Car Loans for Suckers

So now you can get an 84-month loan to buy a new car. Which, frankly, is dumb. If you need to take out at 84-month loan to buy a new car, you need to buy a cheaper car. (Same goes for leasing a car, unless you are writing off the lease as a business operating expense.)

Yes, that’s very old school of me – buy things when you have the money to buy them, not before. But it’s really good habit to get into (looking at you youngsters here) if you want burning-money-2113914_1280to have sound finances as you move through life (and yes, you really want sound finances as you move through life, trust grandpa on this one).

I feel slightly dirty getting a car loan of any kind, but, it’s a small failure I allow myself. but seven years? Sorry, it’s time to go get a used car (or if you live in a place where that works, take public transit).

Debt is not always bad. Taking a loan to buy a house is often a really good choice (but more people should run the buying vs. renting numbers before they do that – there’s a sense in American culture that owning your home is just inherently better than renting, and this is dumb). Taking a loan to buy a car is sometimes necessary when the car is your ticket to work and income. Taking a loan for education is a reasonable thing to do (and I’ve done it) although the US student loan system is pretty much a racket at this point, and the cost of university tuition has inflated beyond any reasonable rate.

One of the drivers of these loans is the predilection for trucks and SUVs, which I’m sorry, is also a dumb feature of current American culture. If you want one, and can afford it, go for it – it’s your money and happiness. But if you’re spending a lot of extra money for an oversized vehicle to drive yourself to work in, and thereby increasing your gas bill, and taking a loan for it that leaves you upside down for an extended period, you’re just making really bad choices.

(That’s my bit of judgmental squawking for the day.)

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