Would You Rather Have Money or a New Car?
Posted by M.S. on May 1, 2009
Did you know that the moment a car is driven off the lot, it is worth alot LESS than when it was purchased 5 minutes earlier? One of the very best and easiest things you can do to save money, build wealth and get rich is to ONLY buy USED older model cars.
Remember the rule we have practiced for 32 years–We try to only invest in appreciating assets–NOT depreciating assets. Because our goal has been to save as much as possible, we have NEVER invested in new cars!
Buying used cars has put loads of extra money in our hands which we used to buy stocks, mutual funds and investment real estate. We’d rather gain wealth than try to impress other people and make automobile companies richer!
So, in keeping with that philosophy, 3 years ago we purchased a used company car, as it was about to be sent to the auto auction. The car is a 2002 Ford Taurus, it has 170,000 miles on it and we only paid a couple thousand dollars for it. It’s not super pretty, but it gets us where we want to go!
We figure we have saved $12,600 on that car in the past 3 years, since the average car payment is about $350 per month times 36 months = $12,600. Invest that money for 20 years and you’d have almost $60,000 if you could earn 8% on the money! The car still runs, so we are continuing to save money each month!
We’ll take the money rather than the new car or the admiring glances!
Click here to calculate what you can save.
KashKeeper said,
I totally agree. I had a friend once that I tried to explain this to. I don’t why she did it but she just bought a new Toyota! Oh well she will learn….
Keep it up love the tips – thanks. By the way, I never thought about looking around the office to see who I can get fired. Next week I am going to try to get the new guys job. I feel bad because he just had a baby, but times are tough.
Saver Queen said,
I agree completely. I waited a long time to buy a car and finally bought a used car a couple of years ago. It was 10 years old, very affordable – about $5000 (which I paid cash for) and had everything I wanted. Much, much better value than buying a new car.
Right now, though, I am wondering if buying a new car that is highly fuel-efficient (some of these new models are very, very green) would make sense, as the economy has made new cars much cheaper, and now offer 0% financing. Would the lower prices of the new car + the fuel efficiency (some of them 3xs what a used car like mine gets) turn a new car into a reasonable purchase? My old car is starting to wear down and the time to replace it is drawing near.
M.S. said,
I wanted to clarify that I am not advocating being ruthless or heartless in the workplace. I am suggesting that by demonstrating that the company gets more than they pay for with me as an employee, it solidifies my value to the company at a time when they absolutely intend to eliminate jobs and consolidate responsibilities.
KashKeeper said,
Thanks for the clarification about being heartless.
Today I spoke to my immediate supervisor about the work habits of three of my coworkers and how much more work I could do. He referred me to his boss and sure enough, two of them are going to be let go and the third will now report to me!!! Plus, I got a 23% raise.
AND SaverQueen – Don’t get tempted. Go look at the deals on some used car lots now…
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