Alien Owned

Imagine that you finally landed that plum job with the prestigious company that you’ve been pursuing for four years. Further imagine that in addition to the increased salary and improved health insurance this company offers you an interest free car loan. No hidden fees. No gimmicks. The loan is truly interest free and payable in 48 monthly installments directly deducted from your salary. Further imagine that your current car is increasingly unreliable, expensive to repair and barely able to carry you, your spouse and your three small children ages 4, 2 and 8 months. Would you take the loan?

I suspect that the majority of people who read this can’t imagine an interest free car loan, however it not as fanciful as it appears. I work for an oil company outside of the United States and this is one of the benefits offered to me. Most people I know here in my host country would read this and respond with an almost unequivocal “Yes!”, unless they had been taught the financial folly of purchasing a car on credit.

My wife and I vowed to live debt-free nearly six years ago shortly after we got married. Since then we have been devoted to our written budget and we have lived on less than we earn. We paid cash for our 1997 Dodge Intrepid and once we pay off the last 8000 USD of an outstanding school loan, we will owe nothing to anyone. Even though we are committed to this alternative lifestyle, there have been times when we wanted to give up. For me, nearly every one of those times has come on the heels of the most recent mechanical malfunction of our car.

We bought this car following the loss of our VW Jetta in an accident and a long, disappointing search for a minivan that we could afford. Every minivan we found in our price range had been either neglected or mistreated to such a degree as to be unfit for the road. There was one exception, but the dealer waited too long to accept our offer thereby inadvertantly giving me time to research myself out of the deal. Our van quest was taking too long so we set a deadline for buying a vehicle that would contain all of us plus an extra child who would come along eventually. The Dodge was an answer to prayer. It was the right price and would comfortably accommodate three car seats across the back. We bought it from the original owner, a member of the church board who was relocating and wanted to sell it, so we felt about as good as we could about the purchase even though it was certainly not a family car in the fullest sense of the term.

During this calendar year, we have spent more to repair the car than we paid for it when we bought it about two years ago. Each time I go to the mechanic, I remind myself of this. Every time I have to strain across one of the older children to put our infant in his seat in the middle of the car, I curse my car’s sporty design. Whenever Son #1 and Son #2 get into a fight because they are too close to each other during a journey, I covet the third row of seating in the minivans peacefully passing by me. Every accidental bump of a child’s head on the roof while putting him into his car seat takes a chunk out of my fortress of resolve to only pay cash for cars. When I am at my lowest the only thing standing between me and the rapturous joy of owning a minivan is a principle. Thank God.

Principles make life much easier to live. You see, I have adopted a principle: I will not use credit any more. That’s it. If I can’t pay for it in cash, then I don’t get it. As uncomfortable and unpleasant as I (and my children) find my circumstances, I like them better than the alternatives. Imagine if I took the loan, then before the minivan could be paid off I lose it in an accident. Not only do I not have the use of the vehicle, I’m still having the monthly payment deducted from my check. Sure, there’s a chance that insurance would cover my loss, but in this country the chances are much greater that it won’t. (Expats are generally at fault regardless if an accident involves a local. No, not fair, but that’s how it is.) Even if I don’t have an accident and lose the vehicle, I’ve got 48 months of receiving a lighter check. Some months I might not notice it but during those months when the van has to be repaired (and it will need repair because it’s a machine) I would really hate those reduced salary pay slips. Furthermore, as the minivan decreased in value over those 48 months and wear and tear increased, my payments wouldn’t decrease. I would continue to pay the same for something that was increasingly worth less. Finally, I couldn’t bear to look at myself in the mirror or be seen by anyone who knows how intense I am about refusing to buy a car with a loan. I would be mortified by my inability to hold on to my convictions in the face of temptation. You see, I know deep down that the rapturous joy of owing on a minivan is not preferable to the quiet contentment of owning one…after I’ve saved the money and paid cash for it.