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A fair amount of folks buy or lease a Honda/Toyota/etc, because they consider said cars to be the most reliable...and then trade it in before it breaks.
One common thread I see running through the automotive forum-in their world, the one where cars only last 3 years or 50,000 miles before they explode into flames,this might make sense. In world where tires can last up to 70K, even thr worst cars are better than the best ones of 20 years ago, and 200K is the new 100K, this might make sense, but anything built in the last decade is so much better, so relaible, come on people, it's not 1950 anymore. Oil goes more than 3,000, tires last more than 20,000, shocks last more than 15,000, etc. And yet the same people buy the same cars, and trade them in at the same time, it boggles my brain, and I know some of these people. Maybe it's telling that one guy has a Model T hobby.
The money might be free, but it's still debt at the end of the day.
Learn about debt.
There are different kinds.
Some debt works FOR you.
Cars don't generally fall in that category, but making generalized, ignorant statements like yours here is not helpful.
I'm hard on my cars and don't believe in cleaning, etc. I carry trash and recycling to the dump and dogs to the vet. I would never lease a car.]
I buy the cheapest, best-mileage, best-reliability entry-level car and drive it until it's undriveable, with pristine maintenance. I had my Mazda 323 for 11 years and 170K miles, and my current Toyota Matrix is going on 12 years and 140K. It's so cool to have a car that drives well and is solid and safe and been paid for since 2008. I have a couple of duct tape repairs, but what the hey. My mechanic is sure he can coax out 200K miles at least.
Different strokes. I am so not into cars for their own sake.
What do you care? They are both payments. If you can afford it that’s all that matters. And what do you mean debt affects my credit? Actually, you are right. It improves it.
It is crucial that you don't fall into the trap of relying on loans that don't reduce principal faster than depreciation. (By "rely on", I mean "buying a car that you otherwise could not make payments on". If you stretch a loan out when you could afford a short one, that is different, as long as you save or invest the difference. I am only talking about those who would have no difference to invest because they are stretched thin).
If one doesn't take this precaution, then one's equity (whether positive or negative) gets smaller every month, which for obvious reasons is not a long-term sustainable strategy, because with sufficiently negative equity you will be stuck with a huge, unescapable loan with ginormous payments. At that point, you are likely less than 4 months away from the Repo man's visit. This is so even though at first your payments seemed perfectly manageable.
If I can pay $250 a month for utilities, I can pay the same for a new car for life.
If you instead deposit $250 a month for life into a good mutual fund, after 40 years you will be in the 1%. You'll be a millionaire.
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