Buying a car - Asset or Liability
Buying a car - Asset or Liability
My dad used to tell me that buying a car is always a liability. The main reason my dad made the statement ‘Aiyoh, buy car today tomorrow the price drop already’. Fair enough, make sense.
After some further thinking, i think that my dad statement is right but not absolutely right. Buying a car can be an asset or liability. Depending on how you look at it or what you do with it.
Ill give examples on what cases buying a car is an asset and when buying a car is a liability.
Case I
Firstly, i would like to congratulate one of Malaysia’s top blogger liewcf for purchasing a New Honda City. It is indeed a good buy and a nice car.
So, taking liewcf as an example is a perfect choice to show whether buying a car is an asset or liability.
As we all know, liewcf is a Full Time Blogger. As a blogger, Liew does not need a car for his work. Liewcf needs a PC or laptop more then he needs a car as the PC and laptop is essential for him to generate income.
So liewcf bought his car is for convenience and comfort. Is this a liability or asset?(Oh yeah, liewcf just burned his pocket buying a new car and many other gadgets but i am pretty sure he’s fine! ^^)
Case II
My brother, who’s an insurance agent just bought a new Altis 1.8 few months ago. Nice car too! Basically, it’s important for a full time insurance agent to have a car.
Insurance agents need to be punctual in their appointments. Besides that, my brother is also providing services like fetching his sick clients to the hospital.
So a car is essential for his nature of his business. Without a car, he can’t generate income from it or will generate at a slower pace. Did the insurance agent bought a car as an asset or liability?
Conclusion
Case I surely shows that as a blogger, one need not need to have a car to generate income. Buying a car is a liability for a pro blogger.
Meanwhile in Case II, as an insurance agent, the nature of the work depend heavily on the usage of the car. So buying a car for an insurance agent is an asset.
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6 Responses to “Buying a car - Asset or Liability”
By KCLau on Dec 24, 2008 | Reply
how about someonewho is an insurance agent and at the same time also a blogger?is a car a liability or asset
By Kampung Boy on Dec 24, 2008 | Reply
Wow! KCLau commenting on my humble blog. Privilege to have a person like KCLau here. ^^
Anyway, if a person is a blogger and at the same time is a part time insurance agent, the car will be an asset as the car is important for that particular person to generate more income. ^^
By Relax on Dec 25, 2008 | Reply
waaaa. this is a clear sign that KC Lau has reached a celeb status like Liew CF (their names also rhyms in a mirror way)
Anyways, I will only buy a car for leveraging purpose, when it’s a vital tool for me to make money.
I’ll drop by more often ya… wish u luck in reaching financial status!
By LiewCF on Dec 26, 2008 | Reply
yeah, car is liability but no choice. It is a tool for my family and myself. Owning a car gives me convenience and comfort, plus TIME too. No money can buy your time. Er.. Also, it is easier to get a girlfriend by owning a car, don’t you agree?
Happy new year!
By Kampung Boy on Dec 28, 2008 | Reply
OoO.. Glad to see you here Liew! Another Malaysia’ top blogger in my humble domain. Thanks for the comments! Really appreciate it…
Anyway, for Liewcf to own a car is considered sap sap sui cause he can afford it. Considerate of you buying a car for family use as well! Good son eh…
I do agree that owning a car it’s easier to get girlfriend… ^^
BUT…
better beware with girls, when they like you only when you have cars!
Now KampungBoy is becoming a love Guru! ahah..
By Anonymous on May 9, 2009 | Reply
it really depends on how you see it.
But no matter how, car is a liability if you justify it from a financial point of view.
You buy a car, if you sell it in future, you definitely wouldn’t be able to sell it at a price higher than when you first bought it.
The value of car depreciates over time.
On the other hand, buying a house is an asset. You buy a house today, you sell it in future, you definitely will be able to get a higher price.