Reinke Faces Life

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buy a new car

QUESTION

Asked by “Chris L”

What is your answer?

Question

Should i buy a new car?

I have a 2004 model that went out of Bumper to bumper waranty last week. I am ahead on it about $2000. I work for a company that is contracted by an auto manufactorer and can get a discount. My car is not luxurious it’s a point a to point b and ocasionally point c kind of car. My current debt is the car and a credit card that has about 3500.00 on it. My payments are $209.00 I would like to stay in this range (which doesn’t leave much room for moving up). I worry about out of warranty repairs. the veh came with a 5/100 powertrain, and i have 1.5 years left on my loan. would it be worth it to trade and get a new vehicle?

ANSWER

Dear “Chris L”:

Well a “point a, b, c” car sounds better than some of the wrecks I drove in my youth. I had a old caddie I loved. But it used more water than gas. (Leaky cooling system. No money to fix it.) I used to travel with 10 gallons of water in the trunk. :-) Hopefully your is better than that.

Just to recap the question, you’ve a working car that’s out of warranty, have a loan with 18 months to go, but has some trade in value. You got debt but no savings. Did I get it right?

First, depending upon where you got your car loan from, you have sunken cost in your interest expense. You may not realize it but the car dealers use the “Rule of 72” for interest. It means that you pay interest in the front of the loan. Credit Unions use a more honest method. So when you refinance, you won’t get an interest refund or interest saving.

Second, you really need to have an emergency fund. You should be putting as much as you can into that fund as quick as you can. Depending upon many factors, you need between from 3 to 12 months of “burn rate” available. That can serve as your own “warranty fund”. 2004 isn’t that old. You didn’t talk about mileage. But you should be able to get 6 years and or 80k miles before you have major risks. So, I think you’re more in need of a emergency fund than a car.

Third, cars depreciate badly. Your biggest single expense is that! So, a new, or used, car is most expensive when you first get it. If you have your e-fund and a surplus, it might make sense to avoid the risk of a car repair. When you don’t, it seems like your worrying about the wrong things.

On my blog, I’ve talked about using a six year plan for car acquisitions. Finance for three years; pay for six. First three to the credit union; Second three to your savings. That’s what got me off the car treadmill. Adjust for usage. You need to make sure it doesn’t wear out before you’ve paid for it.

Get to a credit union for savings and loans. They’re “honest” (upfront about the terms) and will give you free advice you can depend upon.

Take a peek at Dave Ramsey and Suzzie Orman for the budgeting, savings, and emotions about money. They’re much better than I could ever be.

Hope this helps. I’m interested how it works out for you. Drop me a note sometime. My blog may have helpful “stuff”.

Ferdinand J. Reinke
Kendall Park, NJ 08824

SOURCE

http://www.creditunion.coop/
http://www.suzeorman.com/
http://www.daveramsey.com/
http://www.ftc.gov/
https://reinkefaceslife.com/2007/05/16/yahoo-answer-credit-unions-good-for-car-loans-not-good-great/
http://www.reinkefaceslife.com/…

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UPDATE: Selected best by the asker. (The best kind!)

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Asker’s Rating: star star star star star

Though the second answer was very good, this one went above and beyond, and met my expectations. i do want to make a plan to get my debt gone as soon as possible and i think that having reliable transporation that i am am paying for but have almost paid off will be my best bet.

Thanks

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QUESTION

AmyB askes:

Why does it seem every new law seems to be taking away our rights and freedoms? Is this just in Maryland?

I just heard on the news the police have a new device that can see in the dark if a seatbelt is being worn and another new device that will ticket if following too close to another vehicle.(It measures the distance.) The police should be stopping violent crimes etc. Not sitting on the side of the road to ticket for a seatbelt. What next. We are already are on camera. The gov’t will know all one day.

ANSWER

Dear Ms. “Amy B”:

No, it’s not just Maryland! It’s the entire world, minus New Hampshire and certain revolutionary areas like Estonia, Poland, Hong Kong, and such.

“The slow loss of freedom was always justified in the name of keeping the people safe.”

When you look at the great genocides in history, you’ll always find that the was a government involved. Government, if it was a virus, would be classified as a “pandemic”. Humans are frail little creatures that survive by being able to think. We huddle together, organize, and prosper via a division of labor. One of the divisions of that labor seems to have been “leader”. Unfortunately, the minute some one becomes the “leader” they begin to feather their own nest.

