60% of its value-what we call car depreciation-within the first five years! 5 Remember, the car dealership’s number one job is to convince you to finance a car (and most likely one that stretches your budget to its limit!). So, while yes, those numbers prove that financing a car is “a way of life” in America, let’s stop and think about that for a minute.ĭo you really want another monthly payment added to your plate, or do you just feel like financing is the only way to “buy” a car? Step 2: Hit Calculate to see what your monthly car payment would be.Īuto loan debt in America is now sitting at a whopping $1.37 trillion, with 81% of all vehicles being financed.
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