You may be asking yourself, “should I buy an expensive car?”
The short answer is you should NOT!
Instead of buying new car buy a used one, instead of buying fancy car buy a simple one, and pay cash instead of financing. You will save a ton in car payments, interest charges, registration fees, and insurance. Even if you have to pay more in repairs I guarantee that’s going to be less than the other increases.
That being said, there are times where you can buy a new expensive car with fancy features like the ability to drive 170 mph and seat coolers (my favorite). When can such a purchase be justified? Under a couple unique circumstances it makes sense. You can figure it out by asking the questions below…
1. Are you Jeff Bezos?
Jeff, if you are reading this you have done well as the CEO of Amazon and you now have my permission to buy a car with seat coolers with the $90 billion you’ve made. Thank you for asking, and enjoy.
2. Is a car more than transportation to you?
I’m not just saying do you care about looking cool in the car, I’m asking if you are the type of person that treats their car as transportation, hobby, and entertainment? Do you plan ahead of time to go on a drive to no where for fun? Do you take it apart and want to switch out parts for an extra 3 horsepower? Are you going to buy clothes showing off the type of car you drive? Do you do a full detail on your car once a week?
If you answered yes to the questions above you MIGHT be able to justify buying a fancier car. For some people the car serves double functions as the transportation part of their budget as well as a lot of entertainment. If you think this is you make sure the car fits into your budget. Figure out how much more the car you want would cost than the standard used one and take into account interest, registration, insurance, fuel, repairs etc. (also remember that a $100 repair on your Honda Civic is likely going to cost $600 on your BMW 3 series). Then make sure the difference is taken out of the entertainment portion of your budget.
If you answered no to the questions above, do NOT buy a fancy new car.
So many people make absolutely terrible decisions when it comes to car buying. Being smart in this arena can save you thousands a year!
