If you’ve ever thought about buying a new car, let me ask you something…
Do you just need a vehicle that will take you from A->B, safely and comfortably?
If the answer to that is YES, why would you spend thousands more to have the latest model of a vehicle when it’ll just be outdated next year?
If you answered NO, what do you expect a new car to provide you that a used one won’t?
If it’s safety,
Just be aware that:
- Driving in itself is one of the most dangerous things you can do. According to The Association for Safe International Road Travel, each year nearly 400,000 people under 25 die on the world’s roads, on average over 1,000 a day. If you’re so concerned about safety, maybe you should consider other forms of transportation that aren’t so risky and expensive?
- Any car made after 1995 has enough safety features to ensure that even in the worst case, you’ll still be protected. According to The US Department of Labor Occupational Health and Safety Administration, the necessary safety components for automobiles are: seat belts, anti-lock brakes, headlights, and so on… Anything beyond the essentials are just slapped-on so the manufacturer can say they’ve “upgraded”. In other words, any car made after 1995 is perfectly safe enough for you, even a twenty-year-old one (like my car, pictured above).
If it’s reliability,
Be aware that any vehicle can break down, even a new one. It’s just another risk you take on as a driver.
Also, consider the fact that if you take reasonable care of your used car, you won’t have to worry about it breaking down. Reasonable care includes:
- Having your mechanic look at twice a year or when you notice any issues
- Getting an oil change every so often
- Checking your tire pressure routinely
If it’s a modern look,
If you care so much about the look of your car and how others will perceive you (which I can totally understand) allow me to demonstrate something…
If you were to go to the dealership today and buy a brand new Dodge Charger, for example, it’d be about $27,995, up-front. After the dealer’s commission, taxes, warranties, insurance etc… You’d be looking at around $30,000, or more. Just for the car. To add to the mess, you likely won’t be paying cash for it, so financing interest would incur an additional $5,000-$10,000 depending on how soon you pay it off… It ultimately translates to $300-$600 monthly payments for a set amount of years.
Imagine going to the amusement park and asking the vendor for a ticket. She says you can either pay the $50 in cash, or 1,000 monthly payments of $0.05 over 3 years, plus interest. Which one would you choose?
With that logic, why would you choose to have a monthly payment when you can instead buy a similar used vehicle with cash?
Or better yet, take the money you’d be paying the dealership each month and pay that to yourself via a tax-advantaged retirement fund (such as a brokerage account or a Roth IRA)? That $400 payment over 3 years would potentially amount to over $7000 in growth (assuming a 6% growth rate compounded monthly).
Regardless of what your reason for purchasing a new car might be, is it really worth setting you back from your goal of achieving financial independence and removing yourself from the rat race?
As always, if you liked this post, please share it with someone who can use it, and if you have any questions for me, feel free to send a message or leave a reply below. 😊