Cars... just another tool unless your a tool.

Questions on how we spend our money and our time - consumer goods and services, home and vehicle, leisure and recreational activities
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Brokepilot
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Cars... just another tool unless your a tool.

Post by Brokepilot » Mon Aug 27, 2018 9:28 pm

I am a car nut. I love sports car... but after being car-less for almost two years and seeing the financial gain from not owning a car at all, I don't think I can justify a car over 25k again (minus inflation) unless I hit the lottery. Seriously, what a tool I was at 28 to buy a 1-year-old Corvette for 35k. These cars manufacturers know how society and peer pressure work and they hand over fist make so much money off people egos. I look around at people who make less than me who driving around in 40k+ vehicles and I scratch my head and think how can they justify it...

FYI, my wife and I share one 15-year-old car. It sucks sometimes but they money I have saved is insane!
2019 Status: | Military Pilot. | Two mortgages, one a rental. | Maxing out the TSP and trying to max out Vanguard Roth.

stimulacra
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Re: Cars... just another tool unless your a tool.

Post by stimulacra » Mon Aug 27, 2018 9:49 pm

Congrats, just curious… how much have you been able to save being carless?

I've calculated my annual car expenses at $8k and it's definitely a noticeable headwind to building my net worth. I tried public transportation for a week and it was too drastic of a shift to keep up (2 hours additional on the bus or waiting). Looking to downsize to a used subcompact for my commuter car (will still keep my current car to drive family around).

I'm always curious to hear about folks that managed to engineer their lives to where they can be carless.

stoptothink
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Re: Cars... just another tool unless your a tool.

Post by stoptothink » Mon Aug 27, 2018 10:09 pm

Brokepilot wrote:
Mon Aug 27, 2018 9:28 pm
I am a car nut. I love sports car... but after being car-less for almost two years and seeing the financial gain from not owning a car at all, I don't think I can justify a car over 25k again (minus inflation) unless I hit the lottery. Seriously, what a tool I was at 28 to buy a 1-year-old Corvette for 35k. These cars manufacturers know how society and peer pressure work and they hand over fist make so much money off people egos. I look around at people who make less than me who driving around in 40k+ vehicles and I scratch my head and think how can they justify it...

FYI, my wife and I share one 15-year-old car. It sucks sometimes but they money I have saved is insane!
As a fellow car nut who has also essentially given up driving (wife and I share a single subcompact which we bought new for <1/12 of our annual income, I commute via bike or my feet almost everywhere), I could not agree more. Even though I absolutely love cars, the ROI vis a vis the increase in quality of life per dollar is generally horrible with "nice" cars. The stark reality is that cars are one of the single most effective wealth signaling tools; something, IMO, most people simply aren't willing to be brutally honest with themselves about. That being said, if you can afford it, you can afford it and when it comes to this board, most posters can easily afford themselves that luxury. Just another glaring example of how Bogleheads aren't exactly a good representation of the general public.

LiterallyIronic
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Re: Cars... just another tool unless your a tool.

Post by LiterallyIronic » Mon Aug 27, 2018 10:17 pm

I've never owned a car that was younger than 10 years old or had fewer than 100,000 miles on the date of purchase (currently driving a 2001 Stratus with 180,000 miles), but, man, would I love to own a DeLorean some day.

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MNGopher
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Re: Cars... just another tool unless your a tool.

Post by MNGopher » Mon Aug 27, 2018 10:18 pm

I'm pretty frugal, but I have a weakness for 4x4 pickups. The last was a new F-150 Lariat. That was 9 years ago. I took out a loan, but payed it off after just 1 year. When I look at the price that the new ones are going for now, I don't think I'll buy anything that nice again.

daveydoo
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Re: Cars... just another tool unless your a tool.

