Here’s the latest reader question, along with my reply!
Dan asks: I just read your column on the state of the used car market and have a question. Do you think it’s foolish to buy a new car – entirely on credit – on the assumption that the economy (the country) is going to collapse after the election and then just drive the thing until it’s repo’d? I mean, what have we got to lose at this point? I’m thinking this way because I don’t want to use up what cash I have on a car when I could use it to buy other, more important things. But I do need a car because my current one is about rusted out.
My reply: When someone picks up the board and throws the pieces all over, the rules of the game no longer apply. Ordinarily, I’d take the position that buying anything on credit – and assuming debt – is a very bad idea. You’re in hock to some entity, which now has a leash around your neck. Having to come up with the funds to make those payments makes you dependent on whatever job you’ve got and today that can mean having to submit to degradations such as the Face Diapering of your face. If you fail to keep up with your debt, it means you get hounded by debt collectors and blackballed by credit reporting agencies, which can make it very difficult to get a job, even, as many employers do a credit check as part of their vetting process.
But these are not ordinary times. The whole thing is coming unglued. Accordingly, it might be very sly to husband your cash – or spend it on the things you really need, while you can still get them – and let credit finance your wheels.
You may even end up with a free car, if the whole thing completely unravels. And if it does, the very last thing that will matter is your credit rating.
. . .
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