How To Never Make Another Car Payment Again
Written by: Tony Puckerin
Web Site: automobilenetmarketing.com
Car prices today compete with small houses and well-equipped mobile homes. As these price increases become more accepted by consumers, so too are longer terms that are necessary to fit them into cost of living budgets. At one point, magic payment amount for retail automobile market was $200 per month. But that payment would only satisfy a loan of approximately $8000- 10000 depending on interest rates.
The average car payment today is closer to $400 per month and that's with financial institutions stretching terms to 72-84 and 120 months. Something has gone terribly wrong in psyche of consumers to even imagine that an automobile will not become obsolete before it is all paid up, 6, 7 or 10 years down road.
All they really need to do is take a look at a vehicle sold in 1995, 1997 or 1999, to get a live preview of what their new car will look like and potentially what it will be worth. Interestingly, research indicates that most Americans get bored with a car after driving it for 24-36 months. Why then would typical financing term be 72-120 months?
At point of purchase, most consumers tend to forget that car payments never include cost of insurance, required maintenance and gas. When these items are added to a car payment, it can easily exceed what some people are paying in mortgages.
It's analogous to Middle Eastern people like Iranians whose culture practices beating themselves on back with chains and whips. Every month, millions of Americans face self-inflicted pain of making another car payment. Like Iranians, they believe that if they can do it, it must be good and it will somehow make them better people in hereafter.
A self-made millionaire, Dr. Cooper, an advocate for reversing unnecessary consumer debt has come up with a simple plan to change how we think of automobile ownership. His plan uses same philosophy that our grand fathers grew up with, i.e. never buy anything that you cannot afford to pay for out of your own pocket.
Unfortunately, if we lived by those rules we would need traffic lights and zebra crossings on our major highways because they would be packed with pedestrians.
Well let's share Dr. Cooper's plan. He calls it "Vehicle Saving Fund". This is a basic commercial bank savings account that can be started at any local bank. To make it more meaningful to you, lets call it "Freedom From Car Payment Fund." Anyone can start such a fund; it does not matter if they are currently financing a vehicle.
The idea is that if you intend to be a productive member of society and enjoy benefits of your labor you will need to have personal transportation. This is not optional for most people who do not live in a big city where public transportation is available. The fund should be considered absolutely necessary, much like rent or mortgage, it's a living expense.
Here is how it works; if you are currently driving a financed vehicle, resolve to pay it off in its normal term. It's hard to keep making payment on a vehicle you do not like but that's where discipline becomes important. Also, resolve to put aside a small amount every month to your "Freedom From Car Payment" account. Initially, it is totally understandable that it may be a little difficult but amount is not important, it's habit and psychology of doing it that makes all difference. You can start with as little as $5-$10-$25 just be committed to doing it every month until it becomes a habit.