One of the most asked questions by debtors seeking solutions to their financial problems is, “Can I keep my car?” In Manitoba, the Executions Act provides an exemption from seizure of a motor vehicle, if it is used in the course of your trade or business or required to get to and from work. This is to a maximum value of $3,000.00, which covers a lot of cars that are a few years old.
Newer cars are often subject to security agreements or chattel mortgages. In these circumstances, creditors can seize a car if payments are not made. Usually, there is little equity left in a car which has a security agreement or mortgage against it. Generally speaking, if the car is of lower value, then it will fall under the exemption. If it is of higher value and is fully encumbered, then it is going to be a question of whether the car payments can be kept current or not.
The question that probably should be asked more often is, “Should I keep my car?” This answer may depend on where you live. For example if you are in an urban setting such as Winnipeg, where there is a good transit system, your answer may be different than if you live in a rural setting and require transportation merely to get to and from work. You could be several miles away with no other means of public transportation. You should look to your budget to decide whether or not it is worth keeping a car.
An analysis of the cost of the car is not just what the payments to the creditor are, but also the cost of operating and maintaining the car. This includes gas and oil, and the cost of insuring the car as well as the cost of parking both at home and at work. Once you have determined exactly what the car costs you in a month, it’s a matter of deciding whether your resources are better spent on the car or on something else. You have to determine just how much convenience you can afford. After you go through this exercise, you may very well decide that you can actually live without your car.