Before you take the steps to buy a new car, remember that cars are a depreciating asset. Can you really afford a new car? Answer Suze’s car shopping questions in the workbook below, and follow her advice for a clear answer.
Video: Can Freda really buy a new car? Watch to see if Suze will Approve or Deny her request!
Suze’s New Car Check List:
1. Be aware that the low rates you see advertised are typically only for borrowers with pristine credit scores (above 720 or so). So make sure your score will qualify you for a great rate.
2. Get a maximum loan term of 36 months—no longer. A car is a depreciating asset, so you should put as little money as possible into the purchase. The longer the loan, the more you pay in interest.
3. Consider a gently used car. Since the most significant drop in a car's value occurs in the first two or three years, buying one that's just a few years old means you avoid paying for those early years of big depreciation.
Tools: Click here for a Suze's Advice on Buying a New Car.
Money Lesson: Never lease a car.