People often make poor financial choices, and large purchases like new cars become especially risky when contracts and fine print are ignored. High interest rates combined with the power of compounding can rapidly increase the cost of a loan and trap borrowers in long-term debt. One buyer financed a vehicle at 18% interest, resulting in a severely unfavorable loan. Options such as selling the vehicle or prepaying the loan can mitigate damage. Sales pressure can prompt impulsive signatures, and widespread insurance mistakes lead many Americans to overpay unnecessarily each year.
However, when it comes to big-ticket items (think a new car), things can get really messy and costly for those who sign on the dotted line without reading all of the fine print. And, of course, crunching all the numbers and double-checking the figures is an absolute must so that one doesn't fall into a debt that could compound on itself faster than one would ever think possible.
Indeed, the hazards of not fully understanding the power of compounding (it can build profound wealth, but also take it away) and how obscenely high interest rates can keep one stuck for years, can leave one in a bad spot well after they're tied to a contract with terms that may not have been well understood at the dealership when hounded to sign by a salesperson.
Collection
[
|
...
]