3 lies about car payments
Car payments are so prevalent in society today that people think they’re a normal part of life. But if you took the average car payment of $545 and invested it into a Roth IRA instead, 30 years later you’d be sitting on a cool $1.4 million. Look, I like my car, too — but not that much!
For me, that’s motivation enough to save up and pay cash for a car instead of financing one. But I get plenty of objections to this way of thinking. Here are some of the excuses I hear. And the truth about them:
1. “But the 0% interest rate is a great deal!”
No, it’s not. That new car starts losing value the instant you drive it off the lot.
From the first month of ownership, you’d owe more on your car than it’s worth. Four years later, you’d still have a year or two of payments left, but your car would’ve lost most of its value.
And let’s not forget that 0% is not the same as cash, and not everyone who falls for the 0% marketing pitch actually qualifies for the deal. But by then, you’re already in love with the car of your dreams and are willing to sign anything to drive it home. And of course, some of those “deals” aren’t quite as attractive once you read the fine print.
Making money off car loans is their business. You’re not outsmarting anyone!
The full article is available in our e-Edition. Click here to subscribe.