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The Truth About Car Payments
I’ll always have a car payment. You’ve probably heard that comment before, right? You might have even said it yourself—with a defeated, woe-is-me tone of voice. So what’s the deal? Are car payments really just a way of life? Well, that’s the normal way of thinking. But, as Dave always says: When it comes to money, normal is broke. You want to be weird, and weird people don’t have car payments. So how, exactly, do you live without a car payment? Here’s the deal. Recent statistics show that one-third of car buyers sign up for a six-year loan at an average interest rate of 9.6%. Among these buyers, the average price of the car is just over $26,000. This means that one-third of the cars you see on the road are dragging a $475 payment behind them. The car dealer won’t tell you that your awesome new car loses about 25% of its value the instant you drive it off the lot . After four years, your car has lost about 70% of its value! What does that mean? After six years,...
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