The Worst Way To Buy A Car | Never Buy This Way

So as things get more expensive and salary don’t really move as much, you could understand why we would go from a 3-5 year term, to now almost 6 years. And theirs a new term in town called the 84-month car loan (that’s 7 years ). A long time. So, let’s talk about it and see if its worth it.

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1. Financing terms and details
- Now this is common sense, the longer the loan, the lower the payments are going to be
- But the longer the term, the more money you are going to end up paying

Think about it:
- If your neighbor is selling you a car for $10,000 dollars and he agrees to give you a one-year car loan with no interest
- That means every month you’ll have to pay him $833.33
- Now let's say, that’s too much money for you, you convince him to give you 5 years to pay it off and in return, you’ll pay him an extra $1,000 at the end of the loan
- This is a terrible deal but he agrees, your payment are now $166.66, and you only have to give an additional $83.33 per month, to cover the extra $1000

What happens is simple:
- At the end of the 5 years you have a car, he has been paid $10,000 and you paid him $1000 as a bonus
- Your total out-of-pocket expenses is $11,000

However:
- The 10,000 dollar car is only worth $5,000 dollars now
- Which is normal and you expected that

Is this bad:
- Well in this is example it can be debatable but in real life it's usually a bad idea
- Here is why

Let's go faster:
The car cost $25,000 dollars and the interest is 10%
- And the term is 7 years
- Your monthly payments are $415.03 dollars
- After 84 payments you’ll be done
- You would have paid $25,000 plus $9,862.49 in interest for a total of 34,862.49
- Now the 25k car is only worth $12,500 on average
- Common sense tells you that’s a terrible deal

2. So what the alternative Tommy
- I’ll tell you what no one wants to hear
- Wait a little longer and suffer a little longer, it’ll be worth it

Here is what you should do:
- So if you have $500 you can make the payment each month, that’s $6,000 a year
- If you save up for 1 year you can buy a 6k car in cash or if you save up for 2 years you can buy the car of the guy who paid 35k and now his car is only worth 12k
- And you can own it in cash

But what about in the meantime
- Well not all cars are built equally
- You can buy a Honda Civic or Toyota Corolla that’s about 10-15 years old
- And but it is for a good price in cash
- It's reliable and not pretty, but it will get you rolling while you save up

3. Is it ever a good idea to borrow money for a car
- In my opinion it's not
- If you can buy something in cash and save up for later
- It's better

Comments:
#1
- But I’ll spend more on repairs than the car is worth
- You’ll never spend 35k on repairs like you would on that new car

#2
- But it's just a little debt
- The answer is, that the less debt you have the better you’ll be
- Debt is bondage, once you have it, it is not that easy to get out of it

#3
- What will people think of me
- The people who care about what you drive and judge your character on it, are not the people you want to consider their opinion
- And your friend that’ll make fun of you, is still going to ride along with you

4. While it is true cars have become more expensive they haven’t changed as far as depression goes
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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.

[LiveLeveLeviL]

My rule of thumb is if the average annual repair cost divided monthly over 5 years is LESS than the cost to fill up the gas tank each month, i keep the used car… repair as necessary and invest the difference into assets/dividend paying stocks

[qjones]

My 'dream' car is an older Honda Accord Coupe V6

[goddy]

That’s my mindset, looking at the sienna and Highlander. Sedans like Honda Accord and Toyota Camry hybrids.

[abrahamalatorre]

If people really had this mindset with vehicles and stick to reliable cars, they would be able to save and invest for long term. Good points Tommy

[thatheat]

Bro come to the u.k, we'll love to have you here, much respect 💯🙏🏽God willing we prosper as his people♥️

[dnah]

Worst way is probably rolling negative equity into a brand new 2024 car.

[georgetaylor]

Tommy Bryson --- FHA ALREADY HAS THE 40 YEAR (QM) QUALIFIED MORTGAGE -- What is a QM loan? A fixed rate 30 loan insured by the Federal Housing Administration. Usually it is first offered to those that want to refinance - Those that want to buy with an FHA 40 year will have to meet certain criteria -

[cchakandinakira]

How are you doing...l want to buy a land Rover 2017 model discovery 2 liter diesel l want to buy it cash is a good idea the price is 10:000 dollars 💵 is it a good idea

[MM-ngwc]

Yea. Alot scams, lemons. How do you have a good used car?

[foxbat]

You're a great used car salesman but not in the usual sense