Should I Buy A New Car?

A car seems to be a necessity in today's day-in-age. It takes you to and from work, to pick up the kids from school, takes you to the doctor, etc.. Therefore, it is no question that there are multiple types of cars, and competitive prices. But the proper question is, "Should I drive a new car?"

Yes, but not until you can afford it without those nasty payments.

Did you know that 80% of all millionaires drive used cars? There is a very logical reason for this lifestyle choice.

Let's do some simple math.

Think about what would life be like without car payments. Let's say that instead of paying $350 (or whatever amount you pay) you save up for a few months to buy a $1000.00 cheap and used car. For a while, all you need is something that takes you to where you need to go. Put your pride aside and drive a beater for a while. Then, instead of paying a $350* car payment, you save up the money you would usually pay the dealership for a year.

Here is where the math comes in!

A $350 payment for 12 months comes out to $4,200! Then, you can sell the $1000.00 car that was used for the same amount as you purchased it for since the value would not have depreciated much over the year. However, let's say, for the sake of easy math, that you can only sell the car for $800. Over the course of a year, you have saved up the money to buy a $5,000 car with NO MONTHLY PAYMENT! Then again! $350 x 12 months = $4,200. Sell the $5,000 car for $4,800 (again for the sake of math). There is a $9,000 car in two years without a monthly payment and so on! Pretty smart, right? However, it is not easy. You must be willing to drive a beater car for a while so that you can drive the car of your dreams, later.

This is why millionaires drive used cars. Think of all the things you could do with money if you didn't have a month car payment!

To reiterate our answer to the age old question, "Should I buy a new car?" While it may take a while to drive a very nice car, it will be worth it if you begin by driving a used car until you can afford one right off of the lot.

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