Another area of confusion is dealing with leasing a car. Most people don’t understand how leasing works and if it’s better than financing a car. First let’s talk about financing a new. Everyone knows the moment you sign the loan and drive it off the lot the car immediately loses approximately 25%. You pay for that depreciation in the loan with interest. If you put money down it went down the drain too. This is normally the worst way to buy a car. Unless you’re the type who buys a car and keep it forever and you keep up with all the maintenance yourself then financing can be a very expensive way to go. If you’re the type to trade it in when you make the last payment again it’s a bad decision because there is no guaranteed trade in value written into your loan. You are at the mercy of what you can sell it for privately or what a dealer will give you at the actual cash value. The actual cash value could be much less than the trade in number they put on the buyers form. If you happen to purchase a problem car you are stuck with it and you are at the mercy of the actual cash value at the time you want to sell.
Next buying a used car.
Roger - Your money coach