Have you ever found yourself secretly hoping something breaks just so you can justify buying a new one? I’m certainly guilty of that when it comes to cars. I’ve been eyeing a new ride because, honestly, I miss the thrill of driving something different, something I used to indulge in by trading cars every year on Craigslist. My current car, Moose, is great—so reliable and charming that even the ladies love him!
A year back, Moose’s passenger seat electronics gave out. I didn’t fix it because the seat was stuck in a surprisingly comfy position. But I told myself, the day the driver’s seat goes, I’m getting a new car. Week by week, I found myself wishing for it to break, just so I could have a good excuse to visit the dealership.
Heading to the Dealership
Once at the dealership, basking in the new car smell, I was tempted to trade Moose in. But when I mentioned the faulty seat, a serviceman quickly fixed it by simply changing a fuse. Just like that, my car was “as good as new.” Suddenly, my justification for a new car vanished as quickly as it had come.
Deciding Against a New Car
Moose is more than just a vehicle; he’s part of my life. The idea of replacing him felt wrong, especially over a minor issue that was fixed in minutes. Plus, the cost of a new car didn’t seem justifiable anymore. It reminded me why dealerships keep their service and sales departments separate!
Financially Wise Car Ownership
Changing cars often is one of the financially imprudent things you can do if your budget doesn’t allow for it. You lose money on taxes with each purchase, possibly face higher insurance rates, and there’s always the risk of landing a lemon.
Cars are notorious money pits. I always recommend spending no more than one-tenth of your annual income on a car. If you’re lucky enough to find a reliable one that gives you little trouble, stick with it. Buy new only if you truly need to and can afford it without breaking this rule.
Better Investment: Real Estate
Instead of splurging on a depreciating asset like a fancy car, consider investing in something that could appreciate, like real estate. Real estate investing, especially in growing regions like the Sunbelt, can offer better returns and more financial security than the flashiest car could.
For those interested in real estate, platforms like Fundrise and Crowdstreet make it accessible. Fundrise allows you to start investing in diversified real estate with as little as $10, focusing on residential and industrial properties. Crowdstreet offers opportunities to invest in individual deals, giving you the chance to build a personalized portfolio.
Since 2016, I’ve shifted nearly a million dollars into private real estate, diversifying away from the pricier San Francisco market to capitalize on demographic trends and seeking more passive income.
So, while the allure of a new car can be strong, I’ve learned that the smarter financial path is often in holding onto what you have, especially if it still serves its purpose well. Investing in assets like real estate can not only provide better financial returns but also contribute to long-term wealth building.