Post by daveydoo » Mon Aug 27, 2018 10:33 pm

Brokepilot wrote:
Mon Aug 27, 2018 9:28 pm
...Seriously, what a tool I was at 28 to buy a 1-year-old Corvette for 35k. These cars manufacturers know how society and peer pressure work and they hand over fist make so much money off people egos...
Yes, buying a near-new Corvette when you have no money is a bad idea. Buying any luxury item you can't afford is a bad idea. Congrats on the epiphany!

Some folks can afford them (and probably future-you will, too, at this rate) so don't be too hard on all the "tools" driving nicer cars. :D Mine has a book value of maybe $15K but would pass for a nice car and I hope to never part with it.

Just buy things for the right reason.
"I mean, it's one banana, Michael...what could it cost? Ten dollars?"

joeblow
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Re: Cars... just another tool unless your a tool.

Post by joeblow » Mon Aug 27, 2018 11:46 pm

*you're

I tried the inexpensive/practical/economy car thing for a while. Meh, I'll drive what I want and work a few extra months at the end if I have to. Just got back into a full size luxury SUV and love it.

vickler
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Re: Cars... just another tool unless your a tool.

Post by vickler » Mon Aug 27, 2018 11:58 pm

Even more nuts... insuring something that's worth over 35k! You're literally spending money to spend money.

If it inevitably gets scratched in a parking lot or you run over a piece of metal, wood, etc or other scrap on the road most people will happily spend more money to keep their car looking like it's brand new.

BeneIRA
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Re: Cars... just another tool unless your a tool.

Post by BeneIRA » Tue Aug 28, 2018 1:53 am

vickler wrote:
Mon Aug 27, 2018 11:58 pm
Even more nuts... insuring something that's worth over 35k! You're literally spending money to spend money.

If it inevitably gets scratched in a parking lot or you run over a piece of metal, wood, etc or other scrap on the road most people will happily spend more money to keep their car looking like it's brand new.
This is one overlooked aspect of owning a used car. When I had a new car years ago, I would park it about 10 miles away from the front door of the store to keep it from getting scratched. I would obsess about it's appearance. Now with my used car which is worth about 1/16th or so of our annual income, I don't stress at all. Scratch? Who cares. It's even been hit at less than 5 mph. Don't care. Has really improved my stress levels and made me happier. I never would have seen it coming.

Valuethinker
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Re: Cars... just another tool unless your a tool.

Post by Valuethinker » Tue Aug 28, 2018 2:47 am

Brokepilot wrote:
Mon Aug 27, 2018 9:28 pm
I am a car nut. I love sports car... but after being car-less for almost two years and seeing the financial gain from not owning a car at all, I don't think I can justify a car over 25k again (minus inflation) unless I hit the lottery. Seriously, what a tool I was at 28 to buy a 1-year-old Corvette for 35k. These cars manufacturers know how society and peer pressure work and they hand over fist make so much money off people egos. I look around at people who make less than me who driving around in 40k+ vehicles and I scratch my head and think how can they justify it...

FYI, my wife and I share one 15-year-old car. It sucks sometimes but they money I have saved is insane!
I believe the vast majority of new cars in the USA are bought on lease not for cash? Thus "usership not ownership" is how BMW Europe terms the trend.

So it's worse than that they tied up $30k+ in a car - they borrowed to do it. They don't "own" anything except when it goes wrong.

The car finance bubble is not the US housing bubble of 2003-2008, but it does feel like a bubble (a bit).

What one can say is:

- most middle class jobs and lifestyles in America require a car (so too do the poorer working class people, they seldom live close to work)

- you can buy a decent new car in America for less than $30k (total cost on the road not just Dealer price) and probably a decent used car for $15k?

- if you drive long distances regularly that may not be enough - comfort really counts. But for ordinary commuting the performance of a more expensive car is often wasted - rush hour traffic is rush hour traffic. However I understand if people spring for a Lexus in those situations (the problem is the BMW or Mercedes are better driving machines, but much higher repair bills are likely).

