First of all, unless you’re a millionaire, in my opinion a new car shouldn’t even be considered. No other “investment” will take such a huge loss in value over such a short timespan. When you drive off the lot, the vehicle is worth 20% less. Secondly, most folks buying new cars now are taking out 5 to 7 year loans. In those cases, the car almost always loses value far faster than you put money into it – thus, if you want to, you can’t even trade up because you’re upside down on the vehicle.
If the engine in your vehicle has failed, you have an important decision to make. You have to crunch the numbers to figure out if an engine replacement makes sense for you and your family’s financial security. Many people, in my estimation, fail to do this properly though and prematurely replace a vehicle. They say, ‘I have a $2,000 car. Repair will cost me $2,000. Thus, repair is a bad idea.” In my opinion, that’s bad logic. [Read more...]
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