Comments on: Money Mistake Monday – Owe More Than It’s Worth Syndrome. http://www.mytwodollars.com/2008/03/10/owing-more-on-your-car-than-its-worth/ A place to discuss money...for the rest of us. Fri, 10 Feb 2012 05:21:23 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: St. Paddy’s Day Rounduphttp://www.mytwodollars.com/2008/03/10/owing-more-on-your-car-than-its-worth/#comment-25407 St. Paddy’s Day Roundup Mon, 17 Mar 2008 01:37:53 +0000 http://www.mytwodollars.com/2008/03/10/owing-more-on-your-car-than-its-worth/#comment-25407 [...] Money Mistake Monday topic was owing more than your car is worth. I’m glad to say that our car is theoretically worth more than we [...] [...] Money Mistake Monday topic was owing more than your car is worth. I’m glad to say that our car is theoretically worth more than we [...]

]]> By: LJhttp://www.mytwodollars.com/2008/03/10/owing-more-on-your-car-than-its-worth/#comment-25299 LJ Mon, 10 Mar 2008 21:15:48 +0000 http://www.mytwodollars.com/2008/03/10/owing-more-on-your-car-than-its-worth/#comment-25299 We buy new and drive forever-that is how we are able to afford new cars- we pay them off, save for down payments(or for as much of the purchase as we can) and use every discount available to us. We rarely end up with a car payment and we never end up upside down. The last time I made a trade-2 years ago. We endedup driving home a 47K Tahoe for a grand total of 13k. Between discounts, bargaining and a trade in we paid 13k out of pocket for a brand new ultra awesome car. Not too shabby. What you say is true- people finance more than a car is worth because of owing too much on a trade in. Another way to avoid that is to skip on the extras salesman offer you-extended warranty,service packages, pain protection, etc. You end up financing and paying interest on things you don't really need, putting you further into the debt hole. Save up and pay as much down as you can. Take Care LJ We buy new and drive forever-that is how we are able to afford new cars- we pay them off, save for down payments(or for as much of the purchase as we can) and use every discount available to us. We rarely end up with a car payment and we never end up upside down. The last time I made a trade-2 years ago. We endedup driving home a 47K Tahoe for a grand total of 13k. Between discounts, bargaining and a trade in we paid 13k out of pocket for a brand new ultra awesome car. Not too shabby.

What you say is true- people finance more than a car is worth because of owing too much on a trade in.

Another way to avoid that is to skip on the extras salesman offer you-extended warranty,service packages, pain protection, etc. You end up financing and paying interest on things you don’t really need, putting you further into the debt hole.

Save up and pay as much down as you can.

Take Care

LJ

]]> By: Timhttp://www.mytwodollars.com/2008/03/10/owing-more-on-your-car-than-its-worth/#comment-25298 Tim Mon, 10 Mar 2008 20:18:19 +0000 http://www.mytwodollars.com/2008/03/10/owing-more-on-your-car-than-its-worth/#comment-25298 Jeremy's suggestion only works if the loan company puts your extra payment towards principle rather than interest. Read your contract before doing this. Jeremy’s suggestion only works if the loan company puts your extra payment towards principle rather than interest. Read your contract before doing this.

]]> By: Davidhttp://www.mytwodollars.com/2008/03/10/owing-more-on-your-car-than-its-worth/#comment-25296 David Mon, 10 Mar 2008 17:07:25 +0000 http://www.mytwodollars.com/2008/03/10/owing-more-on-your-car-than-its-worth/#comment-25296 Very true, I should have mentioned that. Thanks Jeremy! Very true, I should have mentioned that. Thanks Jeremy!

]]> By: Jeremyhttp://www.mytwodollars.com/2008/03/10/owing-more-on-your-car-than-its-worth/#comment-25295 Jeremy Mon, 10 Mar 2008 16:32:01 +0000 http://www.mytwodollars.com/2008/03/10/owing-more-on-your-car-than-its-worth/#comment-25295 Another thing people don't realize is that when you finance a car, new, used, or whatever, you're usually financing much more than just the cost of the car. You could have a couple thousand extra just from taxes, title, etc. So, if you put little or nothing down, you're already upside down the moment you drive away, and it could take a year or two just to put a dent in what you paid for taxes or other fees. And unless you keep your car until the loan is paid off (which isn't very common for most people) you're going to end up costing yourself even more money come time to sell or trade in. The best thing you can do in a little or no money down situation is to pay a little extra each month. You'd be surprised how much just $50/month more will help. Depending on the loan terms, it could shave off 6 months to a year off the loan, hundreds or even a few thousand dollars in interest, and help make sure that when it comes time to get rid of it, you're not stuck financing the amount you still owe. Another thing people don’t realize is that when you finance a car, new, used, or whatever, you’re usually financing much more than just the cost of the car. You could have a couple thousand extra just from taxes, title, etc.

So, if you put little or nothing down, you’re already upside down the moment you drive away, and it could take a year or two just to put a dent in what you paid for taxes or other fees. And unless you keep your car until the loan is paid off (which isn’t very common for most people) you’re going to end up costing yourself even more money come time to sell or trade in.

The best thing you can do in a little or no money down situation is to pay a little extra each month. You’d be surprised how much just $50/month more will help. Depending on the loan terms, it could shave off 6 months to a year off the loan, hundreds or even a few thousand dollars in interest, and help make sure that when it comes time to get rid of it, you’re not stuck financing the amount you still owe.

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