Is this how we are being brought up? Learn how to drive in your parents car, get your license, find the car of your dreams and get a car loan, then spend the next 10 years paying it off. I'm not one to judge, however I do find it intriguing how much we as a nation have changed over the years. Back in the industrial age you would either get your pops truck or work hard and save your money, and then purchase a car in full, most likely it being a used one for your first car. Now it's sign on the dotted line, get now and pay later with interest, not to mention their hands just inches away from crushing your throat if you refuse or "forget" to pay. Should this be the way, should we teach our kids to have now, before earning it and understanding appreciation?
Personally, I don't drive as yet however, I see logic in saving up a few thousand to buy your first car out in full. From my readings and understanding, chances are most young adults will "accidentally" forget to pay on time and will get slapped with a hefty bit of interest. Don't get me wrong, credit in this world is not only needed but it's important to wealth. I just feel we as consumers rely on credit cards and personal loans too much because we have this mindset of "want now" and as you can see, this has clearly caused trouble.
A car loan would be beneficial if claimed under a business as it would eventually pay itself off. From my point of view, you should only consider applying for a car loan when you have the following Why, What, When and How worked out:
1. Why do you need a car loan? - This is a serious question, think outside the square for a moment.
2. What car loan suits you best? - Many to choose from, find which one works for you.
3. When will it be paid off? - Knowing a rough estimate on when it will gives you a goal.
4. How much interest will you be paying? - 5 years might be easier for you but harder on your pocket in the long run. Think this through.
Most people will act on their emotions - i.e. want now - and not consider their current circumstances. By analysing your situation, how much you can afford and how quick you can pay it off, your removing your natural emotion and starting to think like the rich.
If you need a car loan, I would recommend comparing various car loans to find the best one which suits you. You can do this by searching car loan in Google, Australia - you can compare and apply for a car loan online.
Andrew Knight is a regular writer on his blog, Andrew Knight about Personal Finance, Modern Life and Technology. He discusses topics like Saving Money, Not Being Frugal and general human emotion.
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