How To Prevent Personal Financial Troubles: Part Two

The good thing was that I didn’t take a loan to buy it. I paid in cash from the money I’ve saved. Everything else about this decision was terrible considering my situation.

I bought a new, subcompact car with two doors, pretty similar to the car I’ve already possessed in terms of size and usability. And I’ve spent almost all the money that I’ve saved.

My First Car Purchase - The Wrong choice

What made me decide that way? I thought something like this:

And the reality turned out to be totally different. I didn’t change it in five but in fifteen years, and I didn’t need it just for my girlfriend and me. I’ve needed it for my family as I’ve got married in the meantime and got two kids. You can only imagine how it was like to seat and fasten two kids into their car seats using only front doors on a small car 🙁

What went wrong? I didn’t invest some serious thinking about the kind of car I need in the first place. I didn’t try to see myself in the situation five or more years ahead. On the contrary, I’ve made a decision based only on my current circumstances.

Obviously, I did need to change my old and unreliable vehicle, but did I have to buy the car of the same functionality and spend all the cash I’ve saved?

No, I didn’t. If I would think of it really carefully, I could come up with conclusions that sound like this:

My Second Car Purchase - Got It Right This Time

I’ve learned my lesson. It took me fifteen years to get to the point where I could take a different move using intelligent decision methods.

After it became clear that it is really time to look for a new car, and some funding appeared, I’ve bought a used family car.

I’ve invested in some serious thinking this time before I’ve made my final decision:

By knowing the kind of a car I wanted, its primary controls, and accessories, I investigated the available models that fit my prerequisites. I wasn’t in a hurry, and I was slowly making my decision, choosing between three or four models on my shortlist. When I’ve decided on it, I knew that is the model I want.

When it comes to buying a new car or the used one, I researched here too. The new vehicle instantly loses at least 10% percent of its value in the moment of purchase - it is the law of supply and demand. After you pick up a new car from a dealer, you get 90% of its original price if you try to sell it immediately after purchase. And it loses another 20-25% of its initial value every year.

After all, if you are buying a new car, the advantage is a guarantee period and brand original condition. The disadvantage of buying a new car, besides the price, is the possibility that it has some serial manufacturing defects. This is a common situation if you buy a new model replacing the old line.

A far better decision, in that case, is to buy a redesigned model, which is usually on the market three years after the new model has been released. During that period, vendors eliminate identified defects.

Buying a used car

I didn’t want to repeat the old pattern of spending all the available money, so my budget was limited. Knowing my budget and the car model I wanted, I chose to go for a used one, since I couldn’t afford it in a new condition.

Finding a used car with preferred options can be a tedious task. When you decide to go for that option, you need to tell yourself to be patient.

I’ve spent roughly two months searching online selling channels on the domestic market and abroad in neighboring countries. Finally, when I was almost sure that I would go for a car abroad, the one fitted perfectly to my expectations showed up five kilometers from my home. 🙂

I didn’t wait for somebody else to pick it up in front of me, so my wife and myself went to see it immediately. We liked it - it was exactly what we wanted, and we were on the go!

You have to be aware of a few essential aspects when you search for a used car:

Before I’ve decided to purchase that car, I drove the vehicle to an authorized service center and paid for a complete condition check.

Although the typical case is that people bring some friend who knows about the cars or maybe a mechanic who is servicing their old car, I prefer the authorized dealer for this kind of check.

They have the vehicles database they have been serviced in all their network. This includes all countries with maintenance centers, which is essential if you buy a car imported from abroad. Using vehicle chassis number, they can check if it has been serviced regularly in their network, the failures, the status on kilometer clock in the car matches their history, etc.

Since today’s vehicles are equipped with tons of electronics, connecting them to the diagnostic device in the authorized center will also show the status of all car systems and possible errors.

After I was convinced that the car is in excellent condition, I dealt with the seller.

The car was five years old at the moment of my purchase, and I’ve paid about forty percent of its value compared to the price of a brand new one. I’ve got the original receipt from the first owner, so I know exactly how much he paid for it, including additional accessories.

Conclusion

I’m grateful for the experience of My First Car Purchase. I was able to look back on long term negative consequences of that purchase and use that experience as a lesson.

I’m delighted with the achievement of My Second Car Purchase. And here’s why:

The process included my goal setting and defining a list of actions that led to goal achievement. I’ve used this process not just for the purpose of easier follow up of my plan, but for a reason, it gave me the confidence and trust that I’m going to achieve my intention. Once I’ve set that goal in front of me, I knew I will not give up until making it real.

Top Tips

Here are the vital tips derived from the learned lesson that I’ve applied on my second car purchase, and that can be used by you also:

• Take the time to perceive the situation in which you are right now.
• Don’t be so sure that you will be able to change your car in three to five years. You can not be sure what life brings to you and what other priorities will emerge.
• Imagine yourself in five, ten, fifteen years from now. Imagine what can change in your life in that period and how it can impact your transportation needs.
• Talk about it with your partner, a friend, or parents if you still live with them.
• Be sure that you have done real intelligent thinking about your current and middle to long term situation and that you have involved the closest people around you in your decision.
• Define the budget that you can afford for buying a vehicle.
• Set a goal for yourself of purchasing the car.
• Define the list of actions that will lead you to goal achievement.
• Have your goals and actions in written form where you can follow them up and revise.
• Define the actions deadlines.
• Once you set your goal, define your list of actions, be confident in yourself, and know that you will make that purchase.
• Follow up the actions regularly and mark the dates when you complete them.
• If you come up to some point that demands your decision during the process, record the question, and set the resolution deadline. After you decide, record the date of the resolution and the decision you’ve made.
• Once you place your goal and actions, expect that you will notice, feel, and experience synchroneities that will lead you to your goal achievement. It is inevitable as your determination and positive vibration will attract those synchroneities in your life.
• Acknowledge the synchronicities, welcome it, and when you feel the urge, act bravely from your gut!
• Complete the actions you’ve set and made your goal real!
• Document the dates of the goal achievements and compare them to the planned dates.
• Celebrate!

Part One ↔ Part Three