Last year my wife was interested in getting a new car because we had a baby on the way and we needed something bigger for our growing family. We found a nice used one that we really liked that was just under what we had saved up to budget for this new vehicle. We decided to finance though because we wanted to keep a little extra in the bank for emergencies and baby expenses rather than pay for the van with cash. We signed the paperwork at the dealership and went home, but as soon as we looked over the paperwork more carefully at home we realized that we had agreed to pay a $2200 financing fee in addition to the interest. We tried to see if we could cancel the contract, but unfortunately a contract is a contract so we were out of luck. We paid off the car immediately and then had to work to pay off the finding fee, but from now one we’ll be reading the fine print more carefully.
– Submitted by: John F.
Two very important lessons here.
1. Always read the fine print
2. If you have the cash to pay off something, there’s really not much point in financing, at least not the whole amount. My personal opinion is to not buy anything on credit anymore unless I have the cash and pay it off immediately. Not to pay it off gradually because I don’t want to spend the cash I saved up for the purchase. If the money is there with a purpose, then use it for that purpose and save yourself the headache of little mishaps like this.
Amount Flushed Down the Money Drain: $2200