houses and cars: a dichotomy

I like the word dichotomy and rarely have the chance to use it 🙂

I am one of the unlucky/unwise ones who bought during the boom (because that’s when we happened to get married and buy a house).  Consequently, our house is currently appraised for just under 2/3 what we bought it for.

There are many folks who would see nothing wrong with The Big Man and I walking away from this house and our mortgage, since the house has depreciated so badly.

I’m not here to argue whether or not that would be socially, economically, or ethically correct.

What is interesting to me is how many people don’t have the same mindset on what is typically the second most expensive thing they buy: their car.

Most of the people who I know who have purchased a car have bought a new car (as opposed to a used car).

As soon as you drive the car off the lot, it’s not worth what you paid for it.

Would you buy a house that lost a significant portion of its value as soon as you signed the papers?  Why do it with a car?

Duke it out in the comments.  I’m interested to hear why one is OK and the other isn’t…


3 responses to this post.

  1. Posted by Ilana on 24 August 2010 at 13:50

    I totally agree with you about the instant depreciation of most new cars. Good value is important to me. I have always purchased used cars, after having them thoroughly checked out.

    In recent years, my used cars have had fewer and fewer miles on them at the time of purchase. 🙂 My Acura only had 22K miles when I bought it. It was like new, but cost many thousands less.

  2. I think the mindset is more because a car is typically 40k or less, while a house is typically 200k or higher. After they buy people just can’t see themselves ever paying it off. Regardless, if you sign your name on the dotted line, it’s yours and so is the debt that goes with it.

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