{"id":174121,"date":"2014-07-10T04:00:40","date_gmt":"2014-07-10T11:00:40","guid":{"rendered":"http:\/\/getrichslowly.org\/blog\/?p=174121"},"modified":"2019-10-29T01:16:18","modified_gmt":"2019-10-29T08:16:18","slug":"car-payments-til-death-do-us-part","status":"publish","type":"post","link":"https:\/\/www.getrichslowly.org\/car-payments-til-death-do-us-part\/","title":{"rendered":"Car payments: ‘Til death do us part"},"content":{"rendered":"

Your car breaks down on the side of the road \u2026 again. It’s rush hour and it won’t start. You have to have it towed and you’re not happy about it. At all.<\/em><\/p>\n

So what do you do?<\/p>\n

You head to the local dealership in a fury, ready to replace it with something far more reliable, but also affordable. But the dealership has a few tricks up their sleeve and, according to Paul (the salesman helping you), it must be your lucky day<\/em>. Amazingly, your car died at the most opportune time in history.<\/p>\n

“Amazing deals are on the table for today only, folks, and we are in the midst of a complete liquidation<\/em>,” says Paul. “Prices are being slashed left and right, and you need to act fast.”<\/p>\n

“This is the sale of the century!!!”<\/p>\n

So you bite, and before you know it you’re standing in front of a shiny, new sedan covered with stickers exclaiming things like “0 PERCENT INTEREST” and “$2,500 CASH BACK.”<\/p>\n

You slide into the plastic-covered seat and breathe in that indescribable new car smell. You play with the knobs and the radio, and you notice how little squares of plastic have been methodically placed to shelter the dashboard from the germs and fingerprints of anyone who dare touch this car. The flawless upholstery is still largely untouched, never having been exposed to the rain, the sludge of winter, or your toddler’s leaky sippy cup. You like it<\/em>.<\/p>\n

“Pick your payment and I’ll make it work,” says Paul.<\/p>\n

And the rest is history.<\/p>\n

<\/span>The High Cost of a Low Monthly Payment<\/span><\/h2>\n

This kind of scenario happens every day of the year and all over the country. It happened to me when I was 22 years old. At the time, I had a job making something like $8 an hour but had just gotten my residential real estate license. I headed to the dealership, convinced that I needed a newer car to drive around all of the clients I would surely have. (Feel free to laugh.)<\/em> Soon I was talking to a shark of a salesman — a nice guy — who used buzz words like “elegant,” “sophisticated,” and “successful” to describe how I could look in something new. And I bought it all hook, line, and sinker.<\/em><\/p>\n

Even though I went to the dealership with something much more modest in mind, I pulled out of there with a brand new Mitsubishi Galant, a $24,000 loan, and a monthly payment somewhere close to $500. Even worse, I quickly found out that I was a terrible saleswoman<\/strong> and never sold a thing.<\/p>\n

But I still had that payment.<\/p>\n

<\/span>Car Payments: ‘Til Death Do Us Part<\/span><\/h2>\n

And I’m not the only one. A recent study from Experian shows that Americans continue to spend lavishly on new cars, despite the fact that wages have mostly stagnated and the median household income continues to hover at around $51,000 per year<\/a>. A few of the key findings from Experian’s report:<\/p>\n