If you plan on buying a new vehicle stick to your budget and don’t be fooled by slick advertising.
Let the good times roll – many Americans are planning to get a new car this year. In a recent survey, 55 percent of adults reported they will buy or lease a new car in 2014 – up from 52 percent last year. That’s according to Huntington Bank’s Second Annual Midwest Economic Index.
“We’re projecting an increase in auto sales in 2014 as consumers’ needs align with a buyer’s market,” says Rich Porrello, director of Huntington’s Auto Finance division. “And we’re witnessing tremendous consumer enthusiasm at sponsored auto shows across the Midwest in response to the increasing sophistication among manufacturers that are pushing to define a whole new generation of cars and trucks on the road today.”
Considering the average cost of a new car or light truck is now hovering around $30,000, it’s an expensive enthusiasm.
Of course, this wouldn’t be the first time that consumers are convinced to buy over-budget by the auto industry. Look at how many Americans bought into the SUV message – it’s safer for you and your family, you can haul everything you need, and drive in any terrain. How convenient. They bought into the image created by the advertisers – the advertisers persuaded them that they could not afford to not buy the vehicle.
The credit counselors at Consolidated Credit advise clients to consider the costs outside the sticker price – such as gas, maintenance and insurance. If you can’t afford to maintain and drive the car, as well as afford the monthly payments, then a new set of wheels is probably not a good investment.
After all, if you don’t have the cash on hand, where does it go? Usually on a credit card.
“It may not be the most common reason for financial distress, but we often get clients who wound up in trouble because they purchased more car than they could afford,” Gary Herman, President of Consolidated Credit points out. “They bought something because they could just barely afford the payments — not taking into account potential increases in gas costs and maintenance. Those budget gaps inevitably end up on a credit card.”
If your credit card bills are driving you to the poorhouse, call a certified credit counselor or request a Free Debt Analysis online. You can be back on the road to financial freedom in no time.