It is a known fact that, like credit cards, automobiles debt can get many people into grave financial trouble. The scarier part is that they may do it unknowingly.
Typically, automobiles are emotional purchases. The decision to buy a new car is often based on the fact that you want to create an impression on your family, friends, and neighbors, and not because you can easily afford it. It is like a statement of declaration of your wealth, personality, interest, or taste, etc. Because if cars are bought for it’s practicality, everyone would just be buying those which are the cheapest with the highest mileage per liter of gas. And we all know that that is not the case. Right… some people do need to rush to work everyday which justifies their flaming red Ferraris…
In this way, you end up by purchasing an automobile that you can’t pay for when you are not actually rich, and to do that you need to borrow more. By trying to project a false image of yourself, you buy a car that you can’t afford, and now you can’t keep up with the monthly payments. Actually you’re kidding yourself and the sooner you return to reality the better or you’ll get buried deeper into debt, and face the inevitable consequences of your action.
Unfortunately, many are “topsy turvy” in their attitude towards automobiles. If you have this attitude it reveals that you owe more on your car, than your car is worth. There are some people who have gone so far as to return to the dealership, to trade their topsy turvy car for another one. And now they are paying not only for their new car, but the balance they owe on the old car.
Auto dealerships flourish on unwise actions like this. They will go to any lengths to do what they can to make the customer feel like a VIP and inflate your sentiments about buying a car. Their chief goal is to somehow persuade you to take a test drive of the car, and if you do, you are hooked, before you realize it.
If you look around and notice the background of certain people who have quietly become wealthy through the years, you’ll find that they all have at least one thing in common: Nearly all of them own older cars! They too must have felt the need for a luxury saloon, like you did, but resisted the desire to sink any more into cars that stand to lose their original value with the passing of time. They’d rather invest their hard earned cash into buying stocks, a house, or any other investments that increase in value, over time. Because $50,000 is only worth that to an average regular guy. But to a financially savvy investor, $50,000 is not just worth $50,000 today. It could very well be worth $5,000,000 in 10 years. If you have that mindset, will you still be willing to splurge on a sports car at the dealership?
The only way out from this situation, is to look for alternatives that let you bring down that automotive debt of yours. Obviously, the most sensible thing that you can do under the circumstances is to sell your car and drive something realistic, for you’re paying not only for the cost of the car, but the cost of insurance and upkeep as well. Thus you are triply handicapped, whichever way you look at it.
As the old saying goes, a car is not an asset but a liability. The only obvious way a car is an asset is when you operate a rental company and the more vehicles you have, the more rental income you collect from your clients.
Fortunately, a positive note is here. The cars that are being manufactured these days are a whole lot better than the ones made a few decades ago. If you can relieve yourself of that expensive car, you can easily buy a really economical and reliable car that not only looks nice, but do not cost a fortune as well. And you are sure to discover one fact: if you are ready to purchase a used car for cash, and no monthly payment to make, the cash you are saving should give you more satisfaction than having that new topsy turvy car!