The “Lost Decade”

Ah yes the “lost decade”. Do you know what that is?

Its when you’re young and dumb so you march your happy ass into the Ford dealership with no money and buy that $29k overpriced 4 cylinder Mustang convertible. You walk out of there with a $575 payment, $160 insurance and think the world is yours for the taking. The salesman hustled you.

Two years later after experiencing your first taste of payment slavery and realizing the costs of this car is eating you alive, you get sick of it and go back to that SAME dealership trying to get into something less expensive.

The problem? N.e.g.a.t.i.v.e. E.q.u.i.t.y. They’ve got you.

This is when your eyes are opened to the stupid rate of depreciation cars have. Now that $29k car is worth $18k forcing you to be $11k “upside down” in your loan. (don’t act like you haven’t done this folks!). So what do you do?

You trade in that Mustang regardless and for a 5 year old used Ford Explorer with a sticker price of $15,999. What you overlook is that the dealership rolled over that $11k in negative equity onto your $15,999 5 year old Ford Explorer and elongated your term to 72 months.

You’re now paying $425 per month for your Explorer (which is less than the Mustang) and you believe you’ve gotten over on the dealership.

The problem? Not only are you carrying negative equity to the tune of $11k, you’re driving a 5 year old american SUV gas guzzler.

3 years pass by and you can no longer afford to fix this now 8 year old SUV. For the last 5 years, you’ve applied the same financial logic to other decisions in your life and you’re broke. Plus gas is ridiculous. You default and do a voluntary repo.

The problem? You still need a car and your credit report is shot.

And now for the death nail. You walk into a local dealership that promises to sell anyone a car regardless of their credit. Your interest rate? 22%. Loan term? 60 months. Car make? 2002 toyota corolla. Your car payment?

$575/month.

 

 

(Find out how to buy a car without credit here.)