Story time. I have finally freed myself from a huge financial burden known as the monthly car payment. Not long ago I found myself walking into the Chevrolet dealership to buy a used car for 5 grand, and found myself walking out with a 3 year car lease. I had felt the sweeping sensation of buyer's remorse before, but this was on a whole other level. "What had I just done? Did I really just sign a car lease? Why didn't you stick to the plan and pay cash for your car?!"
We live in a very "I want it now" type of world riddled with materialism and consumerism. We just can't wait for that shiny new toy. The question most people ask now is not "How much?" but rather, "How much down and how much per month?" I fell victim to this rather quickly and found myself no longer controlling my own impulses when I saw the brand new cars on the showroom floor. I ended up ditching my plan to pay cash for a clunker to get around and instead, leased a new Chevrolet Malibu.
Of course, the feeling that I had just made a huge mistake was not immediate. In fact, driving off the lot in this brand new sporty car was a feeling I never had felt before. This was my first legitimate new car I ever "owned" (hah!)… The next day I felt quite different about my new set of wheels. The reality of the burdensome monthly payments and the required full coverage insurance hit me a little too late. I started to try and rationalize this decision any way I could. "Oh well it's new…it won't have any issues! The car is fully covered too…I probably won't go over the contract miles too much…"
Not even one year later, I found myself scraping by with my credit cards to hold bills over and 5000 miles outside of my yearly allowance. To put this into perspective, for every mile you go over your contract allowance, you pay 25 cents. So for a three-year contract, I was facing a nearly $4000 bill before all other fees just to turn the car back in! What in the world was I doing? "I'm going to get slaughtered when I turn this thing in." I told myself. I needed to do something fast to get out of this.
It was time to go fishing. I posted the car on multiple lease swapping sites, as well as Craigslist. Things were starting to look desperate and a lot of callers about the car did not pass the credit check to transfer the lease. Eventually I did end up finding someone to take over the car and couldn't have been more relieved. It felt like a huge weight had been lifted off my shoulders and I could get things in order again. I vowed never to lease a car again. I do not own a car at the moment and have opted to use public transportation for the time being, but you can bet my next car purchase will be paid for in cold hard cash.
My story is not unique. Millions of Americans have gotten themselves into the same (if not worse) situation as I had. Not all of them were as fortunate to have the lease taken over. Repossesions are at an all time high as many fail to make good on their car payments due to poor financial planning. Car repossessions can also have devastating effects on your credit and income as you may be sued for the balance on the vehicle after it's auctioned off.
If you are reading this and were considering leasing or financing a new car, DONT. There is no good reason to do this as a car loses its value far faster than you make payments on it. You will almost always be upside down on a new car. Your financial situation matters not, it is simply a bad deal for most. Do yourself a favor and take it from someone who has already made the mistake, if you can't pay cash for the car you cannot afford it. Find the best car you can pony up the cash for that runs and drives, and enjoy the feeling of complete freedom from a monthly car payment. I know I will.
Until Next Time - The Simple Bachelor
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