How To Buy Used Vehicles Debt Free

Written by John Cook

New cars are one ofrepparttar worst purchases that we can make due torepparttar 102682 rapid decrease in value, especially overrepparttar 102683 first three years. When we finance these vehicles, this turns a bad situation even worse. We have now added a couple thousand dollars in interest torepparttar 102684 cost of a depreciating item.

Used cars arerepparttar 102685 answer to avoiding this big hit in depreciation, but many people still financerepparttar 102686 used car. Let's take a look at how you can buy used vehicles even when you have very little to start with.

Let's assume you wanted to purchase a 2005 Accord for $20,990 and financed it for 6 years at 5.95%. The payment would be $341.85 per month for a total amount paid overrepparttar 102687 life ofrepparttar 102688 loan of $24,613.40. That includes $3,623.40 in interest paid.

Since you had decided that you could affordrepparttar 102689 $341.85 payment torepparttar 102690 finance company, we assume that you can afford to pay yourself $341.85 into a savings account.

We round off this savings and do not account for any interest and assume that you save $4,000 each year. We will also assume that you can drive your current jalopy for one more year while you save this money.

January 2006 you now have $4,000 saved and can afford to buy a 1992 Honda Accord.

January 2007 you can sellrepparttar 102691 1992 for $1,400, add another $4,000 to it and buy a 1995 Honda Accord.

January 2008 you can sellrepparttar 102692 1995 for $2,000, add another $4,000 to it and buy a 1997 Honda Accord.

January 2009 you can sellrepparttar 102693 1997 for $2,300, add another $4,000 to it and buy a 1999 Honda Accord.

January 2010 you can sellrepparttar 102694 1999 for $2,600, add another $4,000 to it and buy a 2000 Honda Accord.

In January 2011 you have reachedrepparttar 102695 value of used car purchases where sellingrepparttar 102696 2000 and adding $4,000 to it will not substantially upgrade your car, so you continue to save.

January 2012 you can sellrepparttar 102697 2000 for $2,400, add $8,000 (two years of savings) to it and buy a 2006 Honda Accord.

How To Never Make Another Car Payment

Written by Tony Puckerin

How To Never Make Another Car Payment Again

Written by: Tony Puckerin

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Car prices today compete with small houses and well-equipped mobile homes. As these price increases become more accepted by consumers, so too arerepparttar longer terms that are necessary to fit them into cost of living budgets. At one point,repparttar 102681 magic payment amount forrepparttar 102682 retail automobile market was $200 per month. But that payment would only satisfy a loan of approximately $8000- 10000 depending on interest rates.

The average car payment today is closer to $400 per month and that's with financial institutions stretchingrepparttar 102683 terms to 72-84 and 120 months. Something has gone terribly wrong inrepparttar 102684 psyche of consumers to even imagine that an automobile will not become obsolete before it is all paid up, 6, 7 or 10 years downrepparttar 102685 road.

All they really need to do is take a look at a vehicle sold in 1995, 1997 or 1999, to get a live preview of what their new car will look like and potentially what it will be worth. Interestingly, research indicates that most Americans get bored with a car after driving it for 24-36 months. Why then wouldrepparttar 102686 typical financing term be 72-120 months?

Atrepparttar 102687 point of purchase, most consumers tend to forget that car payments never includerepparttar 102688 cost of insurance, required maintenance and gas. When these items are added to a car payment, it can easily exceed what some people are paying in mortgages.

It's analogous torepparttar 102689 Middle Eastern people like Iranians whose culture practices beating themselves onrepparttar 102690 back with chains and whips. Every month, millions of Americans facerepparttar 102691 self-inflicted pain of making another car payment. Likerepparttar 102692 Iranians, they believe that if they can do it, it must be good and it will somehow make them better people inrepparttar 102693 hereafter.

A self-made millionaire, Dr. Cooper, an advocate for reversing unnecessary consumer debt has come up with a simple plan to change how we think of automobile ownership. His plan usesrepparttar 102694 same philosophy that our grand fathers grew up with, i.e. never buy anything that you cannot afford to pay for out of your own pocket.

Unfortunately, if we lived by those rules we would need traffic lights and zebra crossings on our major highways because they would be packed with pedestrians.

Well let's share Dr. Cooper's plan. He calls itrepparttar 102695 "Vehicle Saving Fund". This is a basic commercial bank savings account that can be started at any local bank. To make it more meaningful to you, lets call itrepparttar 102696 "Freedom From Car Payment Fund." Anyone can start such a fund; it does not matter if they are currently financing a vehicle.

The idea is that if you intend to be a productive member of society and enjoyrepparttar 102697 benefits of your labor you will need to have personal transportation. This is not optional for most people who do not live in a big city where public transportation is available. The fund should be considered absolutely necessary, much likerepparttar 102698 rent or mortgage, it's a living expense.

Here is how it works; if you are currently driving a financed vehicle, resolve to pay it off in its normal term. It's hard to keep making payment on a vehicle you do not like but that's where repparttar 102699 discipline becomes important. Also, resolve to put aside a small amount every month to your "Freedom From Car Payment" account. Initially, it is totally understandable that it may be a little difficult butrepparttar 102700 amount is not important, it'srepparttar 102701 habit andrepparttar 102702 psychology of doing it that makes allrepparttar 102703 difference. You can start with as little as $5-$10-$25 just be committed to doing it every month until it becomes a habit.

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