Too often Americans define themselves by what they see in their driveway.
This pre-occupation forces them into debt in order to operate a car they cannot afford.
Carefully notice that I use the word, "operate" instead of the word "own" because most of the time these folks will never own the car in their driveway.
The bank owns the car and they operate it for the price of a burdensome loan and a lot of interest.
This cycle leads to an increasingly downward spiral in automobile debt because finance shops are willing to roll over debt into a bigger loan for a newer car.
Two years after this second car is off the lot the loan has been reduced by a fraction but the value of the car is reduced by half.
Now the consumer with the glimmer of chrome and polish in their eye hold an asset worth half the loan they owe and perhaps cannot afford.
Should a working family pay one sixth the cost of a home for a vehicle? The median price for a home in the United States was $171,000 in November 2010 according to data accumulated by RealEstateABC.
com.
According to the Federal Trade Commission the average price for a new car in the United States is $28,400.
Therefore, the cost of a new car is one sixth the cost of a house and depreciates three times faster.
The foolish decision to commit so much money toward the purchase of a vehicle is driven by the media blitz on new car models, the pressure of pop culture and perhaps the everlasting American fascination with cars.
Ignoring these intense social and internal pressures is difficult, but it is exactly what every American working to get out of debt should do.
There are great cars out there for under $5,000.
Every time I say this in public folks look at me like I am crazy, but I challenge them.
What makes a great car? I contend that a car is a tool in the modern family with a specific and limited purpose just like the dishwasher.
It serves the purpose of getting the adults to work.
It facilitates getting the children to school for an education.
It allows access to vacation destinations and family gatherings.
The car is just a tool that needs to operate safely and reliably.
Media pressure has imprinted the idea that a car must be new and flawless, but this is all hype.
Imagine if there were so much media attention to the functions and polish of a lawn mower.
It would seem ridiculous, but so many of us have been conditioned to believe that a car with a scratch is somehow flawed.
In truth a scratched car is perfected because its price is lowered dramatically while its usefulness remains constant.
So if getting debt free is on your "to do list" then start by taking a look at your driveway.
Re-orient how you view the purpose and value of your car and find a car for $5,000 that delivers all the things you need your car to do without any of the high dollar fluff a dealer will want to sell you.