This year, the automotive industry will spend $44 billion convincing you to buy a car. That’s more advertising dollars than any other industry – more than than food, pharmaceuticals, retailers, communications… and yes, even those damn iPhone ads.
Yes Verizon-now-Sprint guy, I can hear you now, and I’ve been tired of hearing from you for the past 10 years.
To be fair, huge advertising budgets alone aren’t always bad. In advertising, there are times when a product is so revolutionary that significant marketing is necessary. This is called marketplace education; people can’t buy what they don’t know exists.
The trouble is, we all know cars exist. They’ve been around, getting us from A to B for a hundred years. In fact, not a whole lot has changed in the car piloting experience since the 1908 Model T, and certainly not enough warranting billions of dollars spent in marketplace education, year after year.
In fact, not only do we all know cars exist, we are all intimately familiar with their existence. Because we already have a car.
In other words, the car manufacturers will shell out $44 billion dollars this year convincing you to feel insecure about your perfectly cool ride.
To which I say, “Screw you guys, we love our old cars!”
Then I’ll write an article about why we should really appreciate those old cars for the money saving machines they are.
No, you don’t have to bike to work every day to become rich.
First thing’s first, let’s get this disclaimer out of the way. Sure, we could all save money by not driving at all. There are plenty of other websites providing solution based articles discussing:
- How to not smell like a sweaty gym locker room after biking your way to work in the morning.
- How to iron your wrinkled up work clothes after a long bike ride.
- How to emergency patch a hole in your dress pants, because you decided to wear them during your morning bike ride instead of performing frantic post-bike ride ironing every day.
I love a biking more than anyone, but I’ll be assuming you do want to own a car for one reason or another. My job is to make sure that car you want to own is a little more reasonable than what the automobile marketing machine will have you believe.
Shocking Discovery Reveals Cars Are Actually Pieces of Metal
Maybe I learned this obvious reality a little later than most. My epiphany moment came when I was a teenager, and I chanced into a trip to the BMW North American Manufacturing Plant. We would be watching the creation of the BMW X5, a racing inspired luxury SUV which retailed for up to $70,000.
Needless to say, my teenage mind ran wild with the thoughts of watching the creation of such a glamorous car.
“Anticlimactic” would be a nice way to describe the experience. “Holy cow these guys are marketing geniuses,” would be another.
For the first hour of the tour, the car costing as much as some houses could have just as well been a go-cart, for all I knew. Slowly though, the assembly line added piece after piece of metal, plastic, and steel to the car. It wasn’t until all of the boring mechanical materials were in place that the vehicle’s recognizable shell was placed onto the car.
Literally dropped down, like a mask.
It was at that moment that I realized; the look of the car we all love is not particularly designed for performance or purpose. Instead, each curve, contour, and color is strategically designed for the widest appeal to the target demographic.
Which makes this whole industry a sham.
That sports car isn’t a race car, and that SUV isn’t a military grade cargo vehicle. They’re both shoddy imitations, with looks and features designed to trick us into believing that’s what we want.
No matter the price tag or the design, a car is still a collection of metal, some plastic, and 4 pieces of rubber. A car is not a racing machine to impress your friends, and it’s not a portable sculpture worth financially ruining yourself over.
The last piece of tour’s assembly line was attaching that signature BMW logo to the hood. You could almost hear the executives saying, “Aaaand there’s the last $50,000 of the sticker price.”
I know, I know… You’re a car enthusiast. You appreciate all the beauty and the features and the driving experience.
I am too. I also enjoy beer, but I don’t throw aside my finances or freedom for beer. That would make me an alcoholic.
Chasing an expensive car while you still have to drive said car to a job you need, isn’t that a bit like the old expression? Putting the cart before the horse?
Or should we say putting the car before the life?
In the first quarter of 2016, American car borrowing reached an all time high. For the first time in history, the average auto loan eclipsed $30,000, for an average car payment of $503 per month.
Now is the part of the article where I run a compound interest calculation to show that $503 per month over enough time could grow to nearly $1.2 million, but I’ll resist the temptation. Won’t say a word. Moving along now…
Why You Can’t Stop Craving that New Car Smell
A few months ago, I decided I wanted a new laptop. I didn’t really need one, but hey, it sounded like a great idea.
