If you’re hooked on cars, you’re in good company. In my 20s and early 30s, I went through eight cars in ten years. It was clear I had a problem. Back when I started Financial Samurai in 2009, I was all about cars. Fast forward to today, and my priorities have shifted towards safety and reliability, especially with a family in tow. Though I still enjoy a good ride—currently a 2015 Range Rover Sport.
By mid-2025, my car will be a decade old, and while I’ve thought about getting a new one, the sky-high prices of luxury cars have put me off. If financial independence is your goal, stick with something affordable and reliable for as long as possible.
When I received my first paycheck, I splurged on a Volvo 850GLT and a Honda CBR600 racing bike. But living in NYC meant parking them 20 blocks from my apartment and shelling out $300 a month just for the privilege. It seems ludicrous now.
We all have our splurges—some people collect designer bags and shoes. But cars? They can be a financial black hole. After buying and selling eight cars, I’ve picked up a few tricks to get the best deal and satisfy that car craving without breaking the bank.
Cars are pricey. With costs like insurance, maintenance, and depreciation, it’s easy to blow your budget. That’s why I swear by the 1/10th Rule: spend no more than 10% of your annual gross income on a car. If you’re making $40,000, that means $4,000 max on a car. City dwellers, especially, will find that cars can be more trouble than they’re worth with all the additional expenses.
If you can’t stick to the 1/10th Rule, here are five tips to help you snag a great car deal:
1. Avoid buying new. Cars last much longer these days—thank you, advancements in technology! A three to five-year-old car will give you the best value, missing that initial depreciation hit.
2. Hunt online. Websites like Craigslist, eBay, or Autotrader are gold mines for car deals. Most of my car transactions happened there, with Craigslist being my go-to.
3. Compare and negotiate. Always check the car’s value on KBB.com and aim to pay at least 10% less. If you’re selling, try to get close to the KBB price—buyers feel they’re getting a deal with even a slight discount.
4. Be patient. The best deals come when sellers need to move fast due to life changes like relocation or financial stress. Show interest, be ready with cash or financing, and sometimes, a quick, smooth transaction is more valuable than a rock-bottom price.
5. Pay for an inspection. Spending a little up front on a thorough check can save you a lot from unexpected future costs and help in negotiations if issues are found.
Over the years, I’ve shifted from a car addict to a more financially savvy enthusiast. I enjoyed my cars but realized they were poor investments. In 2006, I bought an SUV and kept it for eight years. My latest car is a Range Rover Sport, chosen for its safety as we were expecting a baby. I’m planning to keep it until 2025 or 2026 and then decide on my next move—possibly electric, despite the high costs and my concerns about charging infrastructure.
Here’s a tip if you can’t shake the urge to buy a car: go test driving. It’s like window shopping. You get the thrill without the expense. Leave your credit cards at home to avoid temptation. After enjoying the new car experience, you often realize your current car works just fine.
And instead of splurging on a new car, consider investing in real estate. Platforms like Fundrise make it easy to invest in properties without the hassle, letting your money grow and bringing you closer to financial freedom. So next time you get a raise or a bonus, think twice before running to the dealership—your wallet and future self will thank you.