- the ultimate privilege is to live somewhere where you do not need a car, or don't need a second car - neighbourhoods with high walkability scores justify their premiums

One of my siblings whose company is moving back downtown (in a mid sized North American city) is considering doing without a 2nd car. On the days when they work too late to catch the bus, Uber will do the job. The cost of an Uber 2x a week is not anything on the cost of owning a car.

It's a good rule of thumb your car should be 5% or less of your net worth. However in early days that's hard to hit.

arsenalfan
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Re: Cars... just another tool unless your a tool.

Post by arsenalfan » Tue Aug 28, 2018 7:12 am

I agree.

Safety, reliability, comfort and transportation storage of people/animals/things...beyond that you're paying for a (life)style idea.

Granted safety can mean torque and acceleration performance, if you're on a crazy highway or have a short on-ramp, etc.

Filling out a net worth statement recently for a bank, I was a little surprised to realize our 3 cars are 0.1% of our net worth (excluding real estate and insurance).

I will admit that my second thought was whether any of the 3 needed upgrading...I cannot wait for the electric 4-season convertible a la Saab or Audi A4.

The Wizard
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Re: Cars... just another tool unless your a tool.

Post by The Wizard » Tue Aug 28, 2018 7:16 am

daveydoo wrote:
Mon Aug 27, 2018 10:33 pm
Brokepilot wrote:
Mon Aug 27, 2018 9:28 pm
...Seriously, what a tool I was at 28 to buy a 1-year-old Corvette for 35k. These cars manufacturers know how society and peer pressure work and they hand over fist make so much money off people egos...
Yes, buying a near-new Corvette when you have no money is a bad idea. Buying any luxury item you can't afford is a bad idea. Congrats on the epiphany!

Some folks can afford them (and probably future-you will, too, at this rate) so don't be too hard on all the "tools" driving nicer cars. :D Mine has a book value of maybe $15K but would pass for a nice car and I hope to never part with it.

Just buy things for the right reason.
I've been to the Corvette factory and also the museum across the street in Bowling Green, KY. I'd like to get one, but I think a Mustang is more practical for New England...
Attempted new signature...

bgf
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Re: Cars... just another tool unless your a tool.

Post by bgf » Tue Aug 28, 2018 7:54 am

the annual depreciation, higher taxes, and higher insurance all make it nearly impossible for me to imagine having anything more than a vehicle that sells for less than $30k new, which i would buy a few years old. we don't have anywhere near a 7 figure net worth.

there will hopefully come a day when my net worth can 'absorb' these financial blows. id love to have a Cadillac CT6 or Lexus GS for example. i wonder if even then id be able to justify the extra money spent on the vehicle v. alternative uses of that money...

not a bad decision to have to make though!
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"

smitcat
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Re: Cars... just another tool unless your a tool.

Post by smitcat » Tue Aug 28, 2018 8:03 am

IMO if you are a real enthusiast about cars (or anything for that matter) it will often follow that you find a more economical method to indulge your passion.
Accumulating money has no purpose other than trading it for something that is important or better yet a passion.
Spending money in areas that are not of real importance to you would be a waste.
Never spending money where you have interest is also a waste.

Each person is different so the choices are vast.

squirm
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Re: Cars... just another tool unless your a tool.

Post by squirm » Tue Aug 28, 2018 8:10 am

I have some family members that act like cars are the best thing in their life. I don't get it either, I just want to get from point a to point b.

I usually get a kick how some justify a car purchase
One cousin said he needed to buy a Prius because gas prices were going up. I told him he'd be paying more in sales taxes alone, not even counting depreciation... All I got back were crickets.

squirm
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Re: Cars... just another tool unless your a tool.

Post by squirm » Tue Aug 28, 2018 8:15 am

We've taught our kids, (I hope) that a lot of people drive cars they can't afford to flaunt their image and a most of those times they're having to make car payments.

surfinagin
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Re: Cars... just another tool unless your a tool.

