I remember the first time I thought I could afford to buy a car. For a long time, I dreamt about owning a Jeep Wrangler and taking it off-roading in the deserts of the Southwest. It was literally the car of my dreams and I was going to take it on many adventures.
Early Car Problems
When I submitted the paperwork for the credit check at the dealership, I was a little nervous because I knew that my credit score was not going to be the best. Sure enough, they came back and told me that since my bad credit placed me in the bottom tier of their credit worthiness scale, my APR would be close to 16 percent. My monthly payment would have been in excess of 500 dollars a month.
I Needed To Go With Plan B
My dad came to the rescue and co-signed. With his awesome credit, the APR got dropped down to 6 percent and my monthly payment was reduced to around 400 dollars. Because of someone’s good credit, I was going to be saving 100 dollars a month for the entire length of the car loan.
100 dollars multiplied by 60 months is 6000 dollars. Essentially, I saved 6000 dollars because of good credit.
Wear and Tear
Over the course of our lifetime, the wear and tear of bad credit can cost us TENS of thousands of hard earned dollars. According to the Department of Motor Vehicles, the average sedan lasts barely over sixteen years. That means based on the average lifespan of an American and assuming you get your first brand new car at 16, you would still go through about four different cars.
Damages
If you were to buy four new cars over your life and pay for them all while having bad credit, it is easy to see that you could be overpaying by as much as 24,000 dollars over your lifespan. Imagine that. That is more money than all these people will make in an entire year.
Being In the Driver’s Seat
Conversely, if you have good credit and had to buy four new cars over your existence, then that means that you SAVE 24,000 dollars over the course of your life. That sum is an entire year’s pay for some people. This is a prime example of how good credit can actually help you save money.
Once you start on the journey to better credit, it literally pays to stay on course until you find yourself at the end because sometimes that can be just the beginning of something great.
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