My Advice

My friend Donna has a long commute each day. Her round trip is over 60 miles. She shares the driving with a co-worker and yet they both put many miles on their vehicles.

Recently Donna traded her 7 year old 150,000 miles Sebring on a 2004 Sebring. It's a beautiful car. She looked at new cars and priced what she really wanted at $30,000.

My advice to her would have been not to take a 60 month loan on the "new" used car. That's 5 years to pay off a car that will perform about like her old one and start needing major repairs when it is 6 years old or 3 years from now when she will still be making payments.

Worse yet, when it is 7 years old and she's back looking for a new car, she will still owe a year's worth of payments. I think many people find them selves in that boat. Trading in, satisfying old debt, and taking on 5 year loans - an unending cycle.

Donna's story was all about getting payments down to an amount that would fit her budget. Makes sense. But, it is short sighted. Let's hope the nice used car has a long healthy life.

'til later