The Cost of Buying a New Car

"Take cars, as another example. Say you put $4,000 down to buy a new car worth $24,000. You finance $20.000. Say you are charged 10 percent interest for 48 months. Your monthly payments are $507.20. You have paid not $20,000, but over $24,000. Plus, you probably have zero in your bank account. So now you have a shiny new car with which to drive yourself to the job you'd like to leave but can't, because you have no money saved. Hmmmm. How about if you reversed this scenario and paid $4,000 for a good used car, then invested that same $500 a month for the same 48 months at the same 10 percent interest, compounding monthly? At the end of 48 months you would have a car plus $29,605.92 sitting in your bank account. Hello? Is anybody listening?" lol

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Source: The Simple Living Guide, a book, by Janet Luhrs page 34.

By Carol from Wyoming, PA

March 18, 20080 found this helpful

You have also forgotten to include depreciation once the car is driven of the lot.

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March 19, 20080 found this helpful

I totally agree with you!! JoJo

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March 19, 20080 found this helpful

That's Exactly what my husband and I are doing!!

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March 19, 20080 found this helpful

"A good used car" ---does this really exist?

The older they are, the more expensive the repairs.

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March 22, 20080 found this helpful

Great idea, but where do you find 10 percent interest compounded monthly these days?? LOL

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March 31, 20080 found this helpful

10% interest, you have got to be kidding! Plus, many car offers are 0% now, we have NOT paid more than 5% in the last 15 years!

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