Evening star., 1933-02-12
WEIGH
FINANCE METHODS
Opportunity Is Given for Buy.
ing on More Sound
Basis.
BY GILLAND MASON.

viii the automobile owner take q
leaf from his general financial expert
ence Of the last few years and buy his
newest car, and others to come, on q
businesslike basis
The motor industry is wondering.
Purchasers Of cars on the deferred
payment plan, recently at q low ebb,
have been increasing steadily. Is the
motorist going back to the plan of buy
ing his cars out Of income or will he
confine his buying more to purchasing
out of capital?
A further question, one that offers
interesting possibilities, is whether the
nlotorist will develop some advanced and
cars.
Have Clean Slate.
Many motorists WI have paid cash
for their cars this past year are in
the envlable position of starting with a
clean slate. They can start immedi-
ately to save for the next Car, putting
aside so much per month and enjoying
the advantage of interest on the money
they are accommodating. viii they save
IN this manner or will they slip back
into the old plan Of always going into
debt to buy another car?
Pointing out the advantage of being
able to save financing charges and to
ada interest on savings, bankers are
urging car owners to set aside so much
month for the car that must be
bought two to five years hence. A saw
ing OF $25 per month Is considered
| about right for those whose transpor-
tation facilities are not more than bare
| needs. Owners Of cars in the higher
priced brackets may find 1t advisable to
put aside $50 monthly In special car
account. Over a period of several years
the accumulated interest Is sufficient to
buy number of extras for the next
new car or to send the new account
OF with flying start.
One Difficulty.
One difficulty in the financing Of
cars is the very limited buying expert
ence OF the average motorist. The car
owner Is only just beginning to acquire
! experience in buying motor transporta-
ton. Although there are over 26,000,-
600 passenger cars in operation today,
it Is significant that large percentage
of motorists are driving their first cars,
while majority Of them have not
purchased more than two or three ma
chimes. If the 800 people who owned
cars in 1895 had bought a new ma
chine every five years, they would just
now be anticipating the announcement
of the 1885 models so as to be able to
purchase their ninth car
When you find a man today who has
| purchased nine cars for his own per-
sonal use he Is either an old-timer or
millionaire, and in either event he
| has probably worked out his financial
problem to his own satisfaction. The
average person, however, still regards
the purchase of new car as men,
orable event-a spree to be celebrated
with week end trip.
Because of its nature the event Is
quite likely to be a costly process for
the man who is not on sound f1nan-
cial basis. There was time when no
one thought of buying an automobile
unless he had every dollar set aside
for 1t. Then came an era in which
it was whispered that some folks were
mortgaging their homes in order to buy
cars. How some people acquired ma
chimes was shrouded in secrecy. Then
all at once, the average motorist dis
covered that 1t was no longer a dis
grace to buy a car on the deferred
payment plan-in fact, that up to 30
per cent of the cars were being bought
that way. Finally came the turnabout
and the desire to pay cash, out OF which
era the motor world Is slowly but not
so intelligently emerging.
Credit Looked Good.
Getting the new car on credit looked
| like splendid way to solve a problem
| for the man who found that, having
| invested in car, he would be required
| to accept a considerable depreciation of
| its value in return for the unique and
valuable service it rendered him. II
came to many as q Jolt to have to dig
down into their pockets for cash every
time the car grew to be two years on
so old and was more expensive to keep
and repair than to trade in and buy
new. The time-payment plan looked
like the ideal way to get around this
difficulty and it still has this lure fol
many persons who do not realize that
financial problems they could proceed
in a more independent fashion
It is not generally appreciated, fol
instance, that many people who aspire
to own finer cars could easily have
their wish gratified were they to start
saving for the car now. Their advance
savings need not cover the entire cost
Of the new and better car, since they
can make up the difference by buying
out of income That Is, they can handle
part of the cost on their own advance
financing plan and utilize the finance
companies for the necessary balance
While they could not Immediately start
saving as much for the next new car
they are acquiring a better machine
which should not need to be replaced
so soon.
In times when purchases are made
freely there is less opportunity for care
full consideration of financing ano
planning. Today everything favors