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 also much for a automobile is never a proficient stance

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, therefore I wanted to origin out a to a greater extent reliable automobile to instruct me downward in that location. I had a 10 yr quondam automobile alongside a lot of miles together with needed to starting fourth dimension something newer inwards improver to a fleck to a greater extent reliable.

Influenza A virus subtype A ruby convertible that was for sale caught my midpoint, as well as but similar most 20 yr olds, I just had to receive got it together with zippo was going to halt me. It was eight years onetime instead of 10 years onetime – wow – quite an improvement Bob! And because it was a convertible, the seller priced it high inwards add-on to I took the bait! I got hence excited unopen getting a convertible that I didn’t 50-50 help nigh cost – every fleck a lastly outcome I paid agency every bit good much!

The after-upshot of paying also much for a machine

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, together with and then if y'all accept a loan out for your purchase, yous like a shot instruct inwards into a race to pay the motorcar loan downwards faster than the value drops. In my instance amongst the convertible, I did a lot of things that ensured I was going to lose this race…

I took a loan out on a machine that was already eight years erstwhile (in plus to non rattling reliable)

I paid almost $2500 to a greater extent than the machine was worth

A duad years after I was in a hurry to sell it

Needless to order, a twosome years afterwards on I was sitting amongst a auto that was worth $chiliad less than the amount I owed the depository financial establishment. Bummer.

What I would produce at demonstrate

If I were to make it all over at demonstrate, I would…

Go to consumer reports in plus to sign upwardly for a i-calendar month subscription ($one-half-dozen) in addition to abide by out which older cars are the most reliable

Use cash that I had saved upwardly to purchase the motorcar (or lead maintain equally bag-size a loan as possible)

Know my terms I am going for as well as discover the most reliable machine inward that impairment accomplish

Drive it as long as I could – meanwhile saving upward to purchase the following (also nicer) motorcar amongst cash

There is a great quick video that does a great job answering the question “Should yous purchase a used or novel automobile?” I highly recommend it and encourage you to bank gibe it out!