Gas(oline) Pains, Pick-Ups, and the True Price of Freedom

“We think this is the American dream, of driving your car fast, seeing what it can do." 

--- Michael Kaplan

How much are Americans truly willing to spend, and to sacrifice, in order to attain and keep those things that always, in the past, defined the "American Dream"? If recent trends are any indication, quite a bit. Certainly, the methods have changed with the times, but somehow, some way, Americans continue to cling to those values with which they were raised.

A recent article from The Denver Post reports that despite gas prices having risen precipitously from the beginning of 2013, car sales have risen, particularly in the area of truck and SUV sales. Why, with gasoline prices projected to top $4.00 per gallon by the summer, would Americans purchase vehicles well-known to be gas-guzzlers?

As is tradition among people raised in a particular culture, Americans feel the need to maintain the status quo, regardless of the consequences. While joblessness has risen and new opportunities have waned over the past years since 2008's economic collapse, Americans have overwhelmingly found themselves in a position of belt-tightening. While you can take away the typical American's ability to buy a new truck every year, however, you can't take the old standard away from the typical American; as with the shift in many demographic groups from healthier, more expensive food to pre-packaged, overly-processed convenience goods, we learn to sacrifice quality in order to have some semblance of our original dream.

Instead of forsaking long-held aspirations of a sprawling ranch in the country and a new Ford F-150 gracing the driveway every year or three, Americans are taking longer to pay off their new cars, now taking, on average, 6-7 years to pay in full their new cars, as opposed to a maximum of 5 in years past; this, in turn, means that most Americans will buy fewer cars in a lifetime than our predecessors did. Smaller monthly payments, however, do not a lower overall total create.

Unfortunately, while spreading car payments over a longer period of time will decrease monthly payments perhaps by a sufficient amount to leave a little extra in the buyer's pocketbook, this practice is also accompanied by higher interest rates, particularly if one's credit is low (as is now the case with many Americans, thanks to the 2008 recession and its aftereffects). As if this weren't penalty enough, those people fortunate enough to have the money to pay off their vehicles in a shorter time than their contract allows may be hit with steep prepayment penalties; those who fall prey to rampant layoffs, contrarily, may find themselves without a vehicle after spending five years paying the majority of the loan.

Inevitably, the case may not be that the average American, watching gas prices soar with no ceiling in sight, is not foolhardy in his/her decision to purchase a less-than-fuel-economic vehicle, despite a volatile market and looming second recession. We can make decisions, after all, based only upon what knowledge we currently possess. Statistics show that Americans are, in general, more inclined to make vehicle purchases based upon what makes and models have worked for them in the past; therefore, while a hemi-powered Dodge Ram may not be the most economical in terms of fuel consumption, a man whose previous purchase of this vehicle resulted in ten-plus years of faithful service and safe transportation is making an educated decision, knowing from experience he won't be trading it in for a different car when it begins to have problems before the loan is even repaid.

What if, however, there were another option for car financing? What if all those penalty fees and interest could become money in your gasoline fund? What if, rather than trudging through the arduous process of applying for car loans despite bad credit, bearing the disappointment inherent in the numerous denials of that credit, and inevitably settling for an interest rate higher than you can perhaps afford, you could avoid the entire process? Americans have made a valiant effort to maintain their status quo and their ideals of that American Dream to which we all grew up aspiring, but we assume it's us who need to change in order to continue to accommodate our needs. We are mistaken.

To discover the secret that could mean financial freedom to many Americans, click on our logo to the right of this post, and check out our information on Infinite Banking. True, humans can only make decisions based upon the information they have at their disposal; that said, new information can change one's entire perspective and, therefore, his world.

References (click to link to articles):

"American auto sales post gains in February despite high gas prices," Denver Post, 3/2/13.

"Americans buying fewer new cars in lifetime," CNBC, 10/22/12

"New car buyers stretching out payments," CNBC, 9/24/12

"We're driving less, but spending more on gasoline," Bloomberg Businessweek, 2/5/13.