Very soon income tax refunds will be pouring in! Many people eagerly await their refund to purchase a car or truck.
What is the smart thing to do? Do you buy a new car and make a down payment, buy a used car and finance the balance, or find a used car you can pay cash for?
If you are like most of us, buying a $30,000 plus car for cash is way out of reach. Putting a down payment on a new vehicle decreases your payments, but you still have a large balance owed and a high monthly payment.
Buying a late model pre-owned vehicle, you will still have that payment and a high debt to pay over many years.
Both of these options will also be rapidly decreasing assets. They lose so much value that you are likely upside down, or owe more than it's worth, until very late in your loan payback.
Most financial adviser's will recommend, you buy what you can afford to pay for.
Buying an older vehicle, maybe with a few more miles, you could find one that you can pay cash for and owe nothing else.
When buying an older vehicle, it is important to realize you may have more repair bills to keep it in good shape, but if you spend $1,000 a year in repairs, that is so much less than having a $400 payment for 12 months a year.
Fact is, an older vehicle does the same thing as a newer car, it takes you from A to B.
When you are ready to change your financial situation, it's time to consider getting rid of those payments, and pay cash for a daily driver.
It might not be as cool as the newer cars, but you will find it cool getting out of debt.
With any vehicle, older or newer, I would always recommend getting your mechanic to check it out prior to purchase.
A $100 or less inspection, could save you tons down the road.
So when considering what to buy a used car or truck when your tax money comes in, we hope you will consider Competition Cars and Classics Used at 610 W 4th St. Salem Virginia, 24153.
Kenny Martin- Owner