Even More Money Mistakes: Buying Expensive Stuff That Depreciates

BOSTON (CBS) – A depreciating asset is one that loses values as soon as it leaves the showroom.

Buying new cars. This was a well debated subject at my workshop. According the Experian’s Automotive Finance Market quarterly report, the average auto loan is 69 months and the payment is over $500 a month. And a third of the borrowers opted for loans lasting 7 or 8 years. And about 1/3 of consumers choose leasing over buying.

Transportation for many of us represents a large chunk of our budget. The car payment, insurance, maintenance and gas add up very quickly. Folks told me they were guilty of buying too much car. If they extended the car loan out another 12 or 24 months they could get the bigger SUV.

Buying a used car was the advice I heard. And with so many cars being leased the used car market is healthy. Once you pay off your car and if you still have it, continue to make those car payments but now into a savings account so you can use the dollars as a down payment on your next car.

I truly believe if a car is well maintained it could last 200,000 miles. Mine have!

The next thing folks mentioned was the home gym. You decide you need to get fit and you don’t want a gym membership. So, you buy some expensive equipment. Could just be a treadmill or you go for the whole enchilada, the home gym.

A new treadmill can cost between $200 to $4,000 or more. I got on Craig’s List found one for free and the rest all reasonably priced. A couple of the ads said like new!

Home gyms can be very costly. A dedicated room with lots of equipment. Or just a corner of the basement. And if you do have a dedicated room it does not enhance the resale value of your home.

Advice from other listeners, start with a gym membership to see if you really want all of that equipment in your home! And if you do buy used!

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You can hear Dee Lee’s expert financial advice on WBZ NewsRadio 1030 each weekday at 1:55 p.m. and 3:55 p.m.

Subscribe to Dee’s Money Matters newsletter here.

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