Holistic Survival
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Surviving Your Car Loan

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Juliet Schor, writing in her book, “The Overspent American,” found nearly half of all car owners view their automobile as a reflection of who they are. To that we say, “Snap out of it!” It’s just a hunk of plastic, glass, and metal with a planned obsolescence of not more than a few years. In fact, too many of us are still paying off the loan long after the vehicle is gone.

But what does all this car talk have to do with Holistic Survival? Quite a bit actually. You see, there’s a good chance that when Armageddon arrives, it will be with the ruffling sound of worthless dollar bills fluttering in the air, inflated to essentially useless stature by our political and economic leaders. Don’t fear the guns and bombs and natural disasters. Fear the economy because it’s what’s liable to kill you.

When the economy tanks – we mean REALLY tanks – the ones with the best chance of survival will be those who paid down their consumer debt, got out from under minimum monthly payments, and learned to live within their means. With that end goal in mind, let’s take a look at how to build a better relationship with your car.

When you go out to buy your next car, do so with the idea of keeping it for at least ten years, longer if possible. The financial freedom you buy with these kinds of choices is far more valuable than owning the latest and greatest Detroit special with built-in squirrel deflectors. Here’s how to break the cycle of auto financing.

Forget about Leasing: Dealers lure you into a car lease with the promise of lower monthly payments than if you bought it outright. The problem is that, at the end of the lease, you own nothing. No equity. No ragged out vehicle worth at least a few hundred dollars. You own nothing. So while we don’t suggest you finance a vehicle purchase, it’s better than leasing.

Keep the Habit Going: You’re in the habit of making car payments anyway, right? Keep doing it even after the car is paid off. Say what? You read it right. Pay the car off but redirect the monthly payment into a savings account. Drive the car you own free and clear for another five years and you’ll have a tidy nest egg to buy your next car outright.

Brand New Cars are Silly: Of course, if you’re filthy rich or an imbecile feel free to buy a brand new car. For the rest of us here on planet earth, it makes no sense. New cars lose a large chunk of their value the moment you drive them off the lot. Buying new is the height of financial irresponsibility. A well-maintained used car, even if it’s only a few years old, will yield the best deals.

Reliability: We’ve all heard the jokes about different sorts of vehicles and how unreliable they are. Jokes aside, organizations like Consumer Reports and Edmunds.com provide lists of the most reliable vehicles. Is there anything inherently wrong with choosing a car that costs less to operate? Please say no.

Hidden Expenses: The car with the lowest price tag is not always the one with the best deal. This point is an extension of the previous one. Some cars are more expensive to insure and maintain. Before buying, you need to consider ALL the parameters: cost of fuel, insurance, maintenance, replacement parts, and depreciation.

A bit more about the concept of planned obsolescence. If you for one second think that car companies don’t walk a constant tightrope trying to find the sweet spot in a car’s life at which consumers will rebel. Heck, if it were up to them, we’d all buy a new car every month, and certainly once a year. Why else do you think they have annual car shows where new models prance and preen around the stage? Why do you think the big boys in Detroit spend millions of dollars to trumpet the praises of the new models?

Here’s a heads up that should be no surprise to Holistic survival readers. Follow the money to find the truth. Car manufacturers want your car to wear out as quickly as possible so you’ll buy a new one. Of course, they have to be careful it doesn’t fall apart so fast you get disgusted and switch brands. When you look behind the curtains and think about how the industry operates, you should be insulted that they take you for a fool.

Does this make us a fool if we willfully choose car payments? Decide for yourself.

The Holistic Survival Team

 

 

 

Flickr / NRMA New Cars

 

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