Having just written ‘How Much Car Payment Can The Average American Afford’ I am more convinced that Americans need a simple plan at the lowest possible cost for personal transpiration. I believe this one is both affordable and workable to get into and a long term best strategy.
The ten or 11 year old $4,500 car. examples 2005 VW Beetle, 2006 Dodge Stratus 4cyl, 2006 Chevy Malibu or Impala, 2006 Ford Taurus, 2006 Nissan Altima, 2006 Mazda 6 any of these should be available with less than 150K miles for that price range.
Now even if you have to borrow $4,000 of that with this simple plan I believe you can experience the lowest possible personal transportation cost. Here are the numbers even borrowing $4,000 of that.
The Secret is: YOU HAVE TO KEEP IT TEN YEARS EVEN IF YOU HAVE TO REPLACE SOME MAJOR COMPONENTS. THE BEST BANG FOR THE BUCK IN MY VIEW
Initial Investment $4,500
Annual Maintenance for 10 years $5,900. *** Bureau of Labor Statistics YES They WIll Go 250,000 miles
Interest 12% for 2yr loan @$188 per mth $ 500
End Value ($ 900 )
Total Investment $10,000 or only
$1,000 per year only 3% of the Average Americans total budget…get two and it’s only 6%
**** See A Great Idea Below on how to get this loan
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LEAST BANG FOR THE BUCK
NEW CAR EXAMPLE (Average New Car Today) Keeping it 10 Years
Initial Investment $33,666 (no I didn’t make up the 666 https://goo.gl/LO8Z8q)
Annual Maintenance for 10 years $2,352. *** Bureau of Labor Statistics
Interest 5% for 6yr loan @$483 per mth $ 4,787
End Value ($ 4,500)
Total Investment $36,305 or
$3,630. per year 10% of the Average Americans total budget…get two and it’s 20%
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NOT QUITE AS BAD BUT STILL PAINFUL
1 Year Old Program CAR EXAMPLE Keeping it 10 Years
Initial Investment $17,000
Annual Maintenance for 10 years $4,116. *** Bureau of Labor Statistics
Interest 7% for 5yr loan @$483 per mth $ 3,000
End Value ($ 2,500)
Total Investment $21,616 or
$2,161. per year 6% of the Average Americans total budget…get two and it’s 12%
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Now for many the Challenge is dealing with their current problem, (you owe way more than your car is worth). I have heard some say dump it and get out from under it, that is a way to take all the loss and get somebody else a good car you cared for…. My plan works like this.
KEEP IT AND TURN IT INTO THE 10 YEAR OLD DREAM CAR THAT”S PAID OFF…Time is on your side if you don’t trade or get ride of it. Eventually it just keeps getting less and less per year to drive. How do you think Old Red became the dream truck it is. I have cared for it for 20 years.
**** $4,000 loan idea. Used Car loans are harder and harder to get, especially on 10 year old ones, (there are reasons for that you won’t like and I haven’t the time to go into that). Here’s my plan: A well to do relative or friend may gladly take your 12% interest compared to other investments, and they can hold the title. They make $500 in two years and you have a hassle free loan, I know it works I’ve done it myself a few times both ways.
At the end of the day my father’s old adage is still profound wisdom in my book. You can’t put too much money in a good car and you can’t put too little in a bad one..To find out more on how to discern that read ‘Five Basics In Buying A Good Cheap Used Car’
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