Best Car Loan: You Can’t Go Wrong With This Auto Loan
The best car loan is the one you never take out. Before you go out and blindly get a car loan, take the following into consideration. It can not only save you hundreds of dollars a month in car payments the short run, it can literally change your financial life in the long run.
Assess Wants vs. Needs: Why do you need a (another) car? Do you really need one, or is it a want. Can you invest $500 or $1,000 in your current vehicle and get another year out of it?
Most of us get it in our heads that we NEED another car, when it is really a want. Now, if you’re a salesman and drive 100 miles a day and your car has expensive mechanical problems, then yeah, you probably need another car.
But if you drive 10 miles round trip to work and the air in your car doesn’t work, which drives you crazy – and everything else is ok – then you don’t need another car. You want one.
Remember, a car is only to get you from point A to point B. It doesn’t have to be fancy. Most of us want a new car or a fancy car, when a used one will do the job just fine.
Make Long-term Decisions: When most of us go out to buy a car, we often have a type of vehicle in mind. And this is why most of us get a car loan without even thinking about it.
BUT, what if you adjusted what you wanted down. Instead of the two-year old, almost new car for %17,500, what about a 5 or 7 year old vehicle for $3,500 – that you save up for an pay cash.
Instead of being stuck with a $350/month car payment – plus full cover insurance – for the next four years, how does NO CAR PAYMENT sound? How about $75/month for basic car insurance, instead of $150 for full coverage?
Why Get a Car Loan When It’s One of the Worst Investments You Can Make
A car loses 20-30% of its value as soon as you drive it off the lot – even a new car. Would you invest in a mutual fund or stock if you knew that as soon as you bought it its value would decrease by 20-30%? And, would you keep plowing hundreds of dollars a month into this “investment”? Of course not.
BUT, this is exactly what you do when you get a car loan.
As we discuss in our About Page, you can invest what would be car loan payment money and retire a millionaire – even if you never make a lot of money.
Again, the best car loan is the one you never take out.
In another article in this section, we’ll discuss what to do if you must get a car loan.
P.S.: Buy Cars Cheap at Government Auctions.
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