Automobile Purchase & Financing : Evaluating Your Options
It is important to carefully think about the amount that you can truly afford and justify investing in your new automobile. Your total cost of owning a vehicle can vary greatly depending upon the choices you make -choices such as whether to buy a brand new vehicle or a used car, to buy a luxury car, a sports utility vehicle, or a family van. Your total cost also greatly depends upon how you plan on paying for your new ride - your least expensive option may be to make the full payment in cash, or to pay a major part of the total price in cash and the rest using a low interest line of credit that you may already have pre-qualified for. Often the most expensive financing option involves a high interest financing (low monthly payments, stretched over a longer term) arranged by an auto dealership, or a dealer financed private financing arrangement. Often there are huge "one time" add-on charges that are added to the final invoice after the buyer has indicated his desire to buy a vehicle -charges such as destination charges, loan initiation fees, extended warranty coverage charges, and loan insurance charges.

Automobile Purchase - An Investment Decision With Long Term Consequences
Buying an automobile is a major purchase decision that could have financial consequences for years to come. Therefore, it is important to think about the total amount that you can reasonably afford to spend on your new vehicle, the best financing options available, and explore the possibility of leasing a vehicle in stead of an outright purchase.

How Much Can You Safely Spend On Your New Car?
Even though the specific answer to this question largely depends upon your budget, your current and long-term cash-flow requirements, and your "take home" (spendable) income, the best way to examine this question is not to simply look at it from the monthly payment point of view, but from the total cost of ownership (the all-inclusive purchase price) for a given vehicle. It is not uncommon for auto dealers to make a potential buyer believe he can afford an expensive car (or a set of add-on options) by offering a low monthly payment stretched over a very long term often involving a high interest rate. So it is important to look at total cost of ownership, break it down over the years the vehicle will be financed for and then compare it to your actual take-home income during those years. Of course, you also need to take in consideration any other expenses that you may possibly incur during those years (down payment for your first home, a balloon payment for a real estate that you may already own, college tuition fees, or a home-improvement that may soon be needed, etc.) and make an informed decision.

Automobile Debt -One of the Largest Consumer Debts
Auto purchase is a big ticket item that often involves financing that spans well over five to seven years. Automobile debt is one of the largest consumer debts in America. With those incredibly enticing buy now and pay later promotional ads for automobiles featuring really cool looking cars and attention grabbing models, it is not surprising that many people wind up buying a car or a truck that is often way out of their actual financial resources. Many forget that unlike other forms of investment that usually appreciate in value over time, value of an automobile almost always depreciates over time -except for some of those antiques and limited edition specially vintage cars. Therefore, when you are thinking of investing in a shiny new automobile with all the new gadgets, the question to ask is would you be better off making a down payment for a home that will appreciate in value, or buying this top of the line new ride that will depreciate every day on its way to its final resting place in an automobile junk yard.