Many people are unaware that they have an option when purchasing a vehicle for transportation. They believe that because they often purchase new shoes and underwear, a car should be purchased in the same manner. If you don’t have enough money saved to buy something right now, there are always lots of loan and credit hawkers willing to give you the money. Is this usually the best course of action? Have a look at used cars in Merced CA to get more info on this .
What if you owned a 2003 Toyota Camry, sold it for $6,000 this year, and used the money to put down on a new $24,000 car? You’d have to come up with $18,000 in cash. The current national average for a car loan is 5.75 percent, according to Yahoo, and official records show that the average car loan is for more than four years. Assume you have a six-year loan on the car. Your monthly payment would be approximately $320. You would have paid $23,000 out of pocket for the car six years later, and you would only have $6,000 to show for it if you took excellent care of it and were able to resale it for that price. That means no accidents, no eating or drinking in the car, getting the oil changed and other maintenance done on time, and maintaining a low-to-average mileage. To put it another way, if you want to receive a decent resale value on your automobile six years later, you’ll need a little luck and be very serious about taking care of it.
Assume you maintain your 2003 Toyota Camry or that you were the customer who paid $6,000 for it this year. You don’t have any car payments, so if you lose your job or experience any temporary financial difficulties, you won’t be concerned about the automobile being repossessed. Given that it is a used car, we may require a little extra for repairs, say $100 each month. You still need to get the oil changed and perform routine maintenance on the car as if it were a new car, but you don’t have to worry about a few coffee spills on the upholstery or dents and dings on the paint since you know the car will be worthless when you’re ready to sell it. Where will you be in six years if you put the extra $220 a month into a one percent investment CD? You’ll have $16,000 in the bank. That is undoubtedly sufficient funds to purchase a newer and fancier vehicle.