Cars and debt

Most financial problems are related to mismanagement of income and Incorrect financial decisions. Lot of people tend to buy cars with $300/m payments for 5 yr they but don't opt to buy a fully paid $10000.00.

Buying car with debt is not a good choice in most cases. Paying double digit interest is scary stuff while dealing with depreciating asset.

Listening to Dave Ramsey's podcasts, most of people go for cars that are too expensive relative to their income. It is often a good idea to drive a $1000 car, save up money to buy a car and then buy it. New cars require more maintainance, extra insurance and they depreciate faster (percentage wise).

It is always great to have fewer monthly payments and excellent to have no payments.

Tips to deal wiht Car while cleaning up debt:

1. Find out total cost of the car per month (payment +insurance+ gas + average maint cost )

2. Can a fully paid cheaper car solve the problem? If so, sell the car even at a loss and opt for cheaper car.

3. drive the cheaper car for 6 months or a year and save up for fully paid car.

4. use all the car savings to pay off the debt.

hope this helps.