The irony of the car to payments

How ironic that people buy a “safe and reliable” car for payments, to go to work, and work very hard, to pay for the car.
Only two decades ago, not everyone was released a car payment. Basically, to be given the financing, you were obliged to verify that you had the money to pay it and, only then, would you give it in installments. Things have changed in Latin America because banks and concessionaires realized that they can greatly expand their market if they lend to middle and lower class people. Today, car payment is what defines and keeps the middle and lower class where they are. The car payment comes to eat the little money that could be saved due to all the extra expenses that it includes: insurance, traffic taxes, new car ownership and agency maintenance.

 

I have nothing against cars

I have nothing against cars

I am only against the car taking over you. No one, who is buying or considering buying a car for payments, can say that there is no other way to buy a safe and reliable car. Of course they can buy it; if they only save that monthly fee, in a short time they would have the money to buy it in cash and without being enslaved. It is not the same to save what your payment would be as to make a monthly payment. When it should, everything is at risk. If something changes with your job, for whatever reason, personnel cuts, health, etc., and you cannot pay, you lose your car and everything you have already given. Instead, your car paid in cash nobody takes it, and if a thief likes it … that’s why we pay for insurance.

 

If your goal is to earn money do what the rich do

If your goal is to earn money do what the rich do

Put more money on things that increase in value and less money on things that lose value. You already know that a car, since leaving the agency, is devalued thousands of dollars. Nor is it believed to be more expensive to have a used cart. A cart that you can buy for $ 5,000, even if you put about $ 2,500 in repairs, does not compare to buying a car for $ 25,000 plus interest. Protect yourself from repairs with your emergency fund the first time it happens and add the maintenance and repair category to the budget so you are not continuously draining your emergency fund.

Car purchase With a bank or a dealership?

The purchase of cars does not only have banks as the only means of financing

money cASH

Did you already know Well, if not, it’s time for you to find out. And it is that dealers can also help you finance this purchase. You want to know more? Keep reading and decide whether to buy a car with a bank or a dealership!

 

Cash?

 

Before presenting the financing options I will remind you that you can also buy a car in cash . However, I advise you again that this is not the best option. And you have to keep in mind that cars are goods that lose their value. Better to finance and invest the money we don’t spend, to buy it in cash, in our own business.

 

Vehicle credit with a bank

 

The advantage of requesting a vehicle loan from the same bank is that you can buy both a new and a second car with the loan money. Both options are available in the credit types of banks.

 

A loan requested from a bank to buy a car is also recommended for a payment issue

money

Since the bank specializes in monetary issues, it will know how to give you a solution if you have problems with the fees at some point.

 

Credit with a concessionaire

If we choose a dealership to finance the new car, we will have to first of all get premiere cars in them. Apart from this, dealerships usually give different benefits to their customers and even seasonal promotions that, if we know how to take advantage, can be very convenient (such as car insurance , discounts, etc.).

 

One more point in favor of concessionaires is that they tend to accept more customers than banks, and they are less strict. Therefore, if a bank denies you the loan you can try a concessionaire that probably does approve it.

 

Extra tips

 

Before deciding which entity will finance your credit: Compare well ! And you should know what the total cost you will pay for your new car before buying it. That will help your finances not to get out of balance.

Cash loan or deposit, or how to finance the investment?

Our society’s debt level is still rising. Even if new social programs appear, they are often “overeated”, which of course affects high consumption. There are still few people with relatively high savings, although their percentage is slowly growing. Although this phenomenon is unfavorable for the economy, it continues to exist. So how do you reconcile saving with taking more loans?

 

The devil (apparently) is not scary!

car loan

The phenomenon referred to in the introduction to this article is not, in truth, anything new in our society. Poles’ incomes are rising too slowly to speak of some kind of revolution here. Even government social programs in the form of 500 + and 300 + did not “settle” the matter, because many people gave up real employment in favor of staying on the “pot” of the state budget. Even if someone decided to postpone additional funds for the future, it is still likely that they will soon be transferred to the implementation of large investments and even to finance the current (growing) needs of the household.

 

Credit or deposit?

Credit or deposit?

And here comes the crux of the described problem. What better to pay back your current investment – a loan that (let’s face it) costs, or a deposit for which you get residual capital? The answer is simple: credit, because this option is much more beneficial for us and – generally speaking – for the entire economy. Why?

The loan is broken down into many small installments. Of course, their incurring is burdened with quite high costs, but they are divided into many installments, which repayment time reaches even 5 years. In such a large time interval, the costs incurred due to the loan, balanced by capital gains, are indeed relatively small and will certainly not be burdensome for the household.

Owning capital is not a privilege but an obligation. Even paying your bills monthly is always a risk. It is precisely the capital that minimizes them, which can be used to pay liabilities, settle bills, and even to supply your household budget for several months.

Deposits and savings accounts are a safe capital for the future. You never know what economic or financial turmoil will affect us or our society. Of course, during the macro crisis, even big savings will not help, but – if it is not so bothersome – they will help you through difficult times.

 

Is it still worth saving?

save money

Many people might argue that maintaining your own savings is simply not profitable. The fact is that from an economic point of view this thesis turns out to be fully justified. The residual interest rate that balances on the inflation line will not bring us tangible profits on which we could actually get rich. In the economy, investments and savings are interrelated. If the latter lack, everyone – from the household to the global economy – will risk a lack of liquidity. From here, only a few steps to the global recession.

To sum up, cash loans are a much more profitable way of financing investments than funds from deposits. And this is obviously not about economics, but above all about common sense. In economics, money should not always rule. We have already seen this during previous economic crises. We all know their economic and social consequences.