Post by surfinagin » Tue Aug 28, 2018 8:19 am

A nice car (new or a classic) is discretionary spending. Presumptuous to assume these cars are always purchased only to impress others. Many retired Bogleheads post regarding extensive travel that must easily run well into 5 figures annually. This is also high discretionary spending for pleasure, and I doubt that the travel posts on Bogleheads are to impress others.

Many posters here appear aligned that a car is a tool. That's one perspective.
For some, their car is also a hobby or passion -they spend the $ for that pleasure.
Vacationers can also spend large large sums annually for pleasure, and no residual value as with a car.
If someone has a nice car, takes expensive vacations (or both), and can afford it then they aren't necessarily a 'tool' IMHO.

mak1277
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Re: Cars... just another tool unless your a tool.

Post by mak1277 » Tue Aug 28, 2018 8:20 am

If you think you're better than someone because you drive a cooler car than they do, you're a jerk.

If you think you're better than someone because they "waste" money on a cool car, you're also a jerk.

sjt
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Re: Cars... just another tool unless your a tool.

Post by sjt » Tue Aug 28, 2018 8:27 am

smitcat wrote:
Tue Aug 28, 2018 8:03 am
IMO if you are a real enthusiast about cars (or anything for that matter) it will often follow that you find a more economical method to indulge your passion.
Accumulating money has no purpose other than trading it for something that is important or better yet a passion.
Spending money in areas that are not of real importance to you would be a waste.
Never spending money where you have interest is also a waste.

Each person is different so the choices are vast.
+1.

Cars can be expensive, but so is travel, and boats, and gyms, and fancy dining. If a person wants to spend their money on cars because it's truly their passion, and they can afford it, great. Same with travel - some people love it and for others it's not worth spending on.

No need for calling car people tools...
"The one who covets is the poorer man, | For he would have that which he never can; | But he who doesn't have and doesn't crave | Is rich, though you may hold him but a knave." - Wife of Bath tale

kayakprof
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Re: Cars... just another tool unless your a tool.

Post by kayakprof » Tue Aug 28, 2018 8:35 am

I have one friend who bought a new mustang because "his truck used too much gas." Now he has a car payment with interest and insurance on both a truck and a mustang. All so he could "save money on gas."

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wabbajack
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Re: Cars... just another tool unless your a tool.

Post by wabbajack » Tue Aug 28, 2018 8:36 am

mak1277 wrote:
Tue Aug 28, 2018 8:20 am
If you think you're better than someone because you drive a cooler car than they do, you're a jerk.

If you think you're better than someone because they "waste" money on a cool car, you're also a jerk.
+1

All of life is about signalling. Drive a BMW? You're sending out a signal. Drive a 10-year old Prius? You're sending out a signal. Don't own a car and tell everyone about it? You're sending out a signal - and that signal is obnoxious IMO.

Cars are a growing hobby of mine (I'm getting too old for video games). I enjoy learning about them, reading about them, renting luxury/sport variants of them for days when I'm on vacation, etc. Are they expensive? Of course they are. People people buy things they can't afford all the time - it's not unique to cars. Personally, I like to travel in comfort and never have to question my ability to pass traffic. I suppose I'm obnoxiously German that way.

shell921
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Re: Cars... just another tool unless your a tool.

Post by shell921 » Tue Aug 28, 2018 8:43 am

squirm wrote:
Tue Aug 28, 2018 8:10 am
I have some family members that act like cars are the best thing in their life. I don't get it either, I just want to get from point a to point b.

I usually get a kick how some justify a car purchase
One cousin said he needed to buy a Prius because gas prices were going up. I told him he'd be paying more in sales taxes alone, not even counting depreciation... All I got back were crickets.
I agree! I don't think much about cars and never have. I just want safe and comfortable transportation. But if cars are your thing-more power to 'ya!

dknightd
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Re: Cars... just another tool unless your a tool.