I searched high and low on the internet, and I found my perfect laptop at a decent price. I was completely sold, but because I’m a naturally cheap bastard, I closed out my shopping cart and decided to wait a few days before I pulled the trigger.
What happened next? I forgot.
I mean I completely forgot I even wanted a new laptop at all. I simply got busy doing other stuff, and because the average person doesn’t roam the streets with an Asus Zenbook Laptop in hand, I moved on. When I realized how forgettable my desire to upgrade became, I took it as a sign form the skies that I’d be just fine without dropping $700 on an unnecessary upgrade.
Unfortunately, the average person does roam the streets with a new car.
It’s called the morning commute. It makes “out of sight, out of mind,” an impossibility for a car upgrade, and even a $44 billion advertising budget can’t hold a candle to its effectiveness.
Every morning, as we’re stuck in traffic commuting somewhere we don’t want to go, we’re a captive audience to the newest, latest, and greatest of the car industry.
Hood ornaments with the manufacturer’s marketing logo are prominently plastered on the car’s most visible locations, turning each vehicle on the road into a driving billboard.
- “Driving by your left is the completely redesigned 2017 Audi A3.”
- “Look at the gracefully refined Cadillac CTS accelerating past you.”
- “Turning to your right is the adventurously bold new Jeep Grand Cherokee.”
We can’t drive anywhere without seeing a parade of new vehicles, all peddled by slave labor sales reps, who fork out an average of $503 per month for the privilege of promoting their recent purchase to everyone within eyesight.
You don’t have to be an indebted salesmen though. If your car is running without huge necessary repairs, you already have a great car capable placing you right between the crosshairs of “Wealth” and “Freedom” for as long as you choose to keep it around.
Pressing ‘X’ on the marketing machine by loving your old car
You remember your old car right? She’s sitting in your parking spot or garage right now, ready to start right up for you and happily transport you wherever you wish to go.
Sure, maybe she’s had a few hiccups along the way, but for thousands upon thousands of miles, you two have been there for each other.
While your friends have already bought status symbols to show off their drained bank accounts, she’s been there for you, silently making you a millionaire.
Every month she stays around, she’s writing you a $503 check. Enough money for a vacation per month or a future million dollar bank account. Take your pick, because either is more life improving than upgrading to a push button ignition.
Lifting up your keys and turning the ignition is not making your life worse, I promise.
Sure, maybe there are a few scratches in the paint these days, but that just means you can now enjoy ramming shopping carts out of your way, completely stress free. And maybe the interior is scuffed up, but at least you can breathe easy when that messy friend of yours decides to eat his Chinese take-out right there in the passenger seat.
Your old car is there for you, wanting to make you rich. Let it.
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Although I recently bought a used car, I really enjoyed reading this article. But the only reason I upgraded my old friend maintenance cost was too high. It was inevitable to buy a one and make use of it at least 8-10 years.
No shame in that. There are times where the maintenance becomes too much. My truck needs nearly $2,000 in repairs, and although I wish I could keep it forever, 14 mpg is just proving too costly. I’ve implemented this article’s strategy for the past several years, but I’m finally car shopping.
The trap comes when people upgrade just because they want something newer, or just because they want that push button start. Even when car shopping, it’s so easy to fall into the “just a little bit nicer (and more expensive)” trap.
Mr. Mt recently bought a classic car, a real beauty, but it only set us back $5,500. Other than that splurge which we traded a decade of cable TV for, I am not a car nut at all. I have no issues driving my 14 year old honda civic. I love that little car. =)
That sounds like a deal!
Jealous of your 14 year old Honda. My 13 year old truck has reached the end of it’s useful life. I hope to drive my next car even deeper into the ground than my current one.
It’s great to hear this! Personally, I am a bit of a splurge when it comes to cars. I’m really into the electric car movement, but also try to be as efficient as possible with my money. I bought a used Volt a while back, but with all the excitement with the upcoming Tesla Model 3, I’m having trouble not choosing to upgrade. It seems like everyone around me encourages me to waste my money, when my current car is plenty luxurious as it is (and paid off). This article helps me stand up to the pressure! I’m not alone – and financial security is more important that fancy new cars!
