Why do we buy new cars?
It is exciting! That feeling you get driving the car off the
lot and parking it in your garage the first time.
The shiny tires, the way the sun reflects off the speckles
of metallic flake of the paint.
That first road trip where you get to drive it for long
distance.
Then there’s the practical reasons.
One day, while running your air condition, your car blows a
head gasket and you’re stuck along the side of the road when it’s 109 degrees
outside.
The next day you’re sittin’ pretty and cool behind the wheel
of a brand new car! No more worries of reliability.
But what about the financial side?
If you’re buying a new car as an investment… you’re in for a
rude awakening! It’s a losing proposition. If your credit rating is less than desirable…
watch that interest rate skyrocket!
And what about depreciation?
There’s the old saying that a car loses resale value the
moment you drive it off the lot. It’s true. You couldn’t get as much as you
paid for it if you were to sell it the very same day.
Many people find themselves upside down because they paid too
much money for it and financed it over a 60 or 72 month contract. After 5 years
they find that they owe more money than the car is worth?
So again I ask why do we buy new cars?
Honestly, I’m really not sure? I don’t know?
But what I DO know is that you SHOULDN’T!
And this is important!! You shouldn’t buy a car to impress
your friends. Especially when you’re young.
At this very moment in time, you may be doing very well in
your career, but things are going to change. Life changes. Passions change. You
will change.
As an “old guy”, these are some of the things I’ve learned
the hard way.
So I pass this on with hope that you won’t make the same
mistakes that I made.
Financially, you should have your eye on the big picture.
Buy a car that you CAN afford. It doesn’t have to be brand
new. It should look presentable and be reliable. Get you back and forth to work
every day. One that is dependable.
I know you’re saying “But Lou, the ladies like the bling!”
Take it from me, “the ladies” like a man who owns his own
home more!
It shows that you have done a good job of maintaining your
credit status.
Once you have your own home, credit card programs are more
than happy to extend credit to you!
Car manufacturers will be sending you propaganda begging you
to buy one of their cars! And the interest rates will be so good, it will make
perfect sense.
So here’s what I hope you take from this blog.
Your friends don’t give a crap what you drive. If they do,
get rid of them. You don’t need that kind of negativity. Buying a new car while
young is not the right time.
I know it’s really hard to think about it, but will you be
prepared to adult?
Because it’s really hard!
The more you prepare for it now, the more you’ll enjoy those
things when they become yours.
In time!
All in good time!
The thing about experience is this… if you had it while you
were young, it wouldn’t be as much fun!
I'd love to hear your comments below!
Thanks for reading!
Lou
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