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Josh Lawson
A. I hear this one often when I tell people that car payment are a big drag on their finances. The normal argument is that you are paying the same amount in keeping your junker going than you would be in car payments for a new car. Cars depreciate FAST. So going into debt for a depreciating asset is not a smart choice on any spreadsheet. If you want to get out of the monthly payment, very rarely will you be able to sell it for more than you owe.
Although spending money on a junker and pouring money into it does not sound appealing to anyone, over time the numbers work much better. Remember, a junker is NEVER a long-term strategy. Sure it is stressful and inconvenient, but so is carrying around a $200 to $500 monthly car payment. If you buy a $1,500 junker and save your $300 car payment. Within 10 months you could buy yourself two more junkers or a little bit nicer car. And within 10 months, that $1,500 junker will still be worth $1,500. |
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