Author: wizardpc

[youtube http://www.youtube.com/watch?v=BKyV8CTHeJ0&w=420&h=345]

I love cars. I think that’s why I’ve owned so many of them. I’m 31 years old and I have literally lost count of how many cars I have owned at one time or another. I remember having three cars at the same time shortly after I moved to Nashville.

The thing is, the total value of all three cars combined was about $5,000. The most expensive vehicle I’ve ever owned was a 1997 C1500 that I paid $14,000 for in 1999. The cheapest vehicle was a 1992 Saturn SC1 my brother got for $300.

Guess which one I lost more money on? The thing about a $300 or even a $3000 car is they’ve pretty much lost all the value they can. I had that truck for three years and got $6000 for it after having it on the market for about 4 months. I bought my 1999 Jeep Cherokee 4×4 with 95k on it for $4000 in 2008 and 50,000 miles later I can probably still get $2700 for it without even trying hard. $3500 if I detailed it. Even if you factor in the small repairs I’ve had to do I come out WAAAY ahead compared to someone who buys a new car.

A lot of times people say they need “nice car” because they are reliable. Well, all cars are reliable until the day they aren’t. If you find yourself in an unreliable $1000 car, go find a reliable $1000 car! You could get a different $1000 car every other month and STILL be ahead of most people since even a non-working car will easily bring $300. (Though I don’t advocate this as a plan. Buying a car is a PITA because of all the government-mandated crap you have to go through.)

One of the things we’ve sacrificed is newer cars. My wife drives an Accord worth probably $2500 and it’s exactly the car she wanted for the money we had at the time. I only pay cash for cars. If I need a new car and only have $1000, I buy an $800 car and then pay sales tax and tags. That car was a 1995 Plymouth Neon affectionately called Barney. I bought Barney in 2007, put 16,000 miles on him, and then sold him with non-working air conditioning for….$800. Barney was never in a shop, either. That was probably the best car deal I will ever get.

I say all that to say this: You should probably sell your car if you ever want to get out of debt. That $500/month payment is just a huge boat anchor around your neck, and that’s not even considering what your insurance cost is. Do you know how much insurance is on an $800 car? Like $18 a month. I think I paid $40/month when I was single and under 25, because all you need is liability.

And I gotta tell you, after driving sub-$3000 cars for almost ten years now, I would be uncomfortable driving a $30,000 SUV.

Do I plan on driving $3000 cars the rest of my life? NO! Hell I’m probably buying a $7,000 car later this year and I’ll be slightly paranoid driving that one! The rule about anything with a motor is that, combined, the total value of all vehicles (including boats, ATVs, motorcycles, etc) should be less than half your household annual income. And you should pay cash.

Will I ever buy a brand new car? YES! ABSOLUTELY! I have promised the wife that when we have a million dollars, she can get a brand new car. Since my retirement goal is somewhere north of $17 million, she’ll get that car eventually.