by: Tony Puckerin
AgainCar prices today compete with small houses and well-equippedmobile homes. As these price increases become more accepted byconsumers, so too are the longer terms that are necessary to fitthem into cost of living budgets. At one point, the magic paymentamount for the retail automobile market was $200 per month. Butthat 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 andthat's with financial institutions stretching the terms to 72-84and 120 months. Something has gone terribly wrong in the psyche ofconsumers to even imagine that an automobile will not becomeobsolete 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 in1995, 1997 or 1999, to get a live preview of what their new carwill look like and potentially what it will be worth.Interestingly, research indicates that most Americans get boredwith a car after driving it for 24-36 months. Why thenwould the typical financing term be 72-120 months? At the point of purchase, most consumers tend to forget that carpayments never include the cost of insurance, required maintenanceand gas. When these items are added to a car payment, it caneasily exceed what some people are paying in mortgages.It's analogous to the Middle Eastern people like Iranians whoseculture practices beating themselves on the back with chains andwhips. Every month, millions of Americans face the self-inflictedpain of making another car payment. Like the Iranians, theybelieve that if they can do it, it must be good and it willsomehow make them better people in the hereafter. A self-made millionaire, Dr. Cooper, an advocate for reversingunnecessary consumer debt has come up with a simple plan to changehow we think of automobile ownership. His plan uses the samephilosophy that our grand fathers grew up with, i.e. never buyanything that you cannot afford to pay for out of your own pocket.Unfortunately, if we lived by those rules we would need trafficlights and zebra crossings on our major highways because theywould be packed with pedestrians. Well let's share Dr. Cooper's plan. He calls it the "VehicleSaving Fund". This is a basic commercial bank savingsaccount that can be started at any local bank. To make it moremeaningful to you, lets call it the "Freedom From CarPayment Fund." Anyone can start such a fund; it does notmatter if they are currently financing a vehicle. The idea is that if you intend to be a productive member ofsociety and enjoy the benefits of your labor you will need to havepersonal transportation. This is not optional for most people whodo not live in a big city where public transportation isavailable. 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 financedvehicle, resolve to pay it off in its normal term. It's hard tokeep making payment on a vehicle you do not like but that's wherethe discipline becomes important. Also, resolve to put aside asmall amount every month to your "Freedom From CarPayment" account. Initially, it is totally understandablethat 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 thedifference. You can start with as little as $5-$10-$25 just becommitted to doing it every month until it becomes a habit. You will also have to make a decision to continue driving thevehicle you are currently paying, this plan does not work if youdecide that you need a new vehicle before paying off the one youare driving. The closer you are to your end of term, the betterposition you will be in to get what you want. But there is norush, when you pay it off you should then begin to put the amountof your previous payment into your vehicle fund. Now with theequity in your current vehicle and your savings you can beginshopping. Considering the prices of automobiles today, there is a highprobability that because of your vehicle depreciation and thesmall savings, you might not have enough money to buy a newvehicle. If you do not have enough to purchase what you want,there are always other options; the first is to buy what you canafford. The alternative (worst-case scenario) is facing the dealerwith no savings and having negative equity in the vehicle you arecurrently driving.Strange concept, I know, but when its all said and done,transportation is transportation, it gets you from point A topoint B. The only difference is what you are willing to pay to getthere. For many, because of the values they hold "whateverit takes" is an appropriate answer but the mind set has tonow change to discipline and the desire to stop making lifetimepayments. If you don't have a car right now and are enjoying the bliss ofnot having a financial obligation to an automobile, you can beginyour savings immediately so that when the time comes you will havea sizable chunk to begin your search for your new car. You are ina very good position if you are not in the market presentlylooking for a vehicle.You have the time to save and plan for your next automobile. Beginthe "Freedom From Car Payments Fund" today and in acouple of years you will really be much better off. Contrary towhat dealers try to make you believe, car ownership does requirelong term planning in order to break the cycle of swappingpayments every 3-4 years. It is a long term serious investment.It's that simple. Easy, no but simple, and it can be done. Itrequires discipline and patience two characteristics that are noteasily harnessed in by the now generation. The obvious benefit isno car payment but you will also save on insurance and have muchmore disposable income for other necessities. With determination,a little vision and planning anyone can drive exactly what theywant; without the burden of a monthly payment. Could that be you?
About the author:Tony Puckerin is an Automobile Broker in Southern Florida who represents clients at local automobile dealerships. His service has recently expanded to Internet and cover the United States and a few select international clients. For more information go to http://www.automobilenetmarketing.com
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