Car Tips For The Money Mindful- Pick The Right Luxury Wheelchair
Hello dear,
Is it just me or is it allergy season??
For the past few days, my daily walks end with my eyes looking like Kaecilius’ from Doctor Strange.
Someone recommended Zyrtec, but I’m not a fan of drugs. Do you know something better for allergies? (Preferably, something that doesn’t include side effects like dizziness, drowsiness, dry mouth, and the white of my eyes turning yellow).
Anyways, that’s not the point of today’s letter.
Yesterday, someone emailed me asking for car advice. So, I decided to turn that advice into today’s letter!
Onward.
1. Should you even own a car?
If you can avoid it, no.
I’ve written about this more on Letter 14.
If you walk or bike to work, you’ll be healthier than a driver (and you won’t risk being one of the 25% of Americans who gets in a car crash over a 5-year period… 25%!!).
A friend of mine lives in San Francisco and doesn’t own a car! After doing the math