The Big Mistake People Make When Buying a Car
I see it every day people come in with a monthly budget, but the car they want is rarely within it.
The salesman does what he is supposed to do. The finance manager does the rest.
350 a month for 60 months becomes 425 for 72 months
15 years ago 250 a month for 48 became 299 for 60
25 years ago 150 for 36 became 180 for 48
Long Term Transportation Plan
Luke 12:15 Then he said to them, “Watch out! Be on your guard against all kinds of greed; a man’s life does not consist in the abundance of his possessions.”
On it goes; people don’t have a plan and stick with it.
By the way 72 x 425 you pay back $30,600.00
vs. 350 x 60 you pay back $21,000.00
You just upped your pay back $9,600.00 one third of the total price
seemed so easy just $75 a month.
Proverbs 11:14 Where [there is] no counsel, the people fall; But in the multitude of counselors [there is] safety.
Solution:
Develop your own long term transportation plan
How many miles a year?
How many years of ownership?
Total of payments
Total maintenance over the life of the car
Total Insurance
Total fuel cost
Yearly investment . Example: #1
Vehicle: 2008 Chevrolet Impala program car original price $15,000 15Kmiles
How many miles a year? 15k miles a year 165,000 total miles with 15k originally
How many years of ownership? 10 years
Total of payments? 60×300 = $18,000.00
Total maintenance over the life of the car
$900 in oil changes
$2,400 in major services
$1,200 in tires
$3,500 in repairs
Total maintenance = $8,000.00
Total Insurance for 10 Years = $3,000.00
Total Fuel cost for 10 Years = $25,000.00
Registration and Taxes for 10 Years = $3,000.00
Total Cost of Ownership for 10 years $57,000.00
Depreciated to Zero
Yearly investment = $5,700.00
Example #2
Buy the Same Car New and Keep it only 5 years original price after discount and rebates $22,000
How many miles a year? 15k miles a year 75,000 total miles
How many years of ownership? 5 years
Total of payments? 72×400 = $28,800.00
Total maintenance over the life of the car
$400 in oil changes
$800 in major services
$500 in tires
$900 in repairs
Total maintenance = $2,600.00
Total Insurance for 5 Years = $1,500.00
Total Fuel cost for 10 Years = $12,500.00
Registration and Taxes for 10 Years = $1,900.00
Total Cost of Ownership for 10 years $47,300.00
Equity to Trade $3,000.00
Loan Balance with one year left to pay $3,500.00
Current Market Value (selling it Yourself) $6,500.00
Total Investment less Current Equity $44,300.00
Yearly investment = $8,860.00
Savings in keeping the car for another 5 years= $15,800.00
Phil 4:6-7
Be anxious for nothing, but in everything by prayer and supplication, with thanksgiving, let your requests be made known to God; 7 and the peace of God, which surpasses all understanding, will guard your hearts and minds through Christ Jesus.
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