Never look at monthly payments. Negotiate on the final price.

by modestmeans

 

This happens everywhere I go. Car dealership, “So what do you want your monthly payment to be?” Insurance agent, “Great so your downpayment is $XX and your quarterly payments are $XX” etc..

Um, I want to know what the final out the door price would be?

“Well tell me what you can afford and I’ll see if we can make this work for you. So how much are you looking to pay a month?”

Why is this bad? Because you cannot compare apples to apples with just a monthly payment. Sure they can make your monthly payment super low and just extend your term to forever so they make more money. Or for insurance purposes you cannot compare that policy vs another one.

Also you should know the true cost of the items you are buying. Sure those $150 airpods at 5 bucks a month on your credit card is easy to afford. But once you factor in that 22% interest rate over how long it takes to pay it off were they REALLY worth the $180+ you just paid?

I feel like majority of uninformed consumers should be considering the true cost of items vs they I can afford that monthly payment mindset. No wonder people live paycheck to paycheck thinking they cannot afford to have an emergency savings because all of their money is going towards those monthly payments.

Wait emergency savings? I don’t need that, I have available credit on my credit cards!

 

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