This whole thing is a sad commentary on the economic state of America. It is also a testament to the poor economic choices that uninformed consumers make. $18 per week x 4 weeks per month x 18 months. The woman in the story is potentially paying $1296 for tires that she could have purchased upfront for $400. If she is paying $18 per week, she would have been better off saving $25 per week and then going in once per month for one new tire over the course of 4 months. She would have saved herself $896 dollars and not been on the hook with a tire dealer for 18 months.
ryster is very correct. People spend very foolishly. I'd be willing to bet that the lady that 'couldn't afford' to buy the tires has a cellphone bill between $50 and $100 a month a cable bill around $100 a month, broadband internet at home and stops at Starbucks on a regular basis.--- It is called priorities people. --- Renting tires is as stupid as taking out one of those $5,000 loans they advertise on TV where the payback (in the small print) totals more than $60,000 ---- This is much less a comment on our current economy and much more a statement about how people think about priorities and long term spending. All those things I've listed above have now become necessities in most people's minds rather than luxuries and at the same time they no longer think of tires or upkeep on their cars as a necessity
Rather than priorities, I think a source of this financial problem could be not budgeting for these infrequent big maintenance items. A lot of people have an idea of their monthly budget, but it is easy to neglect things that don't happen monthly. That's why my monthly budgets include placeholders for maintenance, money I don't actually spend during the month, but it is earmarked so I don't spend it, and then when it comes up the money is there in savings.
By the time those are mounted, it will be close to $600. For an economy car. Shows how expensive owning a car can actually be. I agree with stovt001, you absolutely should be setting money aside as part of your monthly budget for the infrequent occurrences like maintenance, insurance, and yearly registration. If you don't, there are plenty of people willing to make a killing from your unfortunate circumstances.
I'm with stovt001 regarding budgeting for recurring payments that don't occur monthly (oil change, battery, alignment, brakes, tires, registration, insurance, etc) or that are unpredictable (citations, damage not covered by insurance, repairs, etc). People fail in one of two ways: by not having a budget, or by not sticking to a budget. Both are due to a lack of discipline.
As an example, I know my costs are going to be $350-450 for a set of tires, plus $15 per tire for mounting and balancing, every roughly 75,000 miles. (Ignoring the fact that I have a set of winter tires, for the moment). I drive 25,000 miles a year, so that's $410-510 every three years, or $11-14 a month into the "car maintenance" bucket in my budget. I tend to overestimate, so I probably rounded to $15 in my actual budget...
Comments