I bought my current daily-driver car in 2008 after a bad car accident destroyed my previous car. I was just starting to exit the corporate consumer way of thinking back in those days, but after the accident I was too injured to do the leg work to buy a used car, or even to go to a dealer. I just bought it online and the dealer even dropped it off.
Not too long after that I realized I will never buy a new car again. It's the most glaringly obvious large scale bad decision regular people make over and over again. Over the course of a lifetime, the cost of buying new cars and trading them in versus buying used cars gets well into 6 digit territory. It's an obvious scam, so why do people fall for it?
People seem to think in terms of how much pain they can endure in the form of a monthly payment versus the total value of the transaction. The car is a utility to them, rather than a thing that they purchased and own. Their consciousness is in a pretty narrow time band--they never even step back from the daily toil to consider the net effect of their choices.
They also tend to think of unforeseen car repairs as horribly catastrophic instead of a fairly routine thing. It is a hassle and annoying to have to get a car towed to a mechanic, especially from a long distance, but generally that expense is minor compared to even one month's car payment. Depending on the car model, repairs costs can be modest.
People also see cars as a badge of status. There are many people who go into debt to avoid the appearance of being poor. Some have lingering childhood trauma associated with poverty. Some are just vain. Some people get suckered in by ads; they imagine the pleasure of owning a car is substantial.
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