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 Car Loan Interest Rate

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weggoweggo
post Apr 14 2007, 11:44 PM

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Usually when I'm tempting to upgrade to a brand new foreign made car, I scared the shit out of me by assuming I need to pay in full. Assuming we are able to save about $500 per month, it takes at least 7 - 10 years to amass a sum enough to buy MyVi with cash. The all important question, do we want to waste 1/3 or /14 of our life saving to buy depreciating assets? Funnily when we narrow our financial limit just on monthly payment stretching 5 - 9 years, the impact is not readily realized. Sorry if my words a bit harsh, but I myself took a 5 years car loan then. It seemed I have been working my entire life b4 paying it off. The day when anyone pays off his financial burden, priceless. There's nothing wrong owning a car but making the wrong & impulsive purchase could jeorpadize anyone's opportunity to accumulate wealth. Most folks discounted hidden costs factors e.g. inflation, fuel, maintenance, family and feel-good (an example, who wants to wear singlet & shorts driving a Beemer?). My rule of thumb, find a car (1st or 2nd hand) which will be paid off in MAX of 5 years installment & 1/5 of take-home pay. You go figure the installment and car made.

Let me ask a simple question. Do you agree that the time when we start taking car or housing loan, our attempt to save money dwindled or even diminished?

 

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