Stay strong Austin!
I’ve also gotta think the Model 3 will come down in price once the original hype calms. That thing is experience iPhone levels of hype right now.
Everyone loves watching you spend money for their entertainment. They’re not the ones living with the deflated bank accounts though.
Gosh you’re such a good writer. The last couple paragraphs are full of tweetable comments including. “Your old car is there for you, wanting to make you rich. Let it.” I love it! Keep em coming!
Hey thanks Quin! It’s really motivating to hear that. Gonna get to writing more right now!
This reminds me of a post I wrote earlier this year called “Why I Drive An Ugly Car.” 🙂
http://www.zandria.us/archives/main/2015/12/09/why-i-drive-an-ugly-car/
Nice article Zandria. There’s something incredibly satisfying about gaming the system and driving an old beater around everywhere.
I have the exact same car and it still runs very well! There’s a big hole on the front passenger side bumper and I could have gotten it fixed through my insurance (I would have had to pay a deductible though) but I didn’t. 1. I didn’t want to spend $800 (CAD) to fix it, 2. Would-be thieves probably wouldn’t want to steal my car, 3. It adds character. I plan to driving it until it dies but given the low mileage (~190,000 km), it’ll probably be at least another 5 years or more? =)
My husband and I drive a 2001 Toyota Camry that was a gift from an elderly relative. The relative in question, may he rest in peace, backed the Camry into a park bench nearly 60 ft. from the roadside and decided it was best to pack in the keys. That was back in 2006. The green paint tinted hole remains in the bumper and makes me smile when I’m loading my groceries. We have added two large dogs to our family, so now the Camry has a custom bench seat for maximum dog riding comfort, built by my handy husband. We have driven that car all over Oregon, across the west, and on many an adventure with 200 pounds of dog happily hanging out the back windows. Believe me, we get a lot of funny looks! The trunk on any given day has a residue of beach sand. The floor mats often have to be hosed off because of all the hiking boot mud. The Camry didn’t cost us a dime, but has been worth her weight in gold. So many memories and smiles from a now 15 year old car. And memories aside, the car regularly gets 33 mpg. We are puzzled by this as it is higher than expected, but our calculations always come out the same.
Occasionally I get the bug to buy a new Subaru, which seems like a mandatory vehicle in the PNW. It is always quickly cured by a.] an adventure trip with the Camry or b.] looking at the payments a new Suby would demand. Yikes. As suggested by the awesome Wizard, those payments would buy a heck of a lot of fancy weekends on the coast or in the mountains.
MontanaA… You have my dream car. Not even the most expensive car in the world can buy that sort of character.
Awesome story, thanks for sharing.
Great Article! Had me laughing through most of it.
Downgrading my car was one of the best decisions I’ve made in the last year. I got a used 2010 Toyota RAV4 for $10k. I plan to drive it for the next 8-10 years + until it dies on me. I was able to pay the majority of the $10k in cash. Also through the process I’ve become more handy, doing the oil changes, maintenance, repairs myself.
It takes a lot of willpower to avoid the temptation to upgrade. It’s even more badass to downgrade! So cool to hear.
I sold my car a couple months ago and never looked back. I recently moved into a city with decent public transportation to my work…less than a 20-minute commute. I decided to sell it when I realized that the only reason I kept it was because I attached it to my self-identity of success and worth in return for no material benefit. I had been convinced by advertisers that the way to communicate my success and self-worth was with a luxury car. When I understood how twisted that was, it was an easy decision to sell the car because I do not enjoy being manipulated.
Cars can be a colossal waste of money. More so than things like houses and a college education because cars, being the largest single expense outside of college and houses, are guaranteed to depreciate. Not only are there the obvious depreciation, maintenance, and opportunity cost of not investing, but there’s the one offs from things like car washes, the major maintenance milestones like tires, brakes and timing belts, in addition to unforeseeable costs like break-ins and side swipe hit & runs that could incur insurance deductibles. Everyone in America is spending more than they should on everything. We’re over budget on rent, buying depreciating new cars we can’t afford to begin with, spending too much on college, having kids we can’t afford, and not saving for retirement on top of all of it. How has the system not imploded yet?
