I’m sad to say the minute you drive the car off the car lot, it depreciates in value.
This is one of the main reasons why we never buy a new car.
The best practice is to buy a used car with cash. Even though you might have to pay to maintain the used car, you won’t have monthly payments that last at least five years with interest rate around 7-9%.
Let’s say that the new car that you want costs $50,000.00, and you put down a 10% Loan term of 72 months (6 Years) Interest rate of 9%
you will end up paying $58,402.74 for a $45,000.00 loan at the end of the terms. Total interest paid: $13,402.72, not to mention a monthly payment of $811.15 that you can keep in your bank each month by buying a used car outright.
You also have to have full coverage auto insurance.
You will also have to have a gap insurance. (Guaranteed Asset Protection) add-on coverage that can help specific drivers cover the “gap” between the financed amount owed on their car and their car’s actual cash value (ACV), in the event of a covered incident where their vehicle is declared a total loss.
