Selling your car might seem like a wise move when you’re experiencing a financial crisis and in some cases it might actually be. However, as a general rule it will prove advantageous to hold onto your car for the time being because your vehicle is very valuable in times of financial duress.
If you have created an emergency fund this where you should be looking for the cash required to get you through the financial crisis you’re experiencing, not your car. If you haven’t yet created an emergency fund and you’re not currently experiencing a financial crisis, create one.
It will prove far more advantageous to have an emergency fund to fall back upon than to sell your car when experiencing financial problems.
If you’ve lost your job or had your hours cut back it often seems a wise decision to sell your car to raise funds, especially if it’s convenient for you to catch public transport or get about on foot or bicycle for the time being.
However, if you need to seek employment elsewhere you should hold onto your car because there’s always the possibility that you might need it for your next job. Moreover, some employers won’t even consider job applicants without their own transportation.
Therefore, it’s in your best interests to avoid selling your car when you’re going through an employment crisis or a period of little work – it could prove to be your ticket out of a financial crisis.
Prioritize Your Spending
Admittedly, cars are a source of expenses – fuel, insurance, maintenance registration, repayments, etc. – but as we’ve all come to realise over the years they’re a necessary expense, and quite often, one we simply can’t do without.
Therefore, you need to prioritise your spending before you actually consider selling your car and although you might need to make certain changes to the way you maintain your car, for example washing and waxing it yourself, you’ll find that this proves to be the better choice now and in the long run.
The areas in which most people’s expenditure arises are housing, transportation and food, so these are the areas in which you should be looking at making cuts to reduce your outgoing expenditure.
This doesn’t mean stop paying rent or loan repayments, though it does mean looking for ways to reduce your rental or repayment costs, for example renting out a spare room or your spare parking space to a neighbour.
There are often ways to reduce your transportation costs without having to sell your car. For example, walking to the shops rather than driving, taking public transportation if it works out more affordably, and carpooling with colleagues.
You can also reduce your outgoing expenditure by eating out less, reducing the amount of food you throw away by shopping more discerningly and opting for budget brands.
Making changes in these areas could help you to avoid selling your car during a financial crisis.
Capitalizing Upon the Value of Your Car
Your car has fiscal value and you can capitalise upon its value without selling it, like taking out a competitive logbook loan from Car Cash Point or using it as collateral for a secured loan through your bank or an online lender.
However, it must be said that if you decide to capitalise upon the value of your car by using it as collateral, you need to have the means of meeting your repayment commitments otherwise you could lose your car and incur a bad credit rating.
Your car is incredibly valuable during a financial crisis – use it to your advantage.
About the Author:
Find a quick and easy way to get some cash from your vehicle at Car Cash Point, a firm that offers logbook loans for anyone looking for a quick solution to their financial needs.