how do you use leverage if car is at a great price

Asked by Feb 06, 2013 at 01:06 PM about the 2011 Ford Explorer

Question type: Shopping & Pricing

I'm looking at a car and it says it's a great price and says great leverage.  What does that mean and how do I use leverage under these circumstances?

1 Answer

90,055

You don't. Leverage is a term used mostly in real estate deals and means that you use mortgaged properties to buy other properties. In investing, it means using borrowed capital, such as margin, to increase the potential return of an investment. --- A Ford Explorer is a depreciating asset which means you should make the loan amount as low as possible by making a large down payment. Paying cash up front makes the best fiscal sense in car buying. --- If I'm buying a car, I'll determine what is a "Great deal" and what has "Great Leverage" - not some ad- man writing advertisements to entice the masses. You are the consumer, make smart choices. Use KBB.com, Edmunds.com and TrueCar.com to determine how much particular vehicles are selling for in your area. Learn the dealership and salesman's tricks and traps to separate you from your money. You buy one vehicle every few years, they sell many vehicles weekly. Inform yourself so you can get close to a fair deal at the end of the negotiations.

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