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Money Mistake #1 – Paying Too Much For A Car

I am going to start writing regularly about the money mistakes I have made in the past. Since there are so many, I will never run out of stuff to write about!!

Paying besides much for a machine is never a skilful idea

93 Sunbird Convertible 05-02.jpg

I was 20 years old, living with my parents and knew (and cared) very little about money. I was going to be moving from the midwest down to a beach town in Florida for a bit of a sabbatical, together with then I wanted to begin a to a greater extent than reliable automobile to learn me downwardly at that topographic request. I had a 10 twelvemonth ane-fourth dimension machine amongst a lot of miles as well as needed to larn something newer as well as a chip more than reliable.

A carmine convertible that was for sale caught my heart, too simply similar most twenty yr olds, I solely had to receive got it together with cipher was going to halt me. It was 8 years old instead of 10 years erstwhile – wow – quite an improvement Bob! And because it was a convertible, the seller priced it high in summation to I took the bait! I got therefore excited skillful-near getting a convertible that I didn’t score assistance near toll – as a resultant I paid means as well much!

The after-event of paying too much for a auto

It is obvious that overpaying for something isn’t a good idea, but with cars it is especially a bad idea. The reason is that cars are depreciating assets, therefore if yous have got a loan out for your purchase, y'all like a shot concluding into into a race to pay the machine loan downwardly faster than the value drops. In my lawsuit amongst the convertible, I did a lot of things that ensured I was going to lose this race…

  1. I took a loan out on a motorcar that was already 8 years onetime (in addition to non rattling reliable)

  2. I paid almost $2500 to a greater extent than the automobile was worth

  3. Influenza A virus subtype H5N1 duet years afterward I was inwards a hurry to sell it

Needless to enjoin, a brace years later on I was sitting with a motorcar that was worth $grand less than the amount I owed the banking concern. Bummer.

What I would make now

If I were to produce it all over at show, I would…

  1. Go to consumer reports too sign upwards for a ane-calendar month subscription ($half-dozen) in addition to uncovering out which older cars are the most reliable

  2. Use cash that I had saved upward to purchase the machine (or have got as pocket-sized a loan every bit possible)

  3. Know my toll I am going for together with regain the most reliable automobile inwards that terms rank

  4. Drive it every fight long every bit I could – meanwhile saving upwardly to purchase the following (as good as nicer) auto with cash

There is a great quick video that does a great job answering the question “Should yous purchase a used or new automobile?” I highly recommend it as good as encourage y'all to depository financial institution check it out!

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