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Subscribe! Before You Become Car-Poor!
By Lee Jun-hyeong Cub Reporter, Senior of Chemical and Biological Engineering
Nowadays, it’s inconvenient to get around without a car. If we go out on the road during morning and evening rush hour, we can see a lot of cars. Just a few years ago, we rarely saw luxury imported cars on the road. However, if we look at the cars passing by these days, we can see many. In addition, a lot of luxury imported cars are parked in the studio parking lots where younger workers and students usually reside. The owners of these luxury cars are often referred to as “car-poor” these days. Let’s check out what car-poor means.
1. What is car-poor?
Carpoor is literally a compound of the words “car”+“poor”. We define people who live in financial difficulties after buying an excessively expensive car, compared to their economic ability. This concept is comparable to house-poor, which is struggling to pay back interest after buying a house with a large loan.
2. What’s the cause of car-poor?
First, our parent’s generations and younger generations have differences in values. There is an increasing number of “YOLO” people who want to enjoy the present rather than invest for the future. If not now, people are buying luxury imported cars thinking about when to drive them. Second, is the quality, which can be attributed to the attention you receive when you are parking a luxury car. When you get out of the car, you feel superior in the eyes of the people around you, and that can be attributed to trying to enjoy their gaze.
3. What’s the process of becoming a car-poor?
Let’s talk about buying a car, BMW’s midsize sedan that is worth 50 million won. If we pay 20 million won in advance, then we have to pay the remaining 30 million won in a five-year monthly installment plan. Also, insurance will be more expensive compared to domestic cars, Other fuel costs, maintenance costs and taxes are also added. As a result, more than 1 million won will be spent on a car alone every month. It would be fine if we could afford this amount. However, the reality is that most younger generations do not have this much economic leeway.
Based on the annual salary of 30 million won, they spend more than 1 million won on cars alone, and if they pay rent, they can hardly afford a house. As a result, after buying a car in installments, the financial burden becomes too high, and most of the time, they can’t pay back all the car installment plans, so they have to sell it. Also, if there is an accident, the value of the car will drop considerably.
4. Car-poor phenomenon, what is the problem?
a) Personal Aspect
Those who have become indebted with high interest rates in the third finance will most likely give up their vehicles at maintenance costs, including pre-paid purchase costs and installments. As a result, it comes to a desperate reality of failing to pay and we become a credit delinquent at a young age.
b) Social aspect
If we can’t afford the cost and have to apply for personal rehabilitation, the burden will be transferred to financial companies. Increasing the number of such people will increase the insolvency rate of financial companies, which will require the government to inject public resources and lead to tax expenditure.
5. How to avoid becoming car-poor?
We need to consider our own income. Even if we don’t have a certain income, we are tempted to buy a car impulsively as a result of the various advertisements, and of our surrounding atmosphere. However, we can quickly see that the happiness will be short-lived. So we have to think realistically. First, we need to calculate whether we have a stable and fixed monthly income. After that, we must think about how much money we usually spend in a month on living costs.
What should we do if we can’t buy a car at all? There is a subscription service platform that can be used only when the car is needed. If we pay monthly regular rates such as “Volvo’s Care by Volvo” and “BMW Mini’s All The Time Mini”, we can rent various models of the brand at a scheduled time. Domestic car brands such as “Hyundai Selection”, “Kia’s Flex Premium”, and “Genesis’ Genesis Spectrum” have similar services. Using these car companies’ services, and paying for the car only when necessary, may also be a good way not to become car-poor.
So instead of wasting all our time and money paying for a car to impress other people, let’s focus on our inner self-improvement rather than simply trying to show off our outward social status!