Everytime I drive in my 2001 Honda Civic, I can't help but feel that I am driving in the bottom 5% of oldest cars on the road. Why are so many people so addicted to driving newer cars, that they can't afford? I believe most these newer cars I see on the road are financed. Is it safety? Convenience? Vanity? What leads so many large swaths of the masses to go into debt for cars? I don't even think it's vanity, if everyone else is buying new cars also. Driving an old beat up car is now more eye-catching than a new model!
New Cars and Financial Ineptitude
- Thread starter Kurtatron
- Start date
Cars, clothes, houses, boats.... Debt is a tool and, like most other tools, can be misused.
As a licensed Mortgage Loan Originator, I can assure you that cars are not the only thing that the majority of US households overspend on. The number of credit reports that I have seen with Mercedes Benz payments of $800/month on an income of $2500/month drives me mad. The older folks are not immune either, they love their credit cards and often retire with a monthly obligation that is higher than their monthly income. I often wonder if they even understand addition and subtraction since it is unsustainable. Our public schools really need to teach basic financial responsibility....but then all of those poor check cashing stores would go out of business.
We have one newer car, the others are old or getting old. I (mostly) enjoy tinkering on my older cars, while most people I know don't have the patience for fixing issues. So they finance/lease new cars, and trade often.
I see a lot of high $ trucks around here, and I'm sure most of them are financed. I just wouldn't be comfortable with that much debt.
I see a lot of high $ trucks around here, and I'm sure most of them are financed. I just wouldn't be comfortable with that much debt.
Has your soon to be 20yr/old Honda lived it's whole life in the rust belt? That in itself is impressive!
My opinion, it is not safety....if people were so concerned about safety then they would drive in a safe manner. It is not convenience, because there is nothing convenient about a huge monthly bill. It is 100% vanity. We have been conditioned to believe that we "need" certain things.
In my experience you can't tell someone to make wise financial choices. My oldest sister is an example.
If people make poor financial choices, they'll have to live with the consequences.
If people make poor financial choices, they'll have to live with the consequences.
Some of us can afford newer cars. Does that make it bad that we like to drive something newer? In my case, if I had the car the OP refers to from new, it would have nearly 500,000 miles on it by now. A refresh now and then is ok...
I'm not claiming everyone is like this - responsible and can stick to their financial plans. We'll be buying a new car next year - and paying cash...
I'm not claiming everyone is like this - responsible and can stick to their financial plans. We'll be buying a new car next year - and paying cash...
Ahhhhhh...........our weekly financial wisdom thread, as people line up to pre-order their new Iphone 12! Will it be repeated that nothing should be bought if not with cash??? Heaven forbid that some people can borrow responsibly.
Why do people go into debt to purchase Christmas gifts? It is what it is. Humans are simply weak individuals.
I predict the usual chest beaters will chime in to advise us to worship Dave Ramsey? LOL.
Barkleymut, whenever I suggest kids should be taught finances in school, I get shot down and told that this responsibility belongs in the home, not to public schools. Sigh. Off my pulpit. Carry on!
Why do people go into debt to purchase Christmas gifts? It is what it is. Humans are simply weak individuals.
I predict the usual chest beaters will chime in to advise us to worship Dave Ramsey? LOL.
Barkleymut, whenever I suggest kids should be taught finances in school, I get shot down and told that this responsibility belongs in the home, not to public schools. Sigh. Off my pulpit. Carry on!
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My 23 year old civic has been in the rust belt it's whole life. Original owner and I fluid film it every year.
Many people are over their head with vehicles. A lot of those same people don't maintain vehicles, let them go for years and when it's too expensive to repair or repair costs are higher than the value of the vehicle. Other people have a stigma of what others think about what they drive, so they need to keep up with the Joneses. This cycle will never end. It keeps people employed and money flowing.
Why don’t you worry about you, and let other folks worry about other folks?
It seems to me there is a business opportunity here. Cars from the South and West coast will be rust free almost forever. It should be possible to buy 5 year old or older vehicles in the rust free zone and sell them (as being rust free) in the rust belt for very good prices. These used but rust free vehicles would then both rust out and wear out at about the same time. Everyone (and especially the environment) would win.
You probably wouldn't expect that my 2010 Ford Escape is financed... well I bought it a few years ago with $1k down and got a 6 year loan at 5.9%. I'm not the only one making payments on a 10 year old car... Now when it comes to the brand new stuff it's like phones. My Galaxy S10e that I got when it was first released is almost paid off now. Most people would upgrade it the second it was paid off. Even though I love technology and use my phone a lot, I have no intention of upgrading it. I'd rather put that $25/month toward something better like paying off my credit card debt. But people have that with cars, as soon as it's paid off they trade it in and get another loan...
We paid cash for our last new car 8 years ago. In hindsight, might it be better to get a very low loan, even 0%, and keep the money in something making 3% or better interest? Comments?
Debt scares the xxxx outta me.
I agree 100% with doitmyself; personal finance is a critical skill and should be taught in grade and high school.
So many people, perhaps most people, are not armed with sufficient financial knowledge and get trapped.
I agree 100% with doitmyself; personal finance is a critical skill and should be taught in grade and high school.
So many people, perhaps most people, are not armed with sufficient financial knowledge and get trapped.
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PimTac, you seem to have good financial sense. Perhaps you might counsel others; many will go their own way anyways, but you just might save someone's behind.
Of course, preaching is to be avoided, but if someone asks, perhaps you might share your experiences, good and otherwise.
I get a fair amount of satisfaction from having old things that still function as designed and for the purpose they were intended, like me.
