If You Are Making Car Payments, You Don’t Own The Car

by The Happy Rock on September 17, 2007

We usually talk like we own the car, but this is just a delusion. If you secure financing for an automobile, the bank or financing company probably owns your car. The person with the auto loan is most likely granted non-possessory security interest in the vehicle. Basically, the bank owns the car and you are not able to sell the car without the loan being paid in full.

mustang-vintage-red.jpgThe reason I mention it, is to clear up what I think is a major reason it is so easy to be in debt. The lending industry wants debt to sound rosy and cheerful, so that consumers will go into more debt. If we continue to fool ourselves into thinking we own things that are not actually ours, we will continue to by more things we can’t afford. Yes, I said it! If we are paying payments, we probably couldn’t afford the item. We delude ourselves by affording payments!

If you think I am crazy or sound foolish, you probably never received the title to a car in the mail after you made your last payment(or paid cash in full). It is just a piece of paper, but it feels so good for some reason.  I would love the world to change how they talk about debt. Let’s talk more about the great feeling of working hard for something and paying for it in full, rather than tricking ourselves into thinking items that we don’t own are ours.

{ 5 comments… read them below or add one }

Double Eagle September 18, 2007 at 12:37 am

This is dead-on accurate. People have come to accept debt as a part of life. I know I’m guilty as charged.

I woke up to the car payment issue a while back and have always intended to pay cash for cars from that point on, but I don’t think I’m going to be far enough ahead by the time I’ll need to start looking again.

However, I can promise you that my next car buying experience will be completely different than previous ones. I can’t see myself even considering a new car again for the foreseeable future. $5k cash (if I can do it) for something “good enough” is going to be in the front of my mind.


SavingWithMe September 18, 2007 at 9:19 am

Awesome post. Hits home the point that just because you can afford the “monthly payment” does not mean you can afford the item. I am making it a point that my next car I will pay for in cash. I had a friend save up for a brand new Honda Accord and pay with cash completely and in fact he has never had a car payment in his life. He either drove old cheap cars or saved up and bought quality, brand new.


Mya Moola September 24, 2007 at 2:19 pm

It is similar to houses, eh? As a renter, I’m constantly bombarded with homeowners who like to brag that they are not “throwing away money” on rent because they, unlike me “own their home.”

Beyond the fact that I have zero desire to own a home at the moment, the simple truth is, you don’t “own” anything until it’s paid in full. That holds true for me anyway, I won’t feel like I own a home until it’s mine in full and no bank can foreclose on it.


The Happy Rock September 25, 2007 at 12:09 pm

@Mya Moola – Yes houses are kind of similar, so changing the language does apply there.

Don’t worry about not owning a home, there are many many great reasons that renting makes sense.


Neil April 17, 2009 at 5:10 am

I think what you say here is true and you do have a point. But i have to ask, what if there’s people who do this because they need the car urgently and can’t wait till the save up enough cash to go out and buy one.
I think as long as you think hard about your monthly income and what you can afford and see the potential disadvantages of debt etc. if you are willing to take the chances and you have an outcome. It’s ok. It is not ok however to go out, see a car and and immediately go for it without question.
But as i say again you do have a good point but i think you would be ok if you think of what will happen when you do it.


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