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The Bank of Nova Scotia Message Board

  • mroleandn2000 mroleandn2000 Feb 11, 2013 12:03 PM Flag

    Recent "Debt" Article...

    None of its contents are surprising, but there's more than meets the eye behind stories such as this:

    IMO, the article out on "auto debt", shows that appearance is more important than fiscal responsibility. As a bank shareholder, I don't have a problem with my investment collecting the interest on the chattel mortgage issued for these purchases, however.......

    Vehicles are by far the absolute worst money you can spend. What else depreciates by at least 25% the moment that you buy it, costs you money to own, money to run, money to insure, money to maintain? I believe that most of these sales are actually leases that'll end up on the lot after the lease period is over.

    After having spent thousands and thousands of dollars on these money-losing purchases, they'll all end up on the used car lots, with the original purchaser having absolutely no "asset" (regardless of its hugely devalued price) to their name after the lease period expires.

    On the other hand, people who actually purchase vs. leasing vehicles are extending the payment period out to 72 or 84 months. By that time the value has dropped by approximately 60%, the warranty has expired, it starts to break down and people start to think, "Hmmm, I think I need new wheels.".

    People can't get past the "no money down", or "no interest" deals that are out there.

    Thus the cycle begins again.

    It's all about appearances. The debt-poor strive to appear cash-rich.

    The best vehicle deals out there are from low-km trade-ins, where someone else has already bore the brunt of the huge drop in value once it was driven off the lot and all the mechanical failures have already been taken care of under the warranty (or there's a portion of warranty left).

    Yet another thought-provoking post for this dead board.

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