Another reason to buy that car with cash
Are not two sparrows sold for a cent? And yet not one of them will fall to the ground apart from your Father. But the very hairs of your head are all numbered. So do not fear; you are more valuable than many sparrows. Matthew 10:29-31
Several years ago, we made a dumb decision to take out a loan in order to purchase a car. It was a relatively sensible used minivan, nothing extravagant, but I have regretted the decision ever since. Fortunately, our car has held up well and we have had no more than the usual types of repairs. :twists fingers and rolls eyes heavenward:
Our loan is scheduled to be repaid in less than three years, I will be on pins and needles until that happens. A blown engine, a collision, a deer in the highway and we could be in a world of hurt. I am working on leaving this particular bit of worry with God.
I was speaking with a friend in church yesterday and “Tim” mentioned yet another possible event for me to add to my bucket of worry – remember that storm that we experienced back in July? Well, my friend, Tim’s car was outside during the hail and took on major damage. So much so that the insurance company totalled his car – even though it still ran perfectly. No windows were broken, not so much as a tail light – just dents from stem to stern.
His car was financed at around $7,100 and the Bluebook value was set at $6,500. Tim had full insurance coverage as required by law, including gap insurance (covers the gap between the amount financed and the actual value of the vehicle).
Here is what happened: the insurance money went directly pay off the loan and the insurance company towed his car away. There was nothing he could do – he offered to purchase the car back from his insurance company and he tried to talk them out of totaling the vehicle to no avail. They told him that they plan to tear the car apart and resell it for parts. Tim then offered to purchase all of the parts at once, before they towed it. They appreciated his sense of humor, but no dice. I understand the why’s and wherefore’s of this situation, but I was wondering if any of you have experienced this type of thing?
And the moral of the story? Do not purchase a car with credit! Swallow your pride and save up for a sensible, reliable vehicle that does not come with anything having to do with APR’s, monthly payments, gap insurance or “notes” and start saving up for that next vehicle. If something goes wrong, you will not be stuck with no transportation or worse – making payments for a car that no longer exists.
Photo by pheanix300