By Cathy Jones on February 23, 2010
.jpg.aspx?width=75&height=75) One of mans’ unavoidable necessities in this day, age, economy and life as a whole, is the automobile. Before the car was invented, a man could take a trip by foot or horseback. These trips, depending on the destination, could take weeks, if not months!
Since the first car rolled of the assembly line, man has stretched his travel boundaries further and further. As more roads and interstates are created, we now have access to many places we once only Our dependence on the car has grown in leaps and bounds, not only for these long trips, but for the short ones too! Everything including running errands, shopping, Dr. appts., visiting friends across town, etc., etc.
Today it is almost impossible to go anywhere without reliable, safe transportation. In today’s society, it is next to impossible to have this decent car, because the prices preclude us from paying cash for it. So we go to the dealership and with a 10-20% down payment and good credit you can get this vehicle “financed” so that it is possible to make a monthly payment to the lender, and have that vehicle we want and need.
There are many financing options for cars. We want the lowest interest and payment we can get, and this, along with our credit rating, will determine the length of the financing contract. Some people will take a longer contract length to accomplish this. Many people don’t take the time to actually read the entire contract, and would be surprised or shocked to see that the longer the contract, the more that car will cost! Sometimes, depending on contract length, we can pay almost double the price for the car! This can be exampled in a 96 month contract! That is eight years! You could, in essence, with this type of loan, make payments, while manageable for your budget, would have you paying up to, and sometimes over twice the price of the vehicle! Imagine paying $40,000 for a $20,000 car! If you were able to make a payment of a few dollars more you could perhaps significantly drop the length of the contract, making it so that the car is paid off sooner, and with actually less money paid out overall!
OK, so you say that you can’t afford a higher payment? If you are to look at the length options though, you might find that the payments are only slightly more. Can’t you afford to come up with the extra few dollars by cooking at home every night as opposed to going out to eat, even once a month? If just you and your spouse go out once a month, an average dinner out would cost around $15.00 per person including drinks and tip, making the total bill around $30.00. Would you be willing to give that $30.00 every month up so that you could get that shorter car loan? Rearrange your dining out schedule, maybe only dining out once every few months, or going to that movie, sometimes as much as $20.00 each with drink and snacks, just once every few months.
The other benefit is that with a shorter loan you pay off you vehicle sooner and so you can go out and celebrate your good fortune earlier than you would for 8 years! You can do it, I know you can. I did! And I don’t know about you, but I love a good celebration now and then! Especially for my own accomplishments! Good Luck!
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