I saw a commercial from the folks at Hyundai advertising a deal where you can return your car if you’re facing financial hardship. According to their website, if you buy or lease a new Hyundai and lose your income or license, become physically disabled, die, or a few other things,you can give your car back to the dealership and they’ll pay up to $7,500 in negative equity (you’ll pay the difference). It only counts for the first year of having your car.
They’re acknowledging that with your purchase of a new car, you’ll likely have negative equity in it right away. If you were to try to privately sell your car in that first year, you probably wouldn’t get enough money for it to repay your loan. If your car has depreciated more than $7,500, you’d be responsible for the difference.
And, they’re acknowledging that if you lose your income, having a car payment is going to make your life a lot more difficult. It’s easier to not have a car payment during those times.
But, if you lost your job and had to return your car, then you’ll be jobless and without personal transportation. That might make getting a new job that much harder.
Instead of buying a brand-new car and not being certain you’d be able to pay for it, why not buy a cheaper car? Not everyone can pay cash for a car — even a $1,000 model. But, taking out a loan for just a few thousand dollars is going to be much easier to quickly repay than borrowing $20k for a car.
P.S., I really intended to blog more this week! I’ve just been so wiped out with my baby lately, that all we do is eat and sleep. Thanks for subscribing to my blog to see when I do update, and thanks for your patience!