BIZ blog: Car buying 101If you're financing a new car for five years, you can't afford it.
Business, consumer and economic tidbits from DNT reporter Candace Renalls. Click here to view previous posts or additional resources.
BIZ blog: Car buying 101
Personal finance expert Suze Orman notes that buying a car is among our biggest ticket items, ranked third after a home purchase and student loans.
(We knew that)
She's down on buying new. Drive a new car off the lot and a $30,000 car depreciates 20 to 30 percent to $21,000.
Cars aren't like real estate, she said on last week's segment of the Suze Orman Show on CNBC. The value of cars never goes up. Still, if you're intent on buying new and are financing she offered this rule of thumb:
Finance for no more than three years. If you have to finance for four or five years, you can't afford the car.
(Didn't know that)
"You need to keep it as long as you possibly can, until that car literally is breaking down," she said.
Otherwise, you're pouring more and more money into a depreciating asset, she said.