Edmunds Answers

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  • avatar morin2 11/21/12 10:10 am PST

    There's no need to apologize for the long story - it helps us to evaluate your situation.

    I'm going to suggest something that you may not have considered and probably don't want to hear. Try to avoid the American tradition of digging yourself into a deep hole of consumer debt. Financing a depreciating asset is a mistake for most people. It is a grand tradition and some would point out that the economy would be even worse if people starting to spend responsibly and avoided debt like a disease. The industry of selling cars has evolved into one that presents financing as "normal" when it is actually a risky strategy from a personal finance perspective. Even a 3 year car loan requires 3 years of job security. I don't know anyone with that security, myself included.

    You have sufficient funds to buy a very nice used car or small SUV. Come up with a short list of reliable models, find a clean example, then have a mechanic check it out before you start to negotiate price. A certified used car will be less risky.

    We all like our toys - especially those that are as pleasurable as a new car and as nice as the X1. If you have a high income and low living expenses, then you could save until you have enough to pay cash for that X1. Otherwise, I suggest you try to avoid debt like a deadly disease. There is freedom in living debt-free. It is more liberating than the joy of any financed new car. It is a contrarian philosophy but for many of us, it is also a safe way to weather the storms of uncertainty. There is no "good debt" - except possibly debt that is used to generate income.

    Good luck.

Answers

  • morin2 11/21/12 10:10 am PST

    There's no need to apologize for the long story - it helps us to evaluate your situation.

    I'm going to suggest something that you may not have considered and probably don't want to hear. Try to avoid the American tradition of digging yourself into a deep hole of consumer debt. Financing a depreciating asset is a mistake for most people. It is a grand tradition and some would point out that the economy would be even worse if people starting to spend responsibly and avoided debt like a disease. The industry of selling cars has evolved into one that presents financing as "normal" when it is actually a risky strategy from a personal finance perspective. Even a 3 year car loan requires 3 years of job security. I don't know anyone with that security, myself included.

    You have sufficient funds to buy a very nice used car or small SUV. Come up with a short list of reliable models, find a clean example, then have a mechanic check it out before you start to negotiate price. A certified used car will be less risky.

    We all like our toys - especially those that are as pleasurable as a new car and as nice as the X1. If you have a high income and low living expenses, then you could save until you have enough to pay cash for that X1. Otherwise, I suggest you try to avoid debt like a deadly disease. There is freedom in living debt-free. It is more liberating than the joy of any financed new car. It is a contrarian philosophy but for many of us, it is also a safe way to weather the storms of uncertainty. There is no "good debt" - except possibly debt that is used to generate income.

    Good luck.

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