Buying A Car
As a teen it’s more difficult to buy a car, since we don’t have an established credit history and will have difficulty finding someone to lend us the money without a credit history (see Credit History & Credit Score (FICO). If you’re paying for the car, or part of it, be realistic about where you will get the money each month and how much you really can afford. Once you come up with a figure, save an additional 10-15% for inflation, increases in gas or car insurance and unexpected events. Worse comes to worst, you will have extra money available to spend, or pay off the car early.
Basic Car Buying Rule
If you can’t afford to put down at least 20% on the car, you’ll probably end up owing more on it than it’s worth. If you can’t afford to put down 20%, DON’T BUY IT! If you can’t pay off the car in 48 months, DON’T BUY IT! Instead, buy a less expensive vehicle that you CAN afford. Remember—the purchase of the car is only the beginning of your expense items.
