![]() That’s why you want to make sure your credit score is in top shape when you finally apply for the loan. The interest rate on your car loan depends on your credit score. If you put down $0, your interest rate will be much higher. If you don’t have much money for the down payment, look to getting a used car. Gas mileage is an important factor in determining the long-term value of a car. Consider a fuel-efficient, or even hybrid, car. Gas prices seem to always be in a state of flux. Even if they’re only slightly different (say, $50/month), that can add up over the years. The insurance rates for a new and used car can be pretty different. One of my friends bought a $20,000 luxury car, drove it for about seven years, and then sold it for 50% of the price. For me, I knew I’d be driving the car for a long time, so I wanted to pick one I really enjoyed driving. Long time readers know I’m a big fan of conscious spending (more on this later). Because this was a high priority, I was willing to pay more for it. I have enough stuff going on in my life, and I want to avoid repair issues that cost time and money as much as possible. When I bought my car, above all, I wanted one that wouldn’t break down. ![]() And there are a few solid indicators to what makes a good car: It’s only when you finish paying off the car that the real savings start.Īlso, by taking good care of your car over the long term, you save even MORE money on it - and you’ll have a great car. That’s why it’s important that you pick a reliable car, maintain it, and drive it for as long as humanly possible. If you sell it after just a few years of owning it, you’ve lost money. More specifically, how long do you plan to keep the car before you sell it? It doesn’t matter how good of a deal you get on a new car. What they fail to take into consideration is TIME. How many times have you seen someone sink a bunch of money into a flashy luxury car with a bunch of unnecessary additions … only for them to end up trying to sell it within a few years? People make a huge effort to save on things like clothes and eating out - but when it comes to BIG purchases like buying a house or a car, they make awful decisions and erase any savings they’ve made. That means you need to put at most a down payment of $6,000 (20% of the cost) and spend no more than $417 a month (10% of your income) on expenses for it. Imagine you want to purchase a new car for $30,000 and you earn roughly $50,000 a year.
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