Thursday, April 7, 2011

Right Side Up & Upside Down

My dad always told me, "don't be upside down on your car." Honestly, I never knew what it meant. My guess is that a lot of people are like me.

What does it mean to be upside down?? Well, literally, it makes me think of Six Flags rides: hanging upside down feeling like your eyes might pop out. But in the car world, it means an ENTIRELY different thing. Being upside down is
owing more on your car than it's worth.

Once you purchase a car, the value depreciates with you being either the first or second owner. It is not worth as much to the next person. Also putting miles on your car lowers it price. But, listen, if we spent our lives trying not to put miles on a car, it'd be pretty lame. Drive your car! It is what its there for.

This does NOT apply to you if:
  • you paid cash for your car and did not get involved in a loan
  • you have already paid off your car
  • if you HAVE the title to your car
What your car is worth is determined by a number of things. Ready?
  • outside look (dents, scratches, do you have all of your hubcaps?, are you driving on a donut? hail damage, cracked windows, etc)
  • interior (stains, scratches, poked holes in ceiling, trash, etc)
  • MILEAGE: this is probably the biggest one. If you have had your car for 2 years and have run it into the ground, even though it's "new" in time, it will be worth half of what you paid for it
  • maintenance: try to present as much info as possible, past oil changes, any repairs on the car, tire bills, etc. if your car has a check engine light on, consider getting it repaired.
**please note: many of these things are fixable. You can help the price of your car with a little elbow grease and a little sweat equity! What you CAN do:
  • put a large down payment on your car
  • keep a short loan term (36 months! this will ensure you pay off your car quickly)
  • pay more on your car each month (personal story: Bought a HYUNDAI SONATA summer of 2009, got a 60 month term and am about to finish paying it off this summer, because my payment was $150.32/month and I have been paying anywhere from $200-$550 on it a month - Woohoo!!)
  • Read this article from - it will help you better understand the ins and outs of finances.
  • Purchase a Hyundai, our cars are not as expensive as other leading brands. Luxury wrapped in value is what some have said.

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