Shek's Footprint

Until the housing bubble burst of 2007, for most people, the most expensive depreciating asset that money could buy, or rather borrow, was a car. I am not referring to the people that own boats, priuses and exotic cars. When you did get tired of driving the same car, you went to the dealer and haggled with the price of your trade-in. If the Salesman and the Finance Manager played their cards right, you walked out feeling that you got more for your old car than it was worth and the happy dealers went home selling you an overpriced car. Both parties were happy and the vicious cycle of car ownership, maintenance, blood-sucking car insurance payments and sanctimonious petrol buying continued.

Since the housing buble burst, we have come to know a new term called sub-prime. The neat little unassuming term makes drowning home ownership look like a minor technicality. The car-sale industry uses a different term to keep our minds off the obvious problem that cars often depreciate faster than they can be paid for. Upside-down. Another little unassuming term. How about we all call the bull shit and tell people that these assets, the pillars of North America’s economy are usually worth less than money owed on them?

To avoid people from shying away from monster car-loan banks like GMAC, dealers politely explain the new car owner that he is ‘upside-down’ on his old car, so the difference will be effortlessly tacked on to the purchase price of his new car. The not-so-lucky-new-car-owner takes it with a pinch of salt, grabs the keys to his new car, sub-prime from day one and goes into a deeper circle of more debt than equity.

I ended my debt today. CarMax took my car for a decent retail price that was about one thousand dollars more than I had expected. I paid the difference between the retail and the loan remainder and walked off the parking lot completely and absolutely car free. That means, no payments, no insurance, no gas, no maintenance, no new tires, no road rage and above all, complete independence from this addiction.

This entry was posted on Friday, October 17th, 2008 at 9:54 pm and is filed under Car Free. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.