Post by dknightd » Tue Aug 28, 2018 8:44 am

The same can be said about cell phones, internet in your house, TV, granite countertops, etc. So may other things. None of it is really needed.

What are you saving your money for?
If you value a bird in the hand, pay off the loan. If you are willing to risk getting two birds (or none) from the market, invest the funds.

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wander
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Re: Cars... just another tool unless your a tool.

Post by wander » Tue Aug 28, 2018 8:50 am

I respect people's decisions to buy and drive what they like. A car will be stuck with them for many years so it is important to be happy. I happen to drive an old car with 400k miles but I do not pay attention on what people are driving. Actually, I don't know what cars people are driving and who owns what at my company. I have other things to care about.

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Alexa9
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Re: Cars... just another tool unless your a tool.

Post by Alexa9 » Tue Aug 28, 2018 8:50 am

Just shows you how effective marketing is for cars. America is a car focused country with our highway system, the road trip, poor train system, etc. Although Italy and Germany are even more into fancy cars I would say. Japan seems to have it right with economical, high quality cars. I don't knock someone for having a nice car just because I wouldn't do it though.

stoptothink
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Re: Cars... just another tool unless your a tool.

Post by stoptothink » Tue Aug 28, 2018 8:52 am

Valuethinker wrote:
Tue Aug 28, 2018 2:47 am
the ultimate privilege is to live somewhere where you do not need a car, or don't need a second car - neighbourhoods with high walkability scores justify their premiums
Dollar-per-dollar, the singles best ROI from a "consumer" product I have ever purchased was buying a home within walking distance of my office (and subsequently at least 5 parks, several grocery stores, the library, etc.). I could have purchased a bigger home for 15% less 15 miles away, but after living and commuting in major metro areas my entire adult life, I was determined to walk to work. Having been here 3yrs now; with my 7min walking commute, being able to drop off and pick up my daughter at the best stop each morning, riding my bike to the grocery store and library, etc. I probably would have paid double to live in this neighborhood. And long-term, being able to go down to one car and hardly drive it (my wife has a ~3 mile commute too), we'll likely save a pretty penny anyways.

Even with a dual-career household and two young kids who are active in extra-curricular activities, I think there has been one occasion in 3yrs when only having a single car was a legitimate nuisance.

jehovasfitness
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Re: Cars... just another tool unless your a tool.

Post by jehovasfitness » Tue Aug 28, 2018 8:54 am

mak1277 wrote:
Tue Aug 28, 2018 8:20 am
If you think you're better than someone because you drive a cooler car than they do, you're a jerk.

If you think you're better than someone because they "waste" money on a cool car, you're also a jerk.
:sharebeer

signed an owner of a 14 yr old vette... depreciation has flattened out to nil now :D

Wellfleet
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Re: Cars... just another tool unless your a tool.

Post by Wellfleet » Tue Aug 28, 2018 8:56 am

wabbajack wrote:
Tue Aug 28, 2018 8:36 am
+1

All of life is about signalling. Drive a BMW? You're sending out a signal. Drive a 10-year old Prius? You're sending out a signal. Don't own a car and tell everyone about it? You're sending out a signal - and that signal is obnoxious IMO.
Agreed, not having a car is somewhat of a signal of bizarre superiority among many millenials, just like having vegetable farmshare, vacationing in the right spot, etc.

I could have a chauffered tesla to work for the rest of my life for the money I saved on a cheaper house and cheap car.

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Re: Cars... just another tool unless your a tool.

Post by prudent » Tue Aug 28, 2018 8:57 am

This thread has run its course and is locked (not personal nor actionable). General comment threads are off topic in the forums with "Personal" in the title. See: A reminder that non-investing general comment threads are OT
- It must be personal. In other words, you must be asking about your own situation. You can also ask on behalf of someone specific, such as a family member.

- It must be actionable. You must be able to do something specific with the replies that will make a difference in your situation.

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