Quote:
Originally Posted by rcracin
Make higher payments every month to lessen the blow at the end. Then go buy a honda civic.
I'm broke so I bought a $1500 civic. I didn't take on a monthly payment. When I bounce back, I'll go get a nicer car.
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This.
Car payments are one of the worst financial decisions, since cars are depreciating assets (except for classics but that is rarely the case). The exception would be if you can write off the car for business or if you only take on a small loan and use the other money you have set aside to invest.
The smart way to buy a car:
1. Don't buy new
2. Buy with cash
3. Don't spend your whole savings so you have money left over for maintenance and repairs
4. Maintain it well so your invested money goes further
Cars break and need maintenance, so they will only cost more money over time in addition to what you have initially invested into them. Paying interest on a car loan only adds to the total cost of ownership.
You aren't totally in the hole because it will still be worth something when you get rid of it. I know a few people around my age who have bought cars with high interest loans they couldn't afford, the car had a major mechanical problem, and they had to trade it in starting out underwater on their next loan.