Saturday, May 09, 2009

Some sums

Now I understand what "breaking even" means when drivers go about buying their next car. Simply put, it's the difference between what you owe the bank for your previous car and what the dealer is willing to pay for it as a second-hand car.

The amount I got for M2 not only paid off my existing loan but also went towards a significant portion of my downpayment for the new M2. So my initial capital outlay for the new car wasn't that much after all. What I did pay for was a reduction of the loan I would be taking from the bank so that my monthly installment for the new car is just a little lower than what I am currently paying.

Ok. Too much math. But it does show that it's a lot easier to buy a car when you already have a car.

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