Money Traps
For many of us a vehicle is much more than just a means of getting
from A to B. It’s a status symbol, a fashion symbol and, apparently,
it reflects who we are as individuals. Or at least that’s what
the marketing blurbs would have us believe.
The minute a new car is driven out of the showroom, it loses value.
In fact, it’s hard to find a faster depreciating asset than a
new car. Even used cars suffer from a degree of depreciation (although
there are exceptions to the rule) although at a somewhat slower rate.
To that end, if you are facing financial difficulties and are carrying
a lot of money tied up in your vehicle, you should seriously consider
‘down grading’. If you are in a contract still to pay off
the vehicle, then that is even more reason to consider your options,
although be vary wary of any termination fees or other penalty charges.
When facing financial difficulties, you need to be practical about
your situation, and having a vehicle that is losing value daily, while
trying to service debt which is attracting penalty interest daily makes
no financial sense at all. During these tough times you should view
your vehicle as a tool, as a method of getting from A to B, and not
as a fashion item or a status symbol.
If you do keep your car, respect it for the asset that it is, no matter
what you paid for it. A car is generally the second biggest purchase
a person will make in their lifetime after a house, and the more you
look after your vehicle the longer it will keep it’s value.
Consider also the way you drive and the impact it has on your finances.
It’s hard to see it in monetary terms while you’re driving,
but aggressive or heavy on the foot driving adds considerably to your
gas bill and wear and tear on components and your car’s tires.
It all adds up over time, and you’ll end up paying for it eventually.
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