Korea's 'car poor' guys feel like hit-and-run victims

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Korea's 'car poor' guys feel like hit-and-run victims

Published: 21 Jul. 2022, 16:37 Updated: 21 Jul. 2022, 19:37

A used car dealer and a buyer pose for a photo after a deal is closed. [SCREEN CAPTURE]

Men who fell head over heels with a BMW, Porsche, or Mercedes-Benz are coming to regret it. The cars ran over their hearts and demolished their bank accounts.

“The pandemic situation was pretty bad when I bought my Porsche in 2020 from a used car dealer,” said Mr. Park, a 35-year-old survivor of luxury car mania. “It cost me 2 million won [$1,530] a month to maintain the car, so I didn’t go shopping, eat out, and sometimes I just didn’t leave home.”

Many men in their 20s and 30s fell in love with such cars in the early 2010s, and they've seen many kilometers spin on the odometer since.

“Someone I know bought an apartment when I bought the Porsche,” Park said. “The price of his home shot up by at least 300 million won. What did I get? I sold the Porsche, and was left with debts to pay back."

A 35-year-old man surnamed Park's Porsche that he bought in 2020. [PARK]

Mr. Lee, a 21-year-old college student, paid for a used BMW last year with most of his savings.

“Driving a BMW of my own has been my dream,” he said. “I found this used BMW last year, a model that was first produced in 2008, and paid 5.5 million won to make it mine.”

Lee thought he was ready to pay to maintain the car, until he saw the bills.

“It cost me at least 600,000 won a month, sometimes up to 1 million won, to fixing this and that, pay for the gas and the insurance,” he said. “I had to borrow money from my parents, and take part-time jobs like food delivery to try to afford it.”

Six months later, Lee’s bank account was down to 3,000 won.

“My advice is, 'Don’t do what I did and buy a high-end car without thinking it through,'” he said.

"Car poor" is a term Koreans use to refer to people like Park and Kim, whose financial status has significantly deteriorated after splurging on high-end cars. It differs from being house poor because a car's value only depreciates.

In some cases, the price also came out of their social lives.

“I had to give up dating to try to pay my loans back and keep up maintenance on the car,” said Mr. Hyun, 34, who bought a Mini Cooper in 2017.

“I intend to give up the car soon,” he said.

The world of finance has allowed these young men to indulge their love of a hot set of wheels, even if they shouldn't.

“Young people who want to buy high-end cars but don’t have enough money saved up still have access to monthly installment plans offered by their credit cards ,” said Mr. Kim, a 41-year-old used car dealer in Seoul who’s seen them come and go for the past 13 years. “There's a tendency to trust the installment policy and to think that they will be able to pay off the car over an extended period of time.”

There is also the wow factor, Kim said, which hooks some guys every time.

“It’s the look they get from passersby when they get out of their cars,” he said. “There's a sense of pride, even if it’s rooted in superficiality.”

In a world on conspicuous consumption, society can hardly expect otherwise.

“It is a phenomena that has arisen in a society in which it is important to find personal taste and satisfaction,” said Kim Joong-baek, a professor of sociology at Kyung Hee University. “I don't think we need to label the habit as something negative.”

Consumer science professor Lee Eun-hee at Inha University is a little less indulgent.

“You should consider whether you can afford it with your present and future income before buying something,” she said. “We can only call something value-based consumption when the consumer is aware of how much he or she is spending, and has a good economic plan in mind.”

BY HAM MIN-JUNG, ESTHER CHUNG [chung.juhee@joongang.co.kr]