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This Element is an excerpt from Easy Money: How to Simplify Your Finances and Get What You Want Out of Life (9780132383837), by Liz Pulliam Weston. Available in print and digital formats.
The auto buying trap: Why it’s even more dangerous than you realize!
What’s the big deal about being upside down on a car? If it’s totaled or stolen, the payment from your insurance company typically won’t be enough to pay off your loan. Second, you won’t be able to afford the payments, but you won’t be able to get rid of the car. You must make the payments and insure it. Selling it to buy something cheaper may not be possible. You’re stuck.