Buying an ‘automobile’, good or bad idea?

  

Universally the meaning that comes to most people’s minds when you say automobile is a car.  However, I would like to refer to cars and other means of personal transport that we consider buying for purposes of easing our mobility. Hence the use of the word ‘automobile’ as for some people, it is outrightly a car while for others it could be a motorbike, scooter, e-bike, regular bicycle, tricycle, or tuk-tuk. It just really depends on who/where you are, what is preferred, your budget, the beliefs you conform to (sustainability, technology, and the likes). In short, we cannot assume that everyone wishes to own a regular car, or a signature model for that matter.

It is known that many young people often end up buying cars on loans and as such, there can be an air of negativity when you tell your peers that you would like to buy a car. Why buy a car when you have not invested in any asset yet? Why a car when you could use that money for something else more useful? Why take a LOAN to buy a car? These are some of the questions often asked. I once had a conversation with former colleagues where the younger ones sought advice from the older ones about what they would do differently if we had a chance to travel back in time and do things over again. One colleague said he would not buy a car on loan. His advice was ‘make money and use it to buy what you need, avoid loans especially for cars’. Another had a differing opinion on the same subject. He had no regrets whatsoever over taking a loan a decade earlier to buy his first car when he started out his career. As you can see, advice comes in different ways, we have to make our own decisions thereafter. Not to say that I was considering buying a car at the time or now….it was simply advice worth noting for the future.

Is it a good or bad idea to buy an automobile? I think the answer depends on many factors which you must consider before deciding to spend your hard-earned money or take up a loan to buy it and repay with interest, which can be more annoying.  I am no expert at investments or financial coaching and as such, will not try to assess the situation from that angle. I will simply use my day-to-day life experience to share my insights. For starters, it is important to determine why you need the car, or whichever automobile you wish to buy. Is it a need or a want? For example, if you are considering investing in an app hailing cab as your source of livelihood, then it goes beyond common sense that this may be a necessity for you, especially if you have no other income. The same option might not be a necessity nor a priority for somebody else. So yes, a loan for that car or automobile may be well worth it because it is an investment expected to have a return. To somebody else, however, the same automobile could be a luxury for which a loan facility should not be considered as a source of funding.

For people with families constituting several incredibly young children or the very elderly, if your finances allow, I see it as rather necessary to own an automobile. The struggle to move around on public transport with these age groups can be real. Many are the times that one will opt to use taxis or car hires if the pocket allows but can be quite expensive in the long run. These options were created for occasional use. Try using a taxi for long haul trips daily and see how fast you turn into a church mouse. 

I wonder how organizations subscribed to corporate taxi services for regular long-haul trips, rather than company-owned vehicles, deal with these expenses. I always believe that it could be cheaper to invest in a company vehicle (s), meet the requisite daily operation and maintenance costs, and still have a fat balance off your cheque book at the end of the accounting period. But this is probably me thinking like a lay man with no background in transport and logistics. My thought should not be misinterpreted as a proposal to kill taxi or other corporate transport services – we need them. The economy is too tough and gets worse by the day, we cannot afford to ruin our little ray of hope that is the source of livelihood and income generated off the provision of comfortable public transport at a relatively spiked price.

If your nature of business or work requires you to travel regularly or at varied hours of the day and night, a car might be a necessity. In this case I would say no need to think twice if your cash or savings allow. It is recommended that we go green as we invest in automobiles should our cheque book allows. It is quite saddening that the ratio of electric vehicles to internal combustion engine (ICE)  vehicles in Kenya is around 1: 100,000. More clearly, there are approximately 350 electric vehicles on Kenyan roads against a total of 3.5 million ICEs, if the national transport statistics are anything to go by. Hence, we are doing badly in as far as the fight against climate change in the transport sector is concerned. The daily traffic snarl-ups witnessed in major towns paints it all. Which is why conservationists have been out to promote more climate neutral means of mobility. Unfortunately, we are faced with a not so pleasant public transport system. This is subject for discussion another day. Today our focus remains whether to buy that automobile on your needs list, for various reasons known to you – some valid, others debatable. 

Credit: Flickr

Sustainability and climate matters aside, because reality is that there are thousands of people – young and old - who buy cars every day. We must therefore deal with this reality first. It starts by making sure to do the math right, or the cost-benefit analysis as other people prefer to call it, before you invest in the automobile. If the benefits outweigh the costs, I say go for it without a wink of guilt. Provided you are not robbing anyone or borrowing from Peter to pay Paul, unless you have a clear repayment plan for how you will settle Peter’s dues. Again, the choice to go cash or loan route is pegged on 'asset vs liability' perception with respect to why you need/want the auto.

If buying an ICE vehicle, which is often what most of us can afford in this part of the world and economy, for the love of nature, buy something as near e-co friendly as your pocket can allow. And it should not end at the purchase desk, keep it roadworthy while hitting the roads with it. 

Have yourself a great month as you enjoy wheeling, dreaming, or planning for your first or next automobile. My bicycle is a couple of bucks away! Or so I hope. Although I don't know how to cycle - we learn everyday. In the meantime, I will keep labouring like the laborer I am. We marked labor day hours ago anyway, so I am happy with my laborer role for now.