A lot of people are getting excited about this program. Dealerships are advertizing this benefit with full page ads and almost everyone with an older vehicle is considering it.
Who wouldn’t want a new vehicle and this could be a once in a lifetime opportunity to get one. The program is a bit tricky to quality for, but that doesn’t seem to matter as the buzz is bringing on a lot of people to the dealerships asking questions and even if they don’t quality, they can be talked into purchasing the vehicle of their dreams.
Now back to reality. This bill is completely idiotic. The nation is broke and the government is getting threatened but our debtors on a daily basis about the trillions of dollar we are printing to prop up the economy. How could it be a good idea to drive the US consumers further into debt?
My advice is to resist the temptation unless you were already planning to purchase a new vehicle or you have the cash to do so. Most people that have an older vehicle have it paid off. The government should be encouraging everyone to pay off their vehicle.
Here Are 7 Reasons Why You Should Own Your Vehicle
Owning your vehicle gives you more flexibility and freedom by not having a monthly payment that your income is dependent upon. This is the time to reduce monthly expense, not increase them.
2. Bad investment, not worth borrow money for
Vehicles are never good investments unless you are purchasing a utility vehicle for your business that can be used to increase your business revenue. Instead of purchasing a new vehicle, take the money and invest it in gold or commodities or agriculture or something that you believe in.
3. Better positioned for future financial crisis
The coming financial crisis, led by the currency crisis of the dollar, will not be pretty. Saving your money will better position you to manage that situation.
4. Reduce your financial risk / cannot get upside down on the loan
The vehicle you purchase may lose its value faster than you can pay off the loan, putting your upside down very quickly. Think about the long term situation that you may be in a few years when you want to get out of the loan and how you are going to come up with the money to pay off the vehicle.
5. You hold the title / can sell quickly without the bank
When you own your vehicle you hold the title. You are free to barter with it or sell it without the bank getting involved.
6. More money stays in your pocket
The cheapest vehicle you can drive is always the one you own. The longer you own a vehicle the less of your money that goes to car sales man, tax, banks interest and fees.
7. New vehicles have higher insurance premiums and annual license fees
Older vehicle are usually cheaper to insure and drive. Gas mileage is usually not much more of costly unless you drive a lot. Most people are driving less and less, therefore minimizing the savings of driving a vehicle with a lower gas mileage.
Don’t take the bait. Unless you have the cash, purchasing a new vehicle is not going to help your financial situation in the middle of a deep recession and keeping your vehicle that you worked hard to pay for may be the most coveted position.
Paying for gas and insurance is hard enough, why would you want to add several hundred dollars a month for four or five years on top of that? Soon everyone will be wishing they had a vehicle that was paid off and you already have one.