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When an Auto Loan is Unavoidable

My co-worker drives a VW Beetle, new style, and from her experience, she isn’t very happy with it. Constant maintenance combined with expensive foreign parts has given her a bit of a headache on multiple occasions. Now that the car is paid off and at 80k in miles, it once again needs work.

Her line of thinking is that the car is on its last legs anyway. Technically it still runs, there’s just a lot of little stuff that’s broken or on the verge of breaking, and so she figures why not just put that repair money into a new car instead. I think this is true, given that she’ll likely get more bang for her buck buying a new car. Unfortunately she can’t just go and buy a new car, she’ll have to take out a loan.

Now in most cases I’m against debt, that’s true, but there are times when you really have no choice. My student loan is an example of this, as it was my education or the loan, and my education proved to be a solid investment over the long term (though I’ve often debated the benefits with my older brother, also a college graduate). My co-worker needs transportation, and will drive her car into the ground, but it’s going to conk out sooner or later. My advice to her was do her homework and get the most favorable terms possible. It’s a big purchase, and how much you pay initially as well as how much interest they’ll tack on are both vital components in the decision making process. An auto loan isn’t the worst kind of debt to have, and as long as she pays it off diligently I don’t foresee it having a significant impact on her financial future. So I’m sure she’ll be snooping around looking for the best rates and deals for her (admittedly more compact) next car. Bad Credit Auto Loans are an option as well, if that’s necessary.

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