Love the angle you take here, strip any car down to the frame/parts, and they all look the same. What a great way to look at things. Some of my worst financial decisions have been car-related, but the best ones have been as well. I’ve certainly learned a lot over the years. Great post!
What a great article! I own a 2009 Mazda CX-7 and a 2006 Ford Mustang. Both run fine with only minor issues, at the moment.
My husband and I have both considered trading in either, and financing something a little less used.
Your article has only helped me to reduce my urgency to upgrade. If it’s not broken, why fix it?!
Appreciate you taking the time to write this, and for your awesome ideas.
Way to go Maria! Your wallet will thank you. 🙂
Very good article, I can just agree with you.
I have also made this change of view in the recent years. Before that I have been thinking from all kind of things like if they were an unmodifiable, impartible final things, but when you disassemble something you
will see that its nothing special just another man made stuff.
We have a Fiat Punto S which will celebrate its 20th birthday next year. My wife owns it since 2003 and we were absolutely happy with it through the years. Now its our family car and still averages around 32 MPG. Lately it started to show some failure wannabes so I assume we have to think about the replacement, but we want to have it running until it can. If we have to replace it I think another reasonable used car will be solution, maybe a 1st generation Honda Jazz (Fit in the US).
Keep it up!
Money Wizard, great article!!
Every time I spend money (>$750) on repairs to my 2003 Yukon OR my 1997 Acura 3.5 RL (both averaging over 161000 miles), I am motivated to drive them for another 10K miles – until they refuse to run. I bought both of these ‘used’ cars more than 13 years ago. For me, Its VERY VERY tough to avoid the temptation of wanting to own a new car in this day and age when a) tech is revolutionizing the auto world AND b) seeing some of my buddies show off their new toys…and I just remind myself of 3 things
– my current net-worth
– my goals for the future
– the best is yet to come – in the auto-world that is 🙂
Nothing like a used car that keeps on running.
Keep up the great work. !!
Very jealous of your old rides! Especially since mine recently bit the bullet. Keep em alive as long as possible, you’ll miss them when they’re gone!
I once knew a couple in their 20s who I tried desperately to convince to save in their 401ks. They just kept telling me they didn’t have the money while at the same time each buying brand new cars. I often wonder what kind of financial shape they are in now. When my husband and I were in our 20s, we drove a used, beaten up chevy and a 10 year old Ford pickup – all the while socking away money for retirement. We made very little then but if you start early and invest wisely, even a little can grow to a substantial sum. Now in my early 60s, I’m getting ready to retire with the nest egg of someone making twice our income. Even now, when I can afford to buy a very nice luxury car – I buy the car and then keep it for 10 years – or more if possible.
Logic still applies. Repairs on some luxury car with all bells and whistles known to mankind, simply cost a lot to keep going reliably in old age.
Compare that to an older bare bones model. Rear wheel drive, manual transmission, 2 valve per cylinder OHV cast iron engine that you can rebuild whole engine for much less than relatively simple repairs cost on most modern high tech models. If you get a manual transmission that is fairly robust (some were marginal for size engine they were attached to and self destructed), replacing a clutch on rear drive yourself isnt that big of a deal. Less than couple hundred for parts, some less than that. And not too expensive to hire done, least cheaper than rebuilding one of these modern electronic automatics with 10+ speeds. People buying new cars dont consider what it costs to repair that shiny wonder they see on dealers lot. Lot older cars that still have solid body and even good running engine go to junkyard cause of cost to rebuild the high tech automatic transmission.
My notion a car should be mechanically simple enough that the only thing to force it to junkyard is that body/frame is rusted out or was too damaged in accident to make it worth repairing.
Great article. I drive a 2001 Bonneville with 328,000 miles on it. I tell my son, who is 16, all the time that driving it saves me about $500 a month. He is starting to get it. I hit a deer with it last year and he told me if I could get it drive-able for less than $500 I should keep it. Still driving it even if it is ugly.
Nice article. The Lexus ads on this page however won’t lure me into trading-in my fully-paid off 2003 GMC Yukon (184,000+miles) on it…still going strong. There’s no paint on its top, but the interior is still superb, and drives just fine.