Social status is a mysterious element of our society. All of us feel its presence, but few of us understand it. The Encyclopedia Britannica describes social status this way, “The relative rank that an individual holds, with attendant rights, duties, and lifestyle, in a social hierarchy based upon honor or prestige.” This “prestige” of course is relevant to your own personal social circle. What might not be looked upon as social status in some circles may be very important to social status in other circles.

In our “middle class” society, social status is most often defined by our education, occupation and possessions to varying degrees. Our homes would probably be the top possession that can influence our social status, but coming in at a close second is definitely our vehicles.

From the moment the vehicle was invented it has been a symbol of just what kind of person you are in the eyes of the people around you. In the early years only the wealthy, modern families had a “horseless carriage.” The same judgments, however, are still being passed today on individuals who perhaps do not own a car, and more often judgments are passed on you based on the year, make, model and condition of your car. This pressure springs us into the “vehicle trap” where we place much too high a value on our vehicles, an emotional value, that will often come at a major financial expense.

This is a problem for the Christian who is attempting to get out of debt or reinvent their financial life to reflect more control and security. Why is this a problem? It is a problem because the root of this entire social status issue has always been pride and our vehicles are a daily reminder of our social or financial status. Most people are familiar with the twinge of embarrassment at some point in their life of having to drive or be driven around in a car that they felt was “beneath” them. That feeling was your pride revolting against something.

“Pride goes before destruction.” Proverbs 16:18

Nowhere is this passage better reflected than in our finances. Pridefulness can cause certain financial destruction when you allow your emotions to influence your spending decisions.

It has become a norm in our society to have monthly payments on our vehicle. For most purchases in our lives, we know that we should save the money and then buy the item. Mortgages and vehicles have become an exception because of their high cots, but in the case of the vehicle it is largely because we are living beyond our means.

Car payments are, in most cases, one of the most unnecessary of all debt payments that individuals strap themselves to. You may say, “I must have a car.” That may be true, but must you have a car that was so expensive that it required you to take on payments? In many cases the answer is no. You chose a car that was above your financial means because it was cool, it was fast, it was pretty, it would make people say, “Wow, nice car.” People want to hear this, and they want to hear it because of their pride.

Affording a nice car is entirely different from strapping on debt for a nice car. If you are already making debt payments on other items or if you have set as a goal for yourself to be debt free, then there is no excuse for taking on an exorbitant car payment when there are cheaper vehicle options available.

Four Surprising Benefits to Avoiding Car Payments

Savings on Interest

Okay, this one isn’t so surprising in and of itself, but the numbers are! According to Edmonds.com, 55% of loans taken out in 2012 were for terms longer than 60 months. That added anywhere from $2,115 to a whopping $5,548 in interest charges above the purchase prices of the vehicle.

Lower Insurance Premiums

When you take out a loan for a vehicle vehicle, the lender holds a lien against the car. You must then meet lien holder insurance requirements that are often above what your coverage would normally entail. Purchasing a vehicle outright eliminates that additional expense.

Opportunity for Personal Growth

If you battle with the desire to keep up with society’s expectations of what kind of car you should be driving, purchasing a car that might not be quite as shiny as the new ones on the lot is an opportunity for personal growth. A shift in your priorities can help you become a more humble individual.

Freedom

This one is especially true as compared to the alternative option of leasing a vehicle. If you own your car outright, there is no concern for how many miles you will drive, or how long you must keep the vehicle. If you find your situation has changed a year after buying the car, you can sell it or trade it in for a new car. With a lease you might be stuck with the car longer than you would want. With a loan, you might be upside down and be unable to trade it in without creating financial pressure.

Ask yourself these questions if you are in need of a vehicle right now:

How much cash do I have on hand to purchase a vehicle?

If you can pay cash for a cheaper, older car do so! This is the wise financial choice.

If I must make a payment which vehicle will have the lowest payment?

Think of this car as a temporary car. This is your “getting out of debt” car. Once you are financially free you might be able to upgrade a bit with cash!

If I knew that no one at all would ever get to see my car, which car would I choose?

This will help you evaluate whether you are functioning off of prideful emotions or practical need.

Buying a vehicle is a major purchase. Take the time to review your budget and carefully evaluate your financial situation before making the decision to take on a monthly payment when it may not be necessary.