• Matt DeLong

Can you afford a $50,000 car making $200,000 a year?

Yes, that’s easy. Most people make the mistake of buying a brand new car.

There are 2 ~significant events in the life of a car that cause them to go down in value. 1) Drive a brand new car off the lot. 2) Go over 100k miles.

If you want the “lowest cost” (versus lowest payment) way to do this — I suggest your mom buy a 1-year old version of the $50k car used for ~$36k CASH. Then, sell it BEFORE she exceeds 100k miles for ~$16k. That is the smallest depreciation scenario. You have to think about the big picture beyond the monthly payment. Problem solved.

I’m sure someone will answer this question with “a lease payment is only $$…” and tout the benefits of a tax deduction, but it’s the equivalent of paying $4,000 a year, so you can get a $1,400 deduction, why would you do that? Can you not do the math? At the end of the lease, you have absolutely nothing to show for it — no trade in value — and if you are lucky — you get dinged if you go over your mileage allocations or the dealership claims you have more scratches than normal, then you have to pay more $$ just to get rid of the vehicle.

Trust me, I did a car lease ONCE and will NEVER again. It’s for people who can’t do math. Car salesmen get huge incentives to push that nonsense. Why would anyone fall for the “low monthly payment” trap? Huge mistake. Never again

You need to think big picture — lowest cost, not lowest payment.

172 views0 comments

Recent Posts

See All