A friend told me that his ten year old car is starting to give him trouble already. It seems like he is always visiting the workshop, from repairing his engine to repairing his power window, then the battery died, etc.
A car is the second largest purchase in a working class person's life, second only to a house. Assuming that a new car owner takes out a maximum of nine year auto loan, this means that as soon as the car loan is paid off, the car would start showing its age already.
Of course there are some people with better luck. Either they buy a better car right off (Japanese and European cars are sturdier) or they don't have to take out a maximum loan. Or there are people who could afford to change their car before it shows signs of age (according to another friend, six years is the time to let it go).
And then there are people who are rich enough to be able to afford to purchase a car in cash, without having to take out a loan and pay interest as interest alone could cost 1/3 to 1/2 of the total cost of the car in the end. However buying a new car in cash is never a good idea as one may get a knock at the door by the IRS.
Anyway, now my friend with car problems is thinking if it is more economically viable to repair his car or to buy a new car. This got me thinking that it looks for working class people, we would forever be tied to a car loan! Well, of course, we could not own a car but that's another matter altogether!
A car is the second largest purchase in a working class person's life, second only to a house. Assuming that a new car owner takes out a maximum of nine year auto loan, this means that as soon as the car loan is paid off, the car would start showing its age already.
Of course there are some people with better luck. Either they buy a better car right off (Japanese and European cars are sturdier) or they don't have to take out a maximum loan. Or there are people who could afford to change their car before it shows signs of age (according to another friend, six years is the time to let it go).
And then there are people who are rich enough to be able to afford to purchase a car in cash, without having to take out a loan and pay interest as interest alone could cost 1/3 to 1/2 of the total cost of the car in the end. However buying a new car in cash is never a good idea as one may get a knock at the door by the IRS.
Anyway, now my friend with car problems is thinking if it is more economically viable to repair his car or to buy a new car. This got me thinking that it looks for working class people, we would forever be tied to a car loan! Well, of course, we could not own a car but that's another matter altogether!
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