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How To Never Make Another Car Payment


       
     
       




How To Never Make Another Car Payment


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Car prices today compete with small houses and well-equipped mobile homes. As these price increases become more accepted by consumers, so too are the longer terms that are necessary to fit them into cost of living budgets. At one point, the magic payment amount for the 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 the terms to 72-84 and 120 months. Something has gone terribly wrong in the 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 the 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 the typical financing term be 72-120 months?

At the point of purchase, most consumers tend to forget that car payments never include the 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.
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It's analogous to the Middle Eastern people like Iranians whose culture practices beating themselves on the back with chains and whips. Every month, millions of Americans face the self-inflicted pain of making another car payment. Like the Iranians, they believe that if they can do it, it must be good and it will somehow make them better people in the 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 the 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.

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Well let's share Dr. Cooper's plan. He calls it the "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 the "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 the 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 the 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 the 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 the amount is not important, it's the habit and the psychology of doing it that makes all the difference. You can start with as little as $5-$10-$25 just be committed to doing it every month until it becomes a habit.

You will also have to make a decision to continue driving the vehicle you are currently paying, this plan does not work if you decide that you need a new vehicle before paying off the one you are driving. The closer you are to your end of term, the better position you will be in to get what you want. But there is no rush, when you pay it off you should then begin to put the amount of your previous payment into your ......

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