The used car market is one of the few that have seen a boost with this credit crunch. At a time when people are looking to save money and only buying the necessities of life, and cars come under that category, many industries are feeling the pinch of people withholding finances and directing them towards absolute essentials. Those feeling this withdrawal of disposable income are new car dealers.
Cars have become one of life's necessities and are no longer a luxury. But when is there ever a good time to buy a new car?
Unless you are a fully paid up member of that elite club of the uber rich, then a new car that doesn't belong to a company fleet is always going to be one of those one off, probably spur of the moment buys.
However, given the economics of the day, even spur of the moment purchases are being sharply reigned in and car dealers are feeling it with the empty show rooms and depleted bank accounts.
Not so for the used car dealers. Everybody needs a reliable form of transport and cars are certainly something that needs keeping on top if they are to stay reliable. Cars are not built like they used to be. Everything is meant to be a disposable commodity these days and there will come a time when that car simply gives up on you. Replacing it can be difficult and costly.
So, you have three options. Buy brand new, buy second hand from a private seller or buy from a used car dealer.
As already discussed, the brand new option is for those who have more money than they need. These people, today, are few and far between and would have no need of this article. Buying second hand from a private seller is an option and it is usually the cheapest one. However, it is also the riskiest. Scams are set up all around the country for so-called 'private' sellers to pass on cars that have been stolen or 'cut and shut' vehicles which are extremely dangerous.
False documents are used to pass the car on immediately and before you know it, you're pulled over by the boys in blue for driving a stolen vehicle, you find your documents are false and you lose your car and your money. Try to go back to the people you purchased the car from and you find that they have disappeared. Of course, this is not always the case and you can bag yourself a bargain from a private seller if you know what you are looking for. Just remember, the moment you drive that car away you have no recompense whatsoever for any problems you find with it after that date.
Buying from a used car dealer is a little more expensive but you get more security for your money. Certain checks have to be made on the car before it can be legitimately sold and a guarantee covering the basics will be made available as well as having the added luxury of a thorough clean!
If anything should go wrong with your car in the first three to six months, you can return it and get it sorted out quite promptly. Checks can be made, by the used car dealer and by yourself, to ensure you are getting a legitimate used car with genuine paperwork. So, it would appear that this is the safest option when replacing your car, particularly during times of hardship.
Debt management is not just a term that financial advisors use when their clients are in trouble. Controlling debt is the best way to stay away from costly mistakes spending and borrowing money without keeping in mind factors such as, buying with cash or credit, loan terms, interest rates, refinancing and so on.
On the other hand, there is good debt and bad debt. Borrowing money to pay for a college education, or buying a home, is considered good debt because you are investing in personal assets that over time are worth the extra expenses and can have life long benefits. However, bad debt comes mostly from indiscriminate credit card usage, particularly among teenagers, but nobody is exempt here.
It is never is too late to learn how to budget, save and avoid costly financial mistakes. I realize that most everyone hates the word, Budget, however, it really is what brings financial success. It is a compass, a guiding light, a path towards where you need to go to achieve what you want in life. If you were going on a trip by car to somewhere you had never been before, would you bring a map ? Of course you would. Otherwise, you would get lost and end up in frustration and wasted money and time. A budget is a map that leads you to where you want to go financially in your life. If you do not have one, you will surely regret it sooner or later.
Financial planning is one of the best things you could ever teach your children as they are growing up. Remember, that vacations, consumable items, and similar things are considered bad debt, especially if you are charging your credit card instead of applying for a loan, or getting money from the equity built into your home to pay for the things you need.
But when it comes to necessary outlays, everything depends on your approach to managing your finances adequately to repay the money you owe. Checking success histories of wealthy people you will find out that many of them borrowed money to reach the status that they actually have, but controlling their expenses instead of sinking into bad credit situations was one of their secrets.
Determining whether you can pay for goods over the next few months or year or not, makes sense in controlling your debts. If you borrow money or buy items with the idea that credit is for acquiring what you cannot afford with cash, you are digging your own road towards ruin. The larger your ogligations with no solid logical basis, the greater your chances are for financial disasters in the future.
You can use this to your advantage, managing amounts owed over time. If you have not set up a budget for your household expenses or your office operation, begin tracking your spending for the next few weeks. Knowing where your money goes makes it easier to manage.
Most people know where their money comes from, but very few know where it goes after receiving their paycheck. Subtracting taxes and all your monthly fixed and variable expenditures, you can have a better idea on how much money is available for paying off your creditors. Consider fixed expenses and all the payments that you have on a regular basis, such as food, utilities, transportation, insurance, housing, and so on. Take your income and subtract these amounts and that leaves you with the cash you have to pay off your indebtedness.
No matter how important entertainment is for you, this and other things such as restaurants, trips, or shopping, must be watched closely to control spending efficiently. Once you determine the amount of money available for paying off your liabilities, then you will know if you can afford to borrow money for getting assets that increase in value, or in other words, good debt.
Always keep in mind the real cost of credit cards, and avoid purchasing items that depreciate in value. If they are absolutely necessary, get them, but use cash instead of credit if possible. The same holds true for consumable items - buy with cash, or if you have to use plastic, be sure to pay off the balance each month. Controlling debt is easily achieved by controlling your expenses, and following a personal budget, which in the long run helps you to keep or improve your Credit Score and your prospects in life.
Both Catherine Harvey & are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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