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Car Payment are normal. Right??

June 24th, 2010 at 06:46 pm

Do car payments have to be a way of life? I don't think so. But for many people having a car payment seems normal to them, just something that everybody has right? Wrong. The average car payment in America today is $464 over 72 months. And the average price of a new car is $26,000. And after only 4 years your car has lost almost 70% of its value.

So lets do an example, You buy a $26,000 car at 10% interest over 72 months. And after 4 years your cars value has dropped about 70% and its worth about $7800 but you are still going to owe over $10,000. If you keep the car until its completely paid off your going to have paid almost $35,000 for a car that is now worth less than $8000.

A car payment is the largest item people buy that goes down in value. And its the second largest payment people have besides their house.

Let's say you took the average car payment of $464 and saved it in a savings account for 10 months. You would have $4640, don't you think you could buy a decent car to get you around for that much? Yeah I thought so.

Stay out of the vicious circle of car payments and do not worry about what other people think about your car.

2 Responses to “Car Payment are normal. Right??”

  1. NJDebbie Says:

    I agree with you! We took out a loan to purchase my husband's truck. It's $396 a month for 72 months. The only thing that saves us is the interest rate (@ 0%). We still have another 4 years to pay on it and I hate it. Next time will be paying cash for a used car.

  2. Jerry Says:

    I agree that car payments are a huge pain, and not necessary! With the costs of fuel and insurance and maintenance, there is no need to also pay for a brand new car. Our last used car was my favorite, and every bit as reliable as our new car, which will lead us to buy reliable-used from now on. Makes more sense overall.
    Jerry

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