The car too often remains synonymous with social success and many are ready to go to extremes to “do like everyone else”. It is enough to travel a little in the rest of the world to see that we live well above our means as far as our vehicle is concerned and this remark is also true for everything related to consumption in general!
Why spend 10,000 when you can spend 35,000!
The “box premium”, “The customer advantage”, the “Exceptional promotion”, the “VAT refunded”, everything is good to give the illusion that it is a good deal and millions of new vehicles are sold every year by our French manufacturers…The watchword, “HAVE PLEASURE”! there is always a good excuse to take the plunge and free the wallet! Here are the good excuses to buy a new car, ie at full price: – There are fewer problems! – It breaks down less! – It’s guaranteed! – No risk of unpleasant surprises! – There are no unexpected costs! – It sells better! “She has no faults! – It will sell for more if it has few kilometres! I could well continue with dozens of lines like this, but I intend to keep it short!
There is only one question to ask. Especially if you are reading this article to gain your financial independence as soon as possible:
Can i afford this vehicle?
Many people think they can afford a car for 15, 20 or 25,000 euros, but if these same people were now thinking in terms of time spent at work to pay for their vehicle, the story might be very different. Let’s take a small example to start with:
A couple earns 4,000 euros per month , which isn’t bad at all, you might say, or annual work income of 48,000 euros. The family is growing very soon and to fit the pushchairs (or “THE” pushchair), you now need a family vehicle such as a 7-seater minivan! Not enough savings, no problem. Credit organizations are there for that and offer unbeatable rates: 3.8% TEG over 7 years! The purchase is therefore programmed for a total of 29,000 euros (excluding options of course)
Total of the operation: Cost of the purchase: 29,000 euros Interest over 7 years: 4,073 euros Monthly payments: 394 euros
Without going into the details of the possible resale, this couple has just accepted that one of them works almost 17 months to have the pleasure of having a new car! Is it reasonable? Probably not !
Another important point, a new car loses between 25 and 30% of its value in the first year, so our couple loses around 7,000 euros in 1 year, or 15% of their annual income!
And we are not talking about the purchase of a classic car which can increase in value and which is the satisfaction of a real passion for automobiles. Here we are only talking about buying a regular car for transportation! At 29,000 euros, second-hand, there’s enough to afford a dream car, don’t you think?
Why this article then? Can’t we please ourselves?
The question is not there. Everyone is free to choose, but they know what they want: – Either you want to consume now, have the most beautiful objects and we cross our fingers for the future… – Either you take charge of your financial life by not buying CASH PITs! A little story that is not mine to illustrate my point:
“Three cars follow each other on a small country road, an Aston Martin, a Porsche and a Renault. The first slams on the brakes to avoid a dog on the road and stops without damage. The second also stops without a hitch while the Renault, unable to stop, carries away the 2 other cars! The owner of the Aston gets out and complains: “It will take me a whole day’s work to pay for the damage! “. The owner of the Porsche exclaims in turn: “Two weeks of work to be able to pay for the repairs, damn it! “. The owner of the Renault then exclaims: “don’t talk to me about it, I’m going to have to save for at least a year before paying for the repairs! “
It was then that the two other drivers retorted: “It’s not okay to pay for such an expensive car! “ It’s a bit of Canadian humor but I think you understood the meaning of this story!
To seek financial independence, there are essential elements to master. These are in particular all the useless temptations which divert the savings intended to be invested towards common consumer goods which lose a lot of value over time. The ideal would be to be able to set aside or invest at least 10% of your income from the moment you start working. The reality is very different and the material temptations so great that few of us arrive at this figure.
Save at least 10% of your income to invest it!
Going back to the vehicle, I’m currently driving a car that has 258,000 kilometers on the clock and I could afford to change, but what’s the point of changing when the car is fun to drive, should I change for the sole reason that my wheels have done a certain number of kilometres?
In the collective imagination, many believe that a car self-destructs after 70 or 80 thousand kilometers. Outside, we find all these cars that disappear from France, in Africa with very often 500 or 600,000 kilometers! Why don’t we put a tachometer on the washing machines to change them to 5 million revolutions in this case! For cell phones, computers and televisions, no need for a meter, they are outdated before they even leave the store!