Your 84 Month Car Loan Is Making You Poor

It took me along time to understand this, just because you can afford the payments doesn’t mean you can afford the item itself. I learned this the hard way back in college. I wanted to buy a $3000 Mac Book computer, and my mom gave me $1000 and I borrowed the other $2000 on a credit card and I said, I can afford the payments, so I’ll be fine.

Well, the story has a happy ending, which I learned my lesson. But alone the way I lost my job, the computer lost value, and there were times where I was sure I was going to be able to make those payments. The computer turned from a dream come true, to a problem.

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Average car payment: $500 over 84 months (7 years)

1. I can Afford it Illusion and everyone else does it

-Well most people are broke don’t forget that

-You get talked into a more expensive car (savvy sales men focus on payments instead of price)

2. It takes your Money ( you’re thinking Short term and it keeps you in debt longer )

-You get what you want now

-By subscriber to a loan term string of negative payments



3. Flexibility – Its yours, they can't take it, it's less stress

4. Solution

-Built up to the car you want

Forbes

1. You end up under water ( value goes down by 25% while you pay 12-15% down )

-If you want to sell but owe more than its worth it’s a problem

-During covid a lot of ppl got an exit opportunity and didn’t take it


2. Trade-in short fall to keep you negative

-Car worth 10k but you owe 15k

-They will give you 10k and add the 5k to your new loan

-It's so toxic

3. You end up paying big bucks

-Retail price, interest and opportunity cost

Forget about the interest rate focus on

-Can you cash

-Do you more half your income in cars

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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I'm an Accountant but I'm not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.

[KingDrewPhilip]

I have a Lexus IS. An old one ! 2009 model fully paid. I also have a 2015 Toyota Corolla that I paid off in 2019. It’s nice not having any car payments at all, and it’s also nice having the option to alternate between the two cars. Both vehicles are extremely reliable. I maintain them both, and they have not let me down.

[ltltornado]

I was so appalled when i learned my sister and her husband went into a car dealership ASKING for the longest term! At 9.3%! Noooo.... ugh it killed me. But she just got all defensive and told me she is happy and to mind my business. sooo stupid..😫

[Chandlerite]

People love going into debt to buy things they don’t need, with money they don’t have, to impress people they’ll never meet…

This is great advice!

[KeithGolfs]

I made it with the 200th Like as well! Thanks for continuing to share your outlook on these concepts, Tommy. Unfortunately, people are often met with commercials about how the newest model car can make their lives better before they run into videos like yours. Regardless, the folks that follow you will know they have a credible resource who can break down the numbers and relate them to life in a meaningful way. thanks from Cali

[ig]

84 month terms are used to lower the car payment, yes. But, can be beneficial if you know how to manage money and not think simplistically... Don't fork up 20k for a car in cash because it is a depreciating asset that is dumb. Here's how to finance: keep payments low don't finance high payments because it's 36 or 48 month's you're throwing away money, be sure to have enough down to cover deprecation in the first year, make extra payments to not pay the interest long term, make sure there is no early payoff penalty, and keep that extra cash on hand for investments and other appreciating assets. Also, when rates come down refinance to a better term. That is how you win the finance game.

[theoperator]

'But l can't get a chick driving a hoopty !"

WELL THEN YOU'RE WINNING EINSTEIN ! STAYING SINGLE MAKES YOU WEALTHIER FOR LONGER !

[alycemaloney]

I wish I had thought of any of this before buying 2 new cars in a row and basically paying half of a house loan for the 2 of them. It was a Huge waste of my money & all the time I spent having to work like a dog to pay them off.

[nala]

What's even crazier to me is you can get 20, 25 or 30 year loans on RV's and boats. How is this allowed?

[KT-rhhq]

I made it! I was very fortunate to get an inheritance from grandparents years ago. I bought a 2 year old used car and used the majority of my inheritance to pay off the loan after my first car payment. This was before I knew anything about investing however not having a car payment has been amazing. I am now in the process of saving for my next car to pay for cash as I don’t want to ever tie up my money in payments again. The extra freedom and money saved and invested from not having that large monthly bill is so worth it!

[theoperator]

Tommy has awesome content that is also of VALUE. Good job Tommy

[keekee]

Your knowledge is so valuable. Great video, thank you for sharing.

[newstart]

I made it! Great informative video. Thank you for sharing your knowledge.

[angostura]

One thing not mentioned is having discipline. It’s ok to buy a new car on rare occasions, like when you drive your last new car into the ground and it no longer makes sense to keep maintaining it.

Japanese or European cars will last 10-15 years. I’ve paid off my 2016 Passat and it’s 7 yrs old with 75k miles. I’ll pass it onto my kid in 4 years as her 1st reliable beater car. Then I’ll get myself a new car, and keep that til it dies. Don’t even try to do that with American cars.

Discipline is the key.

[smb_]

I never purchased a car before the one I want is 15k not going to get it til I find a job where I can make 30k a yr cause that’s only for a car my current job is rent and bills. Thanks I literally didn’t know if I could afford it and if I was gonna hurt my pockets or not

[theoperator]

Me... I'm driving a classic muscle car . Cuz my life is dope, and I do dope sh^t. ( cuz I'm SINGLE and with that I stay sucker FREE and drama free and that boys has extreme value. Rub one out and binge play C.O.D. all you want.

[ButcherBird-FWD]

Pretty solid advice on this video. Fair enough all around.

[erinjones]

Hello Mr. Tommy, I had a question to ask. Regards to the envelope challenge, how can one continuously keep the envelope flow, when entering the high 40s 50s and so forth, what is your advice?

[jonb]

Guess I'm way old. Back when I went to college mid-1980s, bought a used Volvo for $200. Was a 1971 (Volvo 142) and had 200K miles. Loved the thing, and sold it five years after at just over 260, 000 miles for again, $200. Most expensive car I ever owned was back 1998, a ten year old Corona that I paid under $2000 for. Today I don't have or need a car ... public transport is wonderful and cheap. Not needing or owning a car has been a huge factor in allowing me to retire early.

[vicc]

I drive for work about 100+ miles a day and been driving a beater for the past year, I saved a really good amount. I really don’t know how to transition out of this car if I should pay for cash or making payments or renting, all I know is I definitely want a newer car, any advice?

[jbarkley]

Got a 2020 Toyota Camry. Paid $26k in 2019 and it’s worth around $24k 4 years later 🤯