Juanita is saving up to buy a new truck. She wants to put $4000 down and borrow the rest. That down payment will lower the monthly payment so she can easily afford a new truck. She has been saving for 18 months and has half the money, It will take her about the same amount of time to save up the other half. Is this a good use of credit?

Question

Juanita is saving up to buy a new truck. She wants to put $4000 down and borrow the rest. That down payment will lower the monthly payment so she can easily afford a new truck. She has been saving for 18 months and has half the money, It will take her about the same amount of time to save up the other half. Is this a good use of credit?

A. • Yes, borrowing money is always good for business.
B. • No, a smaller down payment would get her a new truck today.
C. • Yes, it is a major purchase and Juanita has figured out what she can afford.
D. • No, Juanita should save for the full price of the truck no matter how long it takes.

Answer 1

C. • Yes, it is a major purchase and Juanita has figured out what she can afford.

Borrowing the money with a reasonable down payment allows Juanita to purchase the truck now and make manageable monthly payments. As long as she has planned out her finances and knows she can afford the monthly payments, using credit in this situation can be a good decision.