My brain doesn’t shut off at night. What popped into my mind last night? How much I’ve spent on cars. I was thinking, “Wow, I’ve already paid off three cars in my lifetime!” But that’s actually not a good thing.
A Habit Of New Cars
I’m not a car hobbyist by any means, but I seem to spend a lot on cars. The amount I’ve spent so far in my life honestly makes me feel a little ill. Here are some really rough numbers, since I don’t remember exactly how much I spent on my first two cars:
In late 2004 I got my first car. I was 18 and it was a 2004 Kia Rio. In high school my dad and I were building a jeep together and the plan was that I’d drive the jeep. When my parents moved south and I stayed up in Minnesota alone, the jeep didn’t seem like the best idea. My parents recommended a Kia Rio. It was $10,000 and I put about $2k down from my savings from boot camp. (I love my parents, but I don’t think I’ll recommend my kids get a new car for their first car, considering I promptly crashed my Kia twice.)
I paid off the Kia while I was in Iraq. When I came home from Iraq all of my military friends were getting new cars. It was the thing to do after deployment. I held off for a few months, telling myself my Kia was new. Really, I’d only had it about three years and was gone for two of them. The Kia was very basic, and on a trip to visit my parents I borrowed my Dad’s Mustang with power locks and windows. That was all it took. In late 2007 I went and bought my dream car at the time, a 2008 Mazda 3. (Oddly, the same car that at least four of my friends bought upon returning from Iraq.) I think I actually got about $5k for the Kia. I can’t remember how much I put down, but I think the total price of the Mazda was about $23k.
I worked aggressively to pay off the Mazda and did so in just a few years. I enjoyed life without a car payment for another year or so when the design of the newer Volkswagen Jetta started to catch my eye. A few of my friends had them and I’d heard great things, especially about the TDI and the gas mileage you can get with diesel. Shortly after starting a new career (error #1), I went and bought a 2012 Jetta TDI. I think I only got about $8k for my Mazda because there was some hail damage (I had cashed the insurance check instead of getting it repaired. Error #2) I also bought a new house within the same timeframe. (error #3) Really, I was pretty foolish with my spending here. And Simply Save existed at this point! The only smart thing I did was get a 2012 instead of a 2013, because they looked identical and the 2012 had lower interest. The VW was about $30k total.
Feeling queasy yet? I’m 28 years old. In 11 years I purchased (and paid off) three new cars. I’m not saying that because I’m proud. I’m saying it because I’m kicking myself and I hope you learn from my experiences. I was really conservative with those numbers, since I don’t remember the exact cost. I erred on the side of estimating low.
Price of all three cars: $62,000
Minus trade-in savings: $49,000
In eleven years I spent $49,000 on cars. Likely more.
This is not including the cost of interest, fuel, maintenance, insurance etc.
Imagine what else I could have done with that money! Imagine how much it would amount to if I’d have invested it instead! Or even just think of how much I’d have saved if I bought the same three cars used instead of new.In eleven years I spent $49,000 on cars. Likely more. Click To Tweet
Beyond my first car, it wasn’t really necessary to buy any of the next ones. None of them had to be new and there was really no reason to upgrade. And notice how the cars themselves increased in price. It’s not a good habit.
We all make mistakes, but we can take something positive away by learning from them. I plan to drive my VW until it drives no more. Some days I’d love something bigger for hauling bigger items, but it’s not worth the fuel cost for me. I don’t plan to have kids, so this car should fit my needs for a really long time. My next car will be used and I will not be financing it. I’ll pay in full.