The one thing that Americans like to think distinguishes us from our British counterparts is class. British society has been structured around class for centuries, while we American grunts haven’t put much stock in it since our culture promotes the Calvinist ethos of moving up through hard work and determination.
General Motors built an empire on that: Buy a Chevrolet and, through your life’s path, you would move up to a Pontiac, Oldsmobile, Buick and, finally, Cadillac, the epitome of success.
However, with the advent of credit, those lines have been blurred. So, are people faking their position in American society to keep up with the Joneses? Of course, and according to Dave Ramsey, a financial guru who can often be seen and heard online and on cable TV, you can tell a lot about a person’s class by the kind of car he or she drives.
If that elicits a “No duh!” reaction from you, hold tight and wait for the explanation: “The way you know someone is going to stay middle-class is when they have two very nice cars that are obviously $500, $600, $700 payments, sitting in front of a middle-class house,” he says. “One hundred percent, those people are going to stay middle-class until they break that habit. It’s a huge indicator.”
In other words, that expensive German car that may be incongruous with a home is a hint that someone may be living outside of his/her means.
“One of the guidelines we’ve developed here is to not have more than half your annual income tied up in things that have motors and wheels,” Ramsey says. “We tell folks not to buy a brand-new car until you have a net worth of a million dollars. If you do have a car, you should sell it if it violates those things.”
According to this Fortune story, Ramsey suggests that those who earn a wage that puts them in the middle class should buy used cars so as not to accumulate too many depreciating assets, especially when debt is an issue, something that is not proprietary to the middle class—according to Wilbert van der Klaauw, economic research advisor at the New York Federal Reserve, “High auto loan delinquency rates are broad-based across credit scores and income levels.”
What Ramsey fails to realize is that cars can be an appreciating asset, as any enthusiast knows—all one has to do is be a smart speculator. Of course, that’s the hard part, plus most enthusiasts don’t use classics as daily drivers. Nonetheless, you always have ClassicCars.com and AutoHunter on tap to make this slightly less irresponsible purchase and live your best life (and we bet the neighbors won’t judge!).
