I am 32 years old, and I’ve owned more than 30 vehicles.
This includes cars, trucks motorcycles and scooters that have varied in quality from not-even-close-to-roadworthy, through to brand-new off the lot.
For the last year and a half, I’ve been riding a brand new motorcycle. I bought it off the lot and justified the expense as “worth it to have something reliable”. I also told myself that I work hard (which is true), and I deserve a new toy (which is not true).
A couple of months ago, my wife and I decided to get serious about living the rest of our lives debt-free, and I knew that the motorcycle had to go. The bike was still worth more than $4000, and I knew that I could get a functional car for a fraction of that, so I began shopping.
(I still had a loan on the motorcycle when I made this decision. If you’re in this position check out this post on how to get out of a car loan.)
A couple weeks of deal-hunting on Craigslist and two ferry rides later and this is what I ended up with…
In case you’re not familiar with this car, it’s a 1991 Chevrolet Sprint. AKA Geo Metro, AKA Pontiac Firefly, AKA Suzuki Swift AKA…you get the idea. It packs a mind-blowing 48 horsepower and can run 0-60 sometime between now and tomorrow.
Right back where I started
Now to understand the significance of this, you need to know that my very first car 17 years ago was a Chevrolet Sprint like this one. A few years older, but more or less the same car. I’ve been through a whole lot since then, and it’s a little humbling in my mid-thirties to be driving the same car that I was at 16. It didn’t help that the first night I bought the thing I was driving home on the highway and two girls pulled up beside me in a brand new car, pointed, laughed and drove off.
It’s also worth mentioning that as a professional marketer, it is a little bit embarrassing to be driving something so humble, (I chuckled when I saw M$M said more or less the same thing about a Chevrolet Colorado, a much nicer vehicle). Others in my age/income bracket are driving around in brand new cars and I’m shifin’ gears like it’s 1992.
My car is a status symbol
I’ve always said that I would never own a car as a status symbol. The truth is though, it’s really not up to me. Whether I like it or not, people are going to make judgements about me when they see what I drive. Most will assume that I’m unemployed, broke or both and can’t qualify for a car loan.
A friend of mine who is in his fifties and has never owned a new vehicle congratulated me on the purchase and said something that stuck with me: “If you drive this for five years, you’ll be able to drive whatever you want for the rest of your life.”
That’s some straight-up truth right there, and that’s what I’m focusing on when I drive this thing to work everyday. It’s all about making some sacrifice now so that I can put my family in a better position down the road. A little sacrifice never hurt anybody right?
Saving a ton of cash
Here’s the thing, I’m saving a ton of cash by driving this car. If I had bought a new car, assuming I’m average, I’d be paying $570 per month for at least five years. That adds up to more than $32,000 in total that I’d dump into a vehicle that if I’m lucky, would be worth half that at the end of my loan term.
Add to that the fact that insurance on a new car would cost me more than double what I’m paying for this thing and you’ve got another $700 per year in savings. And of course there’s fuel. I measured at the last fuel up and this car got 48mpg which is incredibly high for a non-hybrid. There’s only a few modern cars that can touch that mileage and they’re all significantly more expensive.
What about a warranty?
I’m regularly trying to talk my friends out of buying new cars. Every time I have this conversation, the same thing comes up: “I really want a warranty so I don’t have to pay for repairs out of pocket”.
The math simply doesn’t work on this one. Let’s assume that my wife’s 2005 Dodge Caravan has the most expensive breakdown possible and suffers a catastrophic engine failure. This of course is unlikely, but possible. Having a good, used engine installed would cost somewhere in the neighborhood of $3500, or a little more than 6 months worth of average vehicle payments.
What I’ve learned is that getting out of debt is hard. Budgeting is hard, and you need to make tough decisions if you want to be successful at it. I would much rather be driving something German with heated leather seats and a bit of street cred but that wouldn’t help me pay off my debt, pay off our house and move us forward on our path to financial security.
For the time being, I’m going to keep driving my beater and remember all of the money I’m saving. A few chuckles from strangers never hurt anybody.
What hard decisions have you made in order to get your finances on-track?
- Tangerine Review 2020 – Best Online Bank In Canada? - April 14, 2020
- EQ Bank Review 2020 – The Best High-Interest Savings Account In Canada? - March 31, 2020
- 15 Smart Money Moves For Canadians To Make During The Coronavirus Outbreak - March 28, 2020