The overall analysis on my Car Project is simple. The loan amounts need to coincide with the monthly
Amount so I will be able to afford it.
When I was doing the Car Project, I wanted to see what the differences would be if I listed 4 different car loan amounts, with 3 different APR’s. Now with that in mind, some were close in the payout, and some were like “OH MY LORD”, I am not paying that amount ever!
I love how this had such a dynamic impact on my overall car shopping in the future. I will always try to achieve the lesser in APR rates, and years on the loan I take out.
On the 1st spread sheet, that starts off with $7,200.00 car loan amount, @ 7yrs., at a 2.9% APR. I notice this loan amount made it more beneficial to me in my budget. The other loan amount I would agree to on the 2nd spread sheet was the $16,990.00, with an APR of 1.9% for 6 yrs. Now, that seems very reasonable the payment, but overall it would benefit me in the long run. My experience when doing this project, showed me just how tricky the APR’s can get and how they benefit people when it comes to purchasing a vehicle. But, lots of us won’t always get the best interest rates, unless we have a credit score of 720+. It all is relative around the credit score!! Anyone having to pay the rate of 8.0% and above is extremely crazy!! I will always make sure if the rate is not low, it isn’t worth my pocket book!!
Just a note:
Benefits of Buying when buying a car, once you pay your loan off, the car is yours. This means you can do whatever you want to it and modify it as you see fit, and the only real penalty is a reduced resale value. When buying a car, you always have the option of selling it should you grow tired of it, and conversely, should you truly fall in love with your car, you can keep it as long as you'd like.
Benefits of Leasing
Compared to buying a car, a lease can result in lower monthly payments, as well as a lower down payment requirement, or sometimes none at all. Because of this lower monthly payment, you can often afford to lease a far more expensive car than you would be able to purchase, and because lease terms tend to only last two to three years, a new vehicle that is leased is almost always covered by the manufacturer's warranty. For those who tend not to get attached to their vehicles, a lease is perhaps the perfect arrangement; you get to drive a new car for the best years of its life and then when the lease is up, you can move on to another car without having to worry about trade-ins or selling your car. For those interested in buying, a lease purchase deal can give you the option to purchase the car for a reduced price at the end of the…