Archive for the 'General News' Category
Canadian auto dealers are promoting
But here’s a good rule of thumb for anyone in the market for a new car or truck: If you can’t afford to pay off your
You’ll almost certainly regret stretching your payments out to six or seven years. That kind of financing can easily launch you into a never-ending cycle of auto payments.
As Jack Nerad, executive editorial director and market analyst for Kelley Blue Book, puts it: “Be willing to get what you can afford or you’ll always be in debt.”
Here are the six reasons to avoid extra-long auto loans:
Reason 1. You’ll pay thousands more in interest.
Longer loans have higher interest rates and you’ll be paying that higher rate over a longer period.
For example, a Cadillac CTS at $34,000 in a 60-month loan at 7% interest will cost you $673 a month. Over the life of the loan, you’ll pay about $6,400 in interest.
The same car will cost you $560 a month if you get an 84-month loan at 9.7% interest. (Longer loans always charge higher interest rates.)
But by the time the car is paid off, you’ll have spent $13,000, or more than twice as much, in interest.
The interest you pay on an auto loan is not tax deductible, so there’s no benefit to you.
Reason 2. You’ll probably want a new car before the current one is paid off.
Dealers typically use long-term loans to squeeze buyers into luxury cars, big pickups and full-size sport-utility vehicles that cost $30,000 or more.
While those are very nice rides, the experts at Kelley Blue Book say most drivers still want to get a new car every three to five years, or about the time vehicles begin to need more extensive, not to mention expensive, maintenance.
With an extra-long loan, however, you’re still years away from getting the pink slip.
Reason 3. You’ll be upside-down on your loan most of the time you’re paying it off.
Though you’re reducing your debt slowly, your new car or truck will depreciate quickly — losing 20% to 30% of its value in the first year alone.
With a 60-month loan, it’s not uncommon to owe more than your car is worth for the first couple of years. With an 84-month loan, you’ll be in that unenviable position until your sixth or seventh year of payments.
Let’s say you take out an 84-month loan on a Toyota Highlander. At $28,225 and a 9.7% interest rate, you’ll still owe roughly $18,400 after three years. Try to trade it in and the dealer will give you $15,000, if it’s in good condition.
Or what about the Cadillac CTS? If you kept it for five years, you’ll still owe $12,155 but can only expect to get about $10,500 when you trade it in.
Reason 4. You could still be paying for your car after you get rid of it.
You’ll have to roll the difference between what you owe and what your car is worth into the loan on your next car.
Using our two examples, you’ll have to carry over $3,400 in debt on the Highlander and $1,655 on the CTS.
Car payments would become a never-ending drain on your budget, and the extra debt would make it that much harder to afford the payments on your next car. You could easily be forced to trade down to a less-costly model.
Imagine how you’d feel driving around in a RAV4 or Chevrolet Malibu while making payments worthy of a Highlander or CTS.
Reason 5. The other options aren’t all that great, either.
Of course, you can get more for your car or truck if you try to sell it yourself. You may even be able to command a high enough price to cover your note. But if you can’t, you’ll have to make up the difference out of your pocket before your lender will release the title.
Either way, you won’t reap the financial rewards of buying a new car — paying it off and going a year or two without payments, or selling it and having money for a down payment on your next vehicle.
To obtain any of those benefits, you’ll have to stick out even a
Reason 6. If the payments don’t kill you, the operating costs will.
Many buyers tempted to use long-term loans are so fixated on the payments that they don’t take into account how much their expensive cars and trucks will cost to run.
Filling up a big pickup or SUV typically costs $70 to $90.
And finally, the economy is slowing down, making this a bad time to be taking on more debt — especially more debt than you can really afford. Look at the big picture. Layoffs, pay cuts and other financial problems could be on the way. One critical step in preparing for a recession is to be conservative in your spending.
By Debbie Reinheimer
Interest.com Contributing Editor
Have a question about cars or your finances? Ask us at editors@interest.com.
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Owner Claims Stolen Camera Bag
News Channel 7, SC - After a camera bag was stolen from an Upstate hospital over the weekend, filled with tapes chronicling the lives of an Upstate man’s children, … |
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Killer caught on camera carrying victim's head in a bag
Hampstead and Highgate Express, UK - He was caught on bus CCTV carrying Mr Ouyahia's head in a bag before throwing it into the canal. He dumped the rest of the body in a supermarket cage where … |
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Review: Seattle Sling Dry Bag
CrunchGear, NY - There is more to it this case than just a waterproof dry bag though, but simply put, I’m satisfied. The Seattle Sling Dry Bag isn’t your ordinary camera bag… |
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Store thieves caught on camera as they calmly bag their loot
Portsmouth News, UK - Three men were caught on camera calmly stashing cash into a bag after breaking into a safe at Boots in Waterlooville. Police say it was not the first time … |
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The Sixth Stage of Grieving: Buying a New Canon 50d Digital SLR
Wired News - In a tragic fit of forgetfulness, I left my camera bag on the ground behind the car while packing for Maker Faire. A few distractions and a run inside to … |
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Jill Meets Jack at jill-e Designs
Popular Photography Magazine - jill-e Designs, known for their fashionable, female-friendly camera bags has launched a new line called jack. Designed for the y-chromosome photographer, … |
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Camera Found, Recording Birth Of Missing
WYFF, SC - Darius' wedding ring was also in the camera bag. His wife was squeezing his hand so hard during labor that he took off the ring and put it in the bag. … |
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Man Pleads For Return Of Stolen Camera Bag
WYFF, SC - Someone stole the camera after Darius, who didn't want his last name disclosed, said he accidentally left his camera bag in a hospital hallway. … |
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Make It: Stealth Camera Bag
Wired News - By Charlie Sorrel November 06, 2008 | 10:22:35 AMCategories: Cameras, DIY Sometimes you need a fancy camera bag, with a tripod strap and little slots with … |
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