The monthly haunting of your unpaid car

It’s the stuff of horror stories, if you really think about it. What starts out as your dream of owning your first car becomes a reality, but then takes a turn for the worse. The cost of monthly mortgages, fuel, maintenance, and other related expenses pile up. You can’t outrun the “demons” hounding your ride, until your car becomes “re-possessed”. And at the end of this scary bad movie, you’re left with nothing but unsavory memories while you’re on your way to work in a public transport.

We always like to say it’s so easy to dream and dream big. “Libre naman ang mangarap (dreaming’s for free, anyway)”. But the other side of that saying is also true. “Libre din naman ang bangungot (A nightmare’s for free, too)”. And owning a car can be a perfectly good example of both.

Las Pinas resident Alvin Yambao Belonia, 48, married with two children, was an employee for most of his adult life. He got into different jobs—from being an airport driver to becoming a property and records department officer for a company’s human resources department.

He quit his full-time job four years ago and decided to drive a friend’s car that was registered in a transport network vehicle service. He fit in like a hand to glove. He loved to drive, and with this ride-sharing network, he was earning well doing what he loved to do.

Two years later, Alvin decided to go all-in and buy his own car to use for his TNVS job. Taking advantage of the remarkably low downpayment offers various auto dealerships dangled, he went ahead and took out a loan for a compact sedan for just a P48,000 downpayment, with monthly amortizations of P13,300 stretched out for five years.

Alvin thought he had everything figured out. The downpayment was a virtual giveaway, the monthly payments, he calculated, was doable.

But what he didn’t take into account were forces beyond his control.

A couple of months after being handed the keys to his brand new car, the heated controversy involving TNVS companies and the Land Transportation Franchising and Regulatory Board (LTFRB) boiled over, with the government regulatory board suspending additional individual applications for ride-sharing enterprises. Alvin’s nightmare had started. He was among those whose TNVS applications ground to a halt. His entire repayment plans hinged on this one single route: He thought his earnings alone as a TNVS driver would be enough to cover the monthly dues.

Alvin was forced to find another way. And he did. Using his contacts from his previous stint as a driver for his friend’s car, he offered private chauffeur services–oftentimes for out-of-town trips. This somehow enabled him to make ends meet, but barely, for more than a year. But every month, Alvin would suffer sleepless nights as the date for the bank charges approached. He was cutting it too close. He was nowhere near his income projections had he been a TNVS driver. Fortunately, Alvin’s sister who was working abroad also chipped in.

Alvin’s nightmare ended just this August when the LTFRB finally re-opened the gates for new TNVS applicants. By September 11, he was on his original income track, earning enough to provide for his family and his personal needs, and make the monthly car payments.

For a horror story, Alvin’s has had a happy ending. Sadly, it’s the opposite for thousands of other new car owners who have had their cars repossessed for reasons foreseen and otherwise. Alvin can only share some of the most important lessons he had learned during his year-long ordeal.

Don’t be easily lured in by offers of “low downpayment”. Alvin says it can really be tempting. The reality only hits you when you’re stuck with high monthly payments stretched for a longer period of time, and then you can’t figure out how to pay them. Focus on the monthly payments, which you will have to meet every month for the next 60 months, and not on the one-time downpayment.

It would be better to pay for that new car in full (in cash). It would save you the trouble of stressing out the monthly payments, and you’d be spared from the substantial interests accrued over time. Alvin says he could have stashed up enough earnings from driving his friend’s car for an outright cash purchase from the auto dealership. But then, that’s when discipline and self-restraint play a big part.

If your job doesn’t depend on it, don’t buy it. Alvin says the fact that TNVS is such a lucrative enterprise only proves that it isn’t that necessary to use your own car to go around the city. “Driving your own car around the city is stressful and costly. Nowadays, when you commute, car pool, or avail of ride-sharing services, it’s becoming more practical,” Alvin observes. He adds that he has a lot of passengers who own cars, but still opt to commute or ride the TNVS.

Don’t put all your eggs in one basket. Alvin says he counted on making his monthly payments solely from his earnings as a TNVS driver/operator. That thinking nearly cost him his car. Always have a Plan B or even a Plan C. Good thing Alvin had an extensive network of customers he could tap for his private enterprise. And yes, that helpful sibling who got his back when it was against the wall.