2. Ford Truck MSRP - $30,740 When you drive it off the lot it will immediately depreciate by as much as 20%. $6,148 Within 5 minutes your $30,000 truck is now worth $24,592

3. Depreciation has no effect on you if you plan on driving the wheels off your car. But, if you intend on trading it in, you will need to stay aware of depreciation. If you keep your car five years or less

4. If something happens to your car, a wreck or something else, you could suffer if your car isn’t worth the amount you owe. Gap insurance is something the dealership will ask you if you want. Gap insurance usually costs between $500 and $1000. It is used when you owe more than your vehicle is worth. If something happens to your vehicle before it’s paid off gap insurance covers the upside down.

5. Roughly 15% a year Brand new cars can depreciate as much as 20% when you drive it off the lot. After 5 years the depreciation value slows a bit. Factors affect the depreciation: Make/Model/Year Color – more neutral colors keep value longer Reputations for low maintenance and high quality

7. When you are paying off a vehicle, the interest is what you pay off first. This affects the depreciation of a vehicle. The principal is the last chunk of the payments. If you bought the $30,740 truck on a 6 year note with a 5.9% interest rate you would end up paying $36,576.

8. 1.Int. $151 Prin. $357Balance - $30, 383 10. Int. $153 Prin. $373Balance - $27, 091 20. Int. $116 Prin. $392Balance - $23,259 30. Int. $97 Prin. $411Balance - $19,235 40. Int. $76 Prin. $432 Balance - $15,008 50. Int. $54 Prin. $454Balance - $10,568 60. Int. $31 Prin. $477 Balance - $5,906 70. Int. $7Prin. $503Balance - $506

9. As you pay off your Ford truck, the value of the truck goes down. $30,740 Year 1 – $23,055You owe $26,340 Year 2 – $20,285.40You owe $21,673 Year 3 – $17,853.79You owe $16,723 Year 4 – $14,354.26You owe $11,474 Year 5 – $13,051.12You owe $5,906 After 5 years depreciation values aren’t as drastic.

10. If you trade off your vehicle before you are finished paying for it you could be upside down. For example, if you trade it in after two years you may actually have to pay more for the next car you are buying. Anything you owe on your vehicle will be added to the vehicle you will be purchasing. Most, if not all, dealerships will not give you the full value of your trade-in. They are wanting to sell it.

11. Doing the math, if you have had the truck for 2 years and wish to trade it in it should be worth $20,288.40. The dealership may give you $15,351 depending on the mileage and condition. I figured this with 30,000 miles and very good condition. After two years you still owe $21,673. This means you will be upside down $6,322.

12. The extra amount you owe will be added to the vehicle you are about to purchase. $6,322 Let’s say you want to trade up for more hauling power or more room. You may even want something a bit nicer.

13. MSRP $39,595 You will now add the amount owed on your trade-in to the total cost of this truck. ($6,322) Total: $45,917 Your payments for the same interest rate and the same amount of years will now be: $759 a month for 72 months.

14. Your truck’s value will still depreciate at around 20% a year, but the amount you owe will not touch the value for much longer. Year 1 – $26,696You owe $39,345 Year 2 – $26,132You owe $32,374 Year 3 – $22,996You owe $24,980 Year 4 – $19.777You owe $17,138 Year 5 – $16,810You owe $8,821

15. Every time you trade your vehicle in, do not expect to get full market value. The dealership will not give you as much as you want. If you trade in vehicles before you pay them off you could get upside down. If you do this several times in a row it will be very difficult to get in the black.

16. When you pay off a vehicle, think hard before trading it in. You may want something with better gas mileage or just an upgrade, but remember not having a car payment could save you 500 to 700 a month depending on prices. Your new car will still need gas and demand a payment.

17. The average person drives 15,000 miles per year. 18 miles/gallon – Yearly cost - $3,336 35 miles/gallon – Yearly cost - $1,716 If you trade in for better gas mileage figure the yearly outgoing money.

18. $18,440 Average MPG – 35 Yearly cost for gas - $1,716 Payments for 6 years - $305/month If you had a vehicle that was paid for and gets 18 MPG you pay $3,336 a year. If you trade in – your yearly outgoing money will include gas and payments - $5,376 a year

19. This concept applies to almost anything. Interest rates and what is purchased changes, but usually the value of an item goes down with age. If interest is applied you will pay more interest during the first part of your pay-off plan. Never underestimate things that are totally paid for, for things that are brand new. Beware of marketing that makes having something new seem essential.