Trapped in Auto debt?

by Joe on November 19, 2009

After writing about my old clunker yesterday, I spoke to some people about the transmission job on my old clunker; the people I spoke with stated that they would not have the patience to wait a week for a fifteen years old car’s transmission change. But again, most of them said literally that they hate car notes; putting them between the need for a good car and the monthly car expense they hate..

Howard Dayton in his book “Your money counts” offers some insights to escape the auto trap debt that most people have found themselves in.

  • Decide in advance to keep your car for at least six years- based on the fact that an average car lasts 10 years.
  • Pay off your automobile loan as fast as any other debt that you want to clear.
  • Continue paying off your automobile monthly payment but this time into your savings account. This way, when you get ready to replace your car or it breaks down and the cost of replacing fixing is more than the car’s value, the saved cash plus the trade in (hopefully the latter do not happen) should be sufficient to buy you a nice low-mileage car without putting yourself in debt.

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