Dave Says: Hefty Car Interest Payment

Dear Dave,

I recently bought a new car and financed it at 17.9 percent for 72 months. I did this hoping it would help improve my bad credit. The payments are $468 a month. That means I’ll end up paying about $13,000 in interest alone. Is there a way I can avoid paying all this interest?

– Marcus

Dear Marcus,

Yes, there is a way, but you won’t like it. Sell the stinking car!

If your credit is bad, it’s because you haven’t paid your bills, or you haven’t paid them on time. I’ve got a feeling a lot of this can be traced back to the fact that you’ve been buying a bunch of stuff you can’t afford, like a new car with $468 a month payments. What a bad plan!

You’d have more than $5,000 in less than a year if you take those car payments and save them. That kind of money will get you a great little-used vehicle, and best of all, a car like that won’t be a drain on your income for the next six years!

– Dave