When you are punished for paying back all your loans
Published 23/10/2013 | 05:00
The other day I was talking to a mechanic friend of mine who has a garage down the country in a smallish town. He told me an extraordinary story about a friend of his who came into the garage a few weeks back to get his car touched up before he flogged it online. The story explains why an economy needs demand as well as supply to boost the recovery. In the past week since the Budget, there has been lots of talk about job creation through boosting supply. This little tale explains why boosting supply is not enough.
A few weeks later, the same bloke was back to the same mechanic. He hadn't sold it and so he was looking for the mechanic to get the car up to speed in order to pass the NCT.
He was doing the NCT on the old car because he couldn't get finance to buy the new car. He wanted to flog his old one to save on tax, fuel and upkeep. He was going to put that cash towards getting a new car. He hasn't changed his car in years. He aimed to use the cash, top it up with his savings and borrow the rest. He calculated that he'd actually save cash on tax and fuel each month.