It is a part of your daily lives. You have the liberty of going to places and doing the things you’d like to do. It can be costly should you choose to buy a car you cannot afford. In this clip you’ll learn the reasons.

This Episode of The Ramsey Show, a customer calls to ask Dave regarding a recent vehicle purchase. The person purchased the truck for $50,000 rather than a second hand one, which was slightly cheaper prior to the purchase. It is his intention to determine if it’s a wise investment. Initial, this might seem like a steal. Dave realized that the owner had only $200,000 worth of assets. It means that his new vehicle accounts for about a quarter of his assets and one-third of his income. This means means that a substantial portion of his investments are declining rather than growing in value. Although the original truck cost less than the newer model but the old truck was able to lose significant value once he took away from his yard. The same thing happens with new vehicles. An used truck dealer may make a more attractive offer for older models than current ones.

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