Car Finance

Most brand new cars cost well over $12,000. This means that the cost of a brand new automobile makes up a large percentage of the annual income made by most Americans each year. Most people cannot afford to pay $14,000 up front for a brand new car, so many choose to get car loans. When you take into consideration the interest that must be paid, it can take as long as 7 years for the average worker to pay off this loan. At the same time, the car will depreciate in value, and will be worth very little once it is paid off compared to its original value.

Job Security
Many people, especially those that are young adults, may work multiple jobs within a single year. This shows a lack of stability, and it is easy to get into a financial strain if the economy suddenly experiences a downturn and jobs become harder to find. It is for this reason that you should avoid car loans and consider buying used vehicles instead. There are many advantages to buying a used car instead of a new one.

Used cars tend to be much cheaper than brand new cars. Because of this they are easier to save money for. They will often be sold by private owners instead of a company, and the owner is likely to be much more flexible. You save money because you are purchasing a car at a wholesale price. Unlike a car loan, you won’t have to pay interest when purchasing a used car. At the same time, there are some disadvantages to buying a used car. Used cars will often have a large number of miles on them, and are much more likely to breakdown faster than new cars.

You should also check the bluebook value on any used car you’re interested in to make sure the price the owner is asking isn’t to high. If the bluebook value on a specific car is $3,000, don’t buy it from an owner who asks for $4000 unless there is a good reason to do so. Car loans should be avoided at all costs unless you have a stable job, a high income, or a large amount of savings.

Used cars don’t have the options that you will get with new cars. If the transmission goes out, it could cost you well over $1000 to get it fixed, and this could put you into a financial strain. You should buy quality used cars from companies which have a reputation for making good vehicles.

Or see more at wikipedia