Debt Despite Myself

I HATE DEBT. A very happy day was when we paid off the mortgage. I’d rather walk on broken glass than pay a penny of interest on my credit cards. But there have been a few exceptions to my usual rule, all involving car purchases.

The first was many years ago when I reached what I thought was an all-cash deal on a new car. The salesman surprised me when he offered the same price with 0% financing. It seemed like a no-lose proposition, and I took him up on it.

Several years later, I was similarly negotiating a cash offer on a new car. The salesman likewise offered the same price with 0% financing. I pressed him to explain how the manufacturer made money on the deal. He shook his head and said it was even crazier than that: He got an extra $200 if he signed me up. I told him I’d do it if he’d split the $200. Deal done.

Finally, a few years ago, I was helping our youngest daughter buy a car. As usual, I was offering a cash deal. The dealership’s finance department offered very low financing, but not 0%, and I declined. The woman there told me I’d be doing my daughter a favor if we took the financing, put the loan in my daughter’s name with me as guarantor, made timely payments for a year and then paid off the balance. The interest cost would be minimal and my daughter would establish a solid credit score. I took the advice and the financing.

I signed my daughter up for a free Credit Karma account and, over the next several years, watched her credit score increase until she achieved the excellent score she enjoys today. Along the way, her score helped with several landlords as she applied for rentals. Recently, just after she and her new hubby closed on their first home, she called to thank me. Her highflying credit score was a key ingredient in snagging a very favorable mortgage rate.

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