zzdcar
Home
/
Reviews
/
Buying
/
This Has To Be Some Of The Most Unhelpful Car Financing Advice Ever
This Has To Be Some Of The Most Unhelpful Car Financing Advice Ever-July 2024
2024-02-19 EST 22:09:26

Image for article titled This Has To Be Some Of The Most Unhelpful Car Financing Advice Ever

After New Year’s, many folks reflect on how they can better their financial situation in the next twelve months. Naturally, a number of popular outlets will try to get your clicks by giving some helpful advice. Unfortunately, on how to pay your car off in a year totally misses the mark.

The article provides some guidance on “How To Pay Off Your Car Loan In 12 Months,” yet it fails to articulate exactly why this would be beneficial to do so, other than having the freedom of no car payment. What follows is a smattering of some sound car financing strategies that are ultimately burdened with what amounts to fairly unhelpful advice to the target audience.

The author starts with “Buy Less Car Than You Can Afford.” And he is right, more people would benefit by focusing on what they need rather than what they want, and buyers would be less likely to be stretching their wallets when it comes to monthly payments. However, the article takes that to the extreme by suggesting that instead of spending the average new car price of $42,258 to look at dramatically cheaper options

“Three cars — the Chevy Spark, Mitsubishi Mirage and Nissan Versa — all come with sub-$15,000 MSRPs. If you require a little more oomph than bare-bones, entry-level subcompacts can offer, there are dozens of other, better vehicles still well inside of $20,000. Start there.”

To realistically expect someone targeting a $40,000 car, likely some kind of crossover or SUV, to all of the sudden go for a Nissan Versa is wildly naive. First of all, these sub-compacts are not ideal for moving more than two people and in this current market even finding

Vehicle choice aside, the author continues to make a good point of applying a downpayment of at least twenty percent of the purchase price to establish equity and reduce your loan balance. However, the approach here is to use that downpayment on an affordable car with only a one year loan making the car payments look like mortgage payments -

If you put zero down on an $18,000 car at 3.11% interest for one year, you’d make 12 monthly payments of $1,525If you put 10% down ($1,800), your monthly payments would be $1,373If you put 20% down ($3,600), your monthly payments would be $1,220

Let’s be real for a moment, anyone that can handle car payments of $1200 or more isn’t coming to yahoo! finance for budgeting advice, and those that really need help managing their finances will find that spending that amount on a car note incredibly burdensome.

To put the last two tips into a different perspective, this is like saying to someone who wants to lose some weight - “Reduce your daily calories by half then go to the most expensive grocery store and spend triple on your food costs.”

Paying off your car loan in one year at the expense of cash flow is just not feasible for most and probably foolish for those who can. If you have a manageable monthly payment with a competitive interest rate, you are far better off paying down other debts with that extra cash or investing it into something that will get you a return.

(Tom McParland is a contributing writer for Jalopnik and runs AutomatchConsulting.com. He takes the hassle out of buying or leasing a car. Got a car buying question? Send it to [email protected])

Comments
Welcome to zzdcar comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Buying
The Original Mazda RX-7 Drives Like a Humming, Thrumming, Living Animal
The Original Mazda RX-7 Drives Like a Humming, Thrumming, Living Animal
Currently, nobody on the market sells cars that run with the magical triangles of a rotary engine—the kind of engine you’d find in a 1980 . Really nobody else besides Mazda was ever able to get it to work in a meaningful way. I totally get it, too; by design,...
Jul 16, 2025
The Ford Mustang Is Eating the Chevy Camaro's Lunch
The Ford Mustang Is Eating the Chevy Camaro's Lunch
The has fallen from glory. After a five year reign over its U.S. sports car kingdom, the Camaro has been quickly usurped by the Ford Mustang—and then by the aging Dodge Challenger. Sales are , and it doesn’t look like there’s going to be change in the near future. Things...
Jul 16, 2025
At $7,650, Is This 1984 VW GTI a Hot Hatch or a Hot Mess?
At $7,650, Is This 1984 VW GTI a Hot Hatch or a Hot Mess?
The ‘Hot Hatch’ is an iconic car type, and there’s perhaps no more so than VW’s Golf-based offering represented by today’s GTI. Will its price however, leave you cool? Convertibles offer a world of tradeoffs. On one hand you get a unique, wind in your hair (or over your bald...
Jul 16, 2025
Why Is My Car Insurance So High On My Electric Car? 
Why Is My Car Insurance So High On My Electric Car? 
As Jalopnik’s resident car buying expert and professional car shopper, I get emails. Lots of emails. Sometimes folks get into a tough spot or don’t know what to do, so I’ve decided to pick a few questions and try to help out. Let’s see what we have on deck for...
Jul 16, 2025
These Are the Most Common Lies a Dealership Will Tell You
These Are the Most Common Lies a Dealership Will Tell You
Now that summer is coming to a close and last year’s models have begun shuffling off of dealer lots, a lot of folks are entering the car market hoping to score a deal. While the internet has made car buying easier, there are still some dealers that will say whatever...
Jul 16, 2025
At $4,700, Might This 2007 Nissan Sentra SE-R Spec V Be a Spectacular Buy?
At $4,700, Might This 2007 Nissan Sentra SE-R Spec V Be a Spectacular Buy?
How many ponies would you trust your car’s front wheels to handle? Today’s Sentra sends 200 horses stampeding their way. Let’s see if this rowdy sedan’s price makes all that horsing around worth it. Last Friday I invited you to all to posit your opinion as to just exactly what...
Jul 16, 2025
Copyright 2023-2025 - www.zzdcar.com All Rights Reserved