A paradigm is consultant speak for a way of thinking. How you see things. We’ve all seen the optical illusions that require us to change our thinking to see the other side of the illusion. A meme, like gene is our DNA, is internet jargon for an idea that spreads like a virus. Government is a paradigm or meme that imposes on us by force. Because it has the trappings of legitimacy, humans defer to it either because of its power or because of their thinking.

Government grows itself.

Inexorably, like the blob in the science fiction movie, it “absorbs” things into itself. It uses a variety of excuses. “We’ll keep you safe” delivers us Homeland Security which is the prototype of the German SS where are your papers. “We can do it right!” leads to government garbage collectors. “We can do it fairly for everyone” leads to government education that dumbs down the future voters to stupid followers. It splits and creates more ways to “serve” you. You have 535 legislators, minus Ron Paul, in DC that are as busy as termites legislating away your freedom.

“The final tyranny was the end result of a slow loss of freedom.”

I had the unique opportunity to grow up around a family some of whom survived what they called the Shoah and we called the Holocaust. They described that every small step they could see the loss of freedom. Until, the last step was their being loaded onto the trains. The Father dispatched his children early to relatives. His wife took a “vacation” and never looked back. He walked to Switzerland where his childhood friend took him in and sent him to America as Swiss business lawyer. Otherwise, the USA would have sent him back to Germany. From him, I learned that any loss of freedom anywhere must be opposed vigorously. You can’t wait until they are loading you on a train. Every slight move in the wrong direction must be treated as if it was “being loaded on the train”.

How do we stop the trend?

One can move from Maryland, which like NY, CA, FL, and DC, is firmly locked into the Socialist Statist Big Gooferment paradigm. Liberty minded people are migrating lock, stock, and barrel to New Hampshire under the banner of the Free State Project. There’s no agenda other that “liberty and freedom”. Upon “landing”, the activists are organizing themselves “organically” without “leadership” in the things they see need doing. It’s a fascinating concept. If you don’t have “anchors” in Maryland, I’d urge you to consider it.

If you like me and tied down by family, a job, and “responsibility”, then you can “fight in place”. Like McAulife’s order at the Battle of the Bulge or Stalin’s order at Stalingrad, stop where you are and resist to the last. I like DONWSIZEDC. They are seeking to build a grass roots internet based activist base for small government. If we have to have one (and I’m not so sure we do), then a tiny one would be less oppressive than a big one.

I think you can support Ron Paul, the only true anti-war candidate. And, be vocal. Get a blog. Talk to your family, fiends, and neighbors.

The most effective weapon is laughter. The bozos in power, like the man behind the curtain in the Wizard of Oz, can’t afford to be laughed at. It makes people not take government seriously. I use as an example, the tax on cell phones and telephone service. So wag started calling it the Spanish American War Tax. That meme caught on and I heard it called that on the Main Stream Media (i.e., I heard it on NBC). Several people told me. (Like I didn’t know that!) Everyone was chuckling over it and starting to get steamed about it. The Congress Critters and the FCC was falling all over each other to get rid of it. When was the last time you heard a tax being repealed? It was the laughter that threatened to undermine their cloak of legitimacy.

So make a joke out of it. Get your FF&N laughing at them!

How about “I hear the State Police has a nighttime seat belt checker, wonder if it can be moded to check all the politicans’ zippers? They seem to need it more than we need our belts checked.”

Make up your own. And, pass them along to me. Here in NuJerzee we have the imperial guvanator that says “seat belts are for serfs”! ;-) Speed limits too.

Let me know how you make out starting your own one-person American Revolution.
fjohn

Sources

http://www.freetalklive.com/
http://www.downsizedc.org/index.shtml
http://www.bigbendgazette.com/blog/Archive/Author/Briggs/_archives/2006/12/18/2582338.html
http://www.issues-views.com/index.php/sect/25000/article/25082
http://www.liberator.net/articles/firstamend.html
http://freestateproject.org/

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Update 2007June17 Just notified awarded a “best by asker”. Basking in success. Resting on laurels. … nuff resting. Time to make another answer. Waz fun while it lasted.

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