Man have I got a deal for you! You are going to buy something for a large upfront cost. This item is going to go down in value as soon as you buy it. Not only that, you are going to keep spending money to maintain it. And then, after you have it all paid for you are going to get rid of it and do it all over again.
If someone presented you with that scenario you would probably want to punch them in the face.
And yet most of us do exactly this when we buy…a car.
Look, I am a car guy. My dad and his dad before him were car guys. I love looking at cars and reading about them. I like going for drives. I know, I know, not good for the environment at all.
Is it in our North American culture? Maybe.
As teenagers we are told that getting our license is the first step to freedom. And this may be true to some degree.
But when you think about it, that is the start of a “marriage” with cars. Once you get a car you have this item that ends up costing you soooo much money.
A car is NOT an investment. An investment is something that makes you money. A car does not do that.
A car depreciates. It loses value. We all know this I think and yet every few years off we go for that kick-in-the-groin experience of getting a car.
The average per year that we now spend on our vehicle is about 10000$. Less for small cars, more for trucks and SUV’s. This is payments, insurance, fees, and maintenance.
Let’s not forget that a lot of households have 2 vehicles these days.
The thing I was wondering is if a person did not have a car would they save that much money? I mean actually sock it away? Probably not.
Here in Canada we are paying about 1.40$ per liter of fuel. That works about to about 5.00$ per US gallon. Yes you read that right American readers.
“But I need a car!”
Really? You NEED a car? Okay, if you have CHOSEN to live in a more rural area then yes, maybe you need wheels to get around.
If this is you I would encourage you look at getting quality used vehicle from a reputable dealer. Someone else has taken the big hit on the depreciation.
So if you want to save some serious coin, forgo getting a car. Try to walk, bike, or use public transit. If you need a vehicle for a weekend, rent one or borrow a vehicle from a friend.
Put the money you WOULD be spending on a vehicle each month in a savings account. At least 300$ per month.
This whole idea may take a total change in the way a lot of us think about our lives and how we actually live them.
And maybe that is the whole point of this post.
Please share this post with the universe.