Buying a car

Member asks:


In a message dated 4/8/2005 6:28:25 P.M. Eastern Standard Time, X writes:

Please give me advice on buying a car. The car I have now has over 100,000 miles on it.


Money Prof:

I'd like to see you with a short time on loan, so when you buy the next car it will be worth some money. What most people do is buy a car that is too expensive for their income, so then they get a 4-5 yr loan on a USED car. By the time the loan is paid the car is worthless. Or might even owe on loan and car has no value. In your case I'd suggest a 1 1/2 yr old 2004 car, the heavy depreciation is off, but you still have time on the warranty. ( but NOT an expensive car at this time)

So try to have this work out that if you buy a 1-2 yr old car, the loan is 2 yrs. A new car no more than 3 yr. You might ask "what do I do if I can't afford payments that high"? Then take the bus while you're saving for a bigger down payment.

I have a friend that owns a car dealership so email me if you need help on this.