Crazy Money! A Costly Tahoe!

It’s Crazy Money Day!

Blaisey Arnold bought and financed a new Chevy Tahoe. 3 years of payments total $50,000, but she still owes $74,000. That’s crazy! She made $1,400 payments on that car while her husband owes $70,000 on his, both paying 14% interest. I don’t know why they still owe so much on their vehicles. What I do know is that those new cars lost value the minute they were driven off the lot. Most cars lose 20% the first year, and 15% each following year until about 4 or 5 years in age. 60% of the purchase price is lost within the first 5 years! Depreciation matters if you ever decide to sell or trade in your vehicle or when insurance “totals” a car following an accident. Kelly Blue Book recommends the following for getting the most value from your car.

• First, perform routine maintenance and keep all records.

• Avoid flashy add-ons. Just keep it attractive to most used-car buyers.

• Sell it yourself at market value.

Blaisey Arnold sold her Tahoe and paid cash for a different vehicle. Savvy buyers can save thousands of dollars by purchasing cars after their initial depreciation. Open a designated savings account and make automatic deposits towards your future car purchase. In the meantime, study vehicles that retain their value. Then, when you’ve saved enough money, ask the Lord to lead you to the right car. Once you pay cash for a car, you’ll never want to finance another one again.

If you have auto loans, mortgage, and credit card debt, our budget coaching program can put you on the road to financial freedom. Go to crown.org and click on the “Get Help Now” tab. You can start today at crown.org.