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Ask Dave

Should I Buy Used?

Jackson has a great income and is deciding whether to fix the old car or a buy a new one.

QUESTION: Jackson makes $85,000 a year and is weighing fixing an old car vs. buying a new car. The old car has numerous things wrong with it. Dave says cash is key, not payments.

ANSWER:  You have a great income, and you could put $500 a month into an account instead of making a car payment. Do that for 10 months, then sell this $5,000 car that you have, and buy a $10,000 car. Car payments are the number one stealer of wealth, because it’s the largest thing we buy that goes down in value. You have to get in the mindset to avoid car payments forever in order to become wealthy.