You’ve probably seen numerous TV commercials from car manufacturers advertising year-end sales and suggesting that a car makes a great gift. Don’t get caught up in the hype.
Most people need to take out a loan in order to buy a new vehicle, which can take years to pay back. If you find yourself unable to make timely payments, you may end up defaulting on the loan, which could put the person to whom you gave the car in a sticky situation. They might have their primary means of transportation repossessed. How would you feel if that happened? Taking out a loan to buy gifts for people is generally not a good idea, especially when repaying the loan could span a number of years.
Buying a car as a gift for your partner without their knowledge is generally not a great idea either. Both you and your spouse should openly communicate about your family’s financial health and spending habits. A car is a major purchase and should be discussed with beforehand, as disagreements about money can easily add stress to a relationship.
The holidays should not be used as an excuse to spend and borrow money irresponsibly. Your credit rating never takes a holiday! Bad spending habits before the holidays can lead to big financial problems afterward. If you need help organizing your finances for the holidays, take a look at Clearpoint Credit Counseling Solutions’ holiday planner. It can help you stay on the right track and avoid being overwhelmed by debt after the new year.