Next time you (smart with your money reader) wonder how so many Americans have large credit card balances and dig themselves in deep financial holes, ask people what they drive. Even better cruise craig's list money forum. A car is the 2nd biggest purchase you'll make behind your home. Here is a straw poll from a cookout with friends of the cars they drive, their lowest MSRP, and what their family unit consisted of.....
Mazda 6 $18,995 single male
Toyota Camry $20,635 single female
Chevy Tahoe $34,115 single male
Ford Focus $13,745 single female
Acura RSX $20,325 single male
I am a single male with a Hyundai Elantra priced at $13,299. Sadly, through my friends' revelations, I am pretty certain I am the highest wage earner of this group. What I cannot believe are the cars purchased which are more suited to families (and more expensive) by single people? Now these same people claim to have credit card debt and constantly discuss money issues. I have a feeling that if they thought about their vehicle as a depreciating asset and not an investment, they would not buy such ill-suited-for-them vehicles.
Cars are a major purchase and the longer you can put that purchase off, the better. The last vehicle I drove was 15 years old when I traded it to the dealer. I plan on riding this car out to the 10 year mark. Car dealerships have doen a great job of brainwashing people into 5-6 year payment plans. They have persuaded people to accept the idea of always having a car payment. Every dollar that you send out the door to finance your car is a dollar you cannot put to something that can earn a return for you or give your family or community value (education/donations to charity). I'm not saying buy cheap cars and scrimp. I'm saying think about the cars you are purchasing and why? Keeping up with the Joneses adds debt and gives little satisfaction. In the words of Tyler Durden, you're not the car you drive.