Sell The Car But Don't Get A Fleece
Ashley and her husband are saving their down payment for a home. Ashley's car is paid for and worth about $20,000. Should they sell the car and use the money for their down payment?
QUESTION: Ashley in Los Angeles and her husband are saving their down payment for a home. They have no debt, and his car is furnished by his job. Ashley’s car is paid for and worth about $20,000. Should they sell the car and use the money for their down payment?
ANSWER: No, I would not lease a car. I would ride a bicycle before I leased a car. It’s the most expensive way to operate a vehicle according to Consumer Reports, Smart Money magazine, and my calculator. I would never fleece a car. That’s what we call it. But I would sell your car and buy a $3,000 car, and you could use that for a down payment. Don’t be renting a car. You’re going back into debt. A car lease is just another way of getting a car payment. Don’t go back into debt in order to buy a house. You’re going backward then. But if you’re willing to move down substantially in car and free up $15,000 or $20,000 or something to do a down payment and you drive a lesser car in order to get into a house, I think that’s a smart move, because I’d rather have a house than a car. You were thinking you were going to have a nice car and lease it. I don’t want you to have your cake and eat it too. I don’t think that’s going to end up being good. You’re going to end up in a problem there. I would sell the car, though. I think your idea of moving toward the house is a good idea. I just would do the car part a little differently.