Americans spend too much on their cars. This is because most Americans who buy cars use financing to make the purchase possible.
This means that they borrow the money to make the purchase, then must pay it back – usually with interest. But a car is a consumable in that it loses value. Unless you are buying a classic sportscar, you’ll end up with something worth less and less over time.
A car is conveyance, meant to get you from place to place. And pretty much all cars depreciate. It’s not smart to pay interest on something that is worth less and less, you end up wasting money. Follow these rules instead to make a wise purchase the next time you need a car:
Keep away from financing. Cars are expensive, and most of us want the nicest car we can get. Loan officers at car dealership are more than willing to help us buy more car than we can truly afford.
It’s complicated and based in emotions. We have feelings about our cars. We love them, want nice ones, are proud of them. Loan companies manipulate us because of these feelings; they know we will accept unreasonable terms and rates to get what we want. You’d pay a lot less for the car if you bought it with cash instead.
Don’t lease the car. Leasing is a fancy term for renting. When you lease a car, you are making payments long-term but at the end of the term you don’t have a car to show for your money. Plus, the dealership will factor in the cost of wear and tear -and depreciation – into the leasing agreement.
This is seen by many people as unfair. You end up paying for damage, before you do anything to the car, because other people in the past have damaged cars. Worse, you pay a great deal of money for years, and at the end of the period you don’t have a car to show for your thousands spent.
Don’t buy new. A brand new car sells for absolute top dollar. It will depreciate a great deal the minute you drive away in it, because now that you own it, it cannot be considered ‘new’ any more. When you buy new, you’ll lose a great deal of money if you ever want to resell the vehicle.
Access additional writing pieces penned by this same writer dealing with subject matters such as jean shorts for men and denim shorts.
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