I can't believe I read this this whole car buying discussion and commented that a $561 car payment for 69 months is crazy without sharing my story. I still think it is, but I'm feeling a bit like a hypocrite so here it is...What not to do when buying a car!! It's 2003, and I am 30 years old, recently divorced, and because of that really at a pretty low point in my life. I said I don't really care about cars, and really I don't. For reference my first car after graduating for college was a Ford Taurus. I mean what 22 year old buys a Ford Taurus..but anyway. For whatever reason, I really don't even remember, I see this Mitsubishi Eclipse Spyder and have to have it. I buy a new one around $28,000, 0% interest for 3 years, $796/month!! Mind you, I am working as a waitress at the time, probably earning about that in one year! But with my reasoning I could "afford" it because the very same week I bought a duplex. My house payment was $525 and my renters paid $500. So I bought a car for as much as my annual salary, with a payment around 60% greater than my house payment. CRAZY, CRAZY, STUPID!!! For sure the single biggest financial mistake I have ever made. Now, did I love that car? I did, I loved driving with the top down with the sun on my face, it was fun. BUT, what if I had instead invested that money? That one decision probably cost me 5 times what I paid for it.
But, we live and learn and can't undo the stupid mistakes we've made in the past. So I learned from it. We've recovered and we'll be fine. But had I done that a few more times the chances of being financially independent at any age would have been pretty slim. I think that is the danger of payments. You see that monthly number, without seeing that whole picture. If I had saved $796/month for 3 years, would I have written a check out for $28,000?