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Car Ownership Mistakes To Avoid

  • admin
  • October 16, 2014 10:46 PM

Oh what a tangled web we weave…and so on and so forth. You know the drill! One of the biggest problems facing consumers today and written about in personal finance is the ability to repay what one owes. With seemingly low-interest rates and a society hopped up on instant gratification, people often adopt a “we’ll get to it eventually” attitude and take on more financial responsibility than they can handle, i.e. a car that is too expensive for them or insurance they can’t afford. Unfortunately this attitude permeates the realm of car ownership and produces long lasting, uncomfortable ramifications. Below, we discuss two of the primary offenders when it comes to car-related financial negligence that affects your credit score (and conversely, the quality of car insurance available to you). This information is age and experience neutral – no one gets off! It’s important that while we are all on the hunt for a good deal for our money, and that we honor our fiduciary commitments. Car insurance is one of these commitments, and so is the car loan! Have a read, and even if this doesn’t fall in your garden, pass it on to someone you know could use the stern talking-to!

Getting a ticket…and then some!

If you are ticketed for traffic or parking violations, while they can very well affect your insurance premiums (based on prior ticketing history), they will not show up on your credit report. But let’s say, for discussion’s sake, that you decide you’re not going to pay that ticket because of some reason. Like, that copper profiled you! Or he wasn’t even there, this isn’t fair! You still have to pay that ticket. A traffic or parking ticket is like a seed, and rolled over fines get sent to collection agencies, and suddenly you’re under that branches of steep fees and nasty blemishes on your credit report. It should also be noted that it doesn’t take a straw to break this camel’s back – regardless of the circumstances leading to non-payment, or the amount – collection accounts spell bad news for your credit score. Drive clean and pay your fines!

If you’re borrowing…make sure you can pay it all back!

As we’ve indicated in several posts prior to this, buying a car is a serious endeavor, the considerations of which extend beyond just the car purchase itself. One primary factor is your ability to meet the commitments of your car insurance policy. Thinking about driving without car insurance? Sure! Just let us know how the view from your cell is…Additionally the loan you take to purchase your car, can actually do damage to your credit score, if it is managed poorly. For parents who are co-signing car loans to help get their kids behind the wheel, you can look forward to this being recorded as YOUR deficit completely on your credit report. It is important to remember when budgeting that expected costs must be integrated into your money-allotment strategy. If you can afford the car but not the car insurance, no go. If you can afford the car insurance, but not the car payments, no go still. Even if you think you can wing it by neglecting any payments, keep in mind that repos stay on your credit report for 7 years. Make sure you can afford the responsibility of having a car. Borrow smart. Buy smart. Insure smart. Repay. Keep it simple!

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