The most dangerous time for a car enthusiast, is when they are about to pay off their car. No more car loan debt means that money is freed up for something else: another car, naturally. The mind wanders at the possibilities. Perhaps it’s time to buy a car with a drivetrain layout you’ve never had before. Or perhaps it’s to re-purchase a car you shouldn’t have ever sold (thank goodness I cannot comfortably afford to buy another Porsche 911 GT3).
If there’s money in the bank account, you have to spend it. Isn’t that the American way? This entire economic house of cards is dependent on people’s continuous, often times reckless, spending.
My 2021 BMW M2 Competition will be paid of in a few months. And boy is the itch to buy another car itching intensely as that date draws nearer. I’m not being irresponsible! It will be the same money that would have gone to the M2 each month! It’s very easy to rationalize to yourself any purchase. The only reason I don’t have a mortgage is because the banks wouldn’t lend me the money.
But, as I like to say since last year: “Not in this economy!” Some people think that because they can afford the monthly car payment, they can afford the car. Don’t be like those people. We have to take in account the total operating cost. That means insurance, gas, and maintenance. And unless you’ve been living under a rock, all three of those things have gone up a lot in recent years thanks to inflation.
Never mind the fact that new cars have gotten rightly expensive. (Average transaction price in America is $47,338 as of this January.) High interest rates also means that monthly payment will be up as well. It’s really not a good time to be buying a second car, taking on tens of thousands of debt for another five years. I am going to keep telling myself that this entire 2024.
The Japanese standard.