Tuesday, May 15, 2007

Summer car deals are right around the corner

With gas prices approaching $4/gallon and auto inventories creeping up, we are due to see the big auto incentives return this summer.

If you can avoid spending money on a car, please do so. Automobile expense is typically the second highest monthly expense for families, and it can even be #1 if you have two car payments! Automobiles are net-worth killers. If you have to buy a car, buy used - you will save thousands. But if you can continue to drive the car you already have, do it - the effect that saving (and investing) this money can have on your future portfolio is truly amazing.

Also, if you're able to pay cash for a car, that's fine. If you have to borrow, either get a great financing deal, or use your Home Equity Line of Credit (HELOC). Using HELOC money will make your interest tax deductible.

The Holy Grail of new car financing - 0% for 72 months - is coming back. It makes it super tempting to head to the car dealer, doesn't it?

A related article is posted at Yahoo Finance.

2 comments:

alex said...

I saw an interesting article, a while back, which basically stated that the gas savings of a hybrid would not be "worth" it over the cost savings of a non-hybrid. It would be interesting to know how that comparison looks now, based on ultra-high gas prices we have been seeing.

Q at $1 Million to My Name said...

Hybrid = you feel good about yourself.

Now, if you're out shopping for a Chevy Suburban and get a Prius instead, I'd say you're helping out the environment.

If you purchase a used hybrid, I'll bet the gas savings would outweigh the purchase of a new non-hybrid. But now you're comparing apples and oranges.

I say we all just follow Hollywood's lead and get hybrids. Just like they pull up to the Oscars in a hybrid after flying in on a gas-guzzling Gulfstream V, I know I can also set a good example by driving a Prius while everyone is watching me!