Now is the worst time ever to take on a car loan

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What are your reasons for wanting to trade out of your current vehicle?

  • Want something different? Bored of the car?
  • Your transmission is getting ready to fail?
  • Check engine light is on?
  • Engine making a knocking sound?
  • Does your car needs a paint job?
  • Does your car stinks inside?
  • Your car needs a massive details from being so filthy?

No matter how badly you want out of your old car and into a new one, none of the reasons are good enough to get rid of it… only to have the possibility to lose the new car, not long after giving up your old one.

If you are thinking about financing a new or used car right now, you could not have picked a worse time in history to do so. Imagine investing in a sizeable down payment on a new car, plus putting lots of your hard earned dollars into many car payments while owning it for a short time, only to lose your job not long after. The possibility of that happening is getting ready to go up DRAMATICALLY, sooner than you think. Imagine you’re late 90 days on your car from from being unable to find a job. One day you wake up and that nice car you were stuck paying on has been repossessed while you were sleeping. Let me tell you, BEEN THERE, DONE THAT. I’ve had it happen during a previous recession. But back then, I had no idea I was in a recession because I didn’t know what the indicators were and the news media kept it hidden from the public, as they do everything else.

NOW WE KNOW when the recession is coming and when it’s getting close. And as of this writing, we are nearly a month away before it starts.

I’m not writing this post as gloom and doom just trying to scare people. I’m here to educate you on how to know when is a good time or bad time to start a new loan process. The best predictor we have that lets us know when a recession is coming is by looking at short and long term yield curves. An inverted yield curve occurs when short-term interest rates are higher than long-term interest rates. Normally, longer-term bonds have higher yields because investors demand more return for tying up their money for a longer period, which compensates for inflation risk and uncertainty over time. However, in an inverted yield curve, this typical relationship is flipped.

You’re not investing in the bond market, so you really don’t care. You are bored of your car or it has a major issue that you’d rather not pay to fix.

KEEP THE CAR YOU HAVE! FIX IT! PAINT IT! CLEAN IT! Whatever problems you have with it, it’s CHEAPER to fix it than buy a whole new vehicle, with an average new car price pushing an insane $49,000.

BE A WISE SHOPPER! Watch this short video to learn the dangers of what happens to the economy and most of the middle class after the short term bonds go back to normal. As of now, we’ve been in an inverted yield curve since April of 2002. When it becomes uninverted, that’s when history is made, in a VERY BAD WAY. And the entire reason it’s not a wise idea to take on a new car loan right now. After seeing this, it will be like waking up to “The Matrix” and knowing something that most of the people walking among you have no idea what’s going on. I’m not trying to sell you anything here. Just educate you on NOW is the WRONG TIME to take on a new loan by car or even a home. You need to focus on keeping what you have a be glad you have it.

Keep the car you already have.
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