| | | | | than the car is worth). |
| I was helping a friend of mine clear up some | | | | This may be the beginning of a rant, but I'm |
| issues on her credit report and one of her | | | | gonna run with it – a car is a depreciating |
| payments took me by surprise. This friend of | | | | liability, NOT an asset. And believe me, I know |
| mine had a $760 car payment on a 72 month | | | | what it's like to drive some beat up P.O.S. My |
| note. This payment suggested she could | | | | first car was nicknamed "The Turd" if that gives |
| be buying the equivalent of a new Mercedez | | | | you any indication. It was not pretty, but it also |
| or a BMW X5. As it turned out, she had bought | | | | came with a car payment of ZERO! Me and |
| a Ford Escape from an unscrupulous car | | | | "The Turd" had a lot of great memories until I |
| dealership. Using the car loan calculator on | | | | snowplowed a deer going 70 miles an hour. |
| Bankrate.com, I calculated that her interest rate | | | | Here's the message – I know you want a |
| was above 17% on the car loan. (Most credit | | | | new car. I do too. I also know that you don't |
| unions are lending money on cars at 6.25% right | | | | want a $700 car payment for the next 7 years |
| now!) Needless to say, I suggested she RUN to | | | | when you can buy a slightly used car and have a |
| the nearest credit union and get that loan | | | | $200 payment for 3 years. Makes sense, |
| refinanced. | | | | doesn't it? Do yourself a favor and save up for |
| So here is the ultimate question for you – | | | | the new car smell. I've paid cash for the past 3 |
| WHY ON EARTH WOULD YOU BUY A BRAND | | | | cars I've owned and it smells that much |
| NEW CAR?? The minute you drive your car off | | | | sweeter. Bottom line is the more cash you have |
| the lot, it automatically depreciates thousands of | | | | in the bank, the better off you are. Don't waste |
| dollars. So from the day you purchase it, you | | | | it on a new car – let your friends do that. |
| are already upside down (meaning you owe more | | | | |