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Article:
Avoid the Three Biggest Financial Pitfalls by: Terry Mitchell For the average person and/or family, the three biggest financial pitfalls to avoid are new vehicles, credit car interest, and short-term loans. Any and all of these can drain a person's or family's coffers of much needed funds. At best, they create opportunity costs, i.e., money spent on them could be better spent on sound investments like a home or stocks (both of which appreciate in value over the long term) or on college or retirement savings. At worst, they can eventually create financial hardship and even lead to bankruptcy. Buying brand new cars, trucks, SUVs, etc. can be a real money-eater. They all depreciate in value, some much faster than others, of course. Most vehicles depreciate the most in their first year or two of life, so the person buying a vehicle when it is new will have to absorb the bulk of its depreciation costs. With the price of new vehicles as they are today, that amount can be quite excessive. On top of that, many people have the financially disastrous habit of trading them in about every two to three years for another new one. That habit will result in the piling on of depreciation and debt. Instead of buying new, I suggest buying a low-mileage vehicle that's about one to two years old. There are services available now like CarFax which allow you to trace a vehicle's history. If you look around, you can find previously-owned, former-rental, or former-lease vehicles of every type, make, and model which are in like-new shape and have less than '20
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