Nothing was going to stop me buying my first used car - not even a high interest car loan

Copyright © 2004
Paul Mark
BILO Media

A 16 year old boy with a couple of hundred dollars burning a hole in his pocket is looking for a car loan to buy his first used car. That was me some 30 years ago. About to learn a painful "life lesson" about a used car loan.

Hey, I had a job. I needed wheels. I was being somewhat wise - looking at a used car instead of a brand new one. I had a new girlfriend who lived out of town. What more justification to get a used car loan? My parents would surely agree. Right!

Fact of the matter is I had no real 'need' to buy a used car. And I certainly had no idea of what lay ahead in the tangled world of used car salesmen (that was an acceptable term back then) and greedy car loan lenders.

Had I approached my father, he would have taken me to his bank to get a decent rate from his home bank. Back then, even the bit banks were sympathetic and had room to personalize your car loan. But the burning in my pocket and the justification for a used car was too much let rational thinking enter into the picture.

I found the perfect vehicle in a small used car lot off the beaten track. No large overhead for this car dealer. A burned out neon business sign and a couple of weathered for sale flags adorned his modest used car lot. But most attractive was the bright green sign "Used Car Loan - Financing Available Here - Instant Approval - No Questions Asked!".....PERFECT!

The going used car loan rate at the bank was somewhere south of 6 percent per year compounded every 6 months. I gleefully signed up for a healthy 22% compounded every month! But, hey, I had my perfect vehicle.

No need for a warranty either. The dealer assured me all his used cars were driven by elderly women and fully inspected by his nephew before passing his strict used car standards. Right!

As a bonus...he threw in a spare can of gas. Nice!

My pride was short lived. My car loan payments ate up over 1/2 of my weekly wages. I barely survived my fathers scorn. The worst of it tho....barely 48 hours later my perfect new used car stopped running. A little treat from the car dealer - the can of gas was laced with sugar! Nice guy, not.

So 3 months later, I had burned up the remainder of my salary buying used parts to get my used car back on the road. Some 6 months after that I sold it at a loss and spent another 4 months paying off the loan. What a nightmare.

Lessons learned. Get some advice on used cars, and on a used car loan before you allow your burning desire to buy a car take over your brain.

- Paul Mark
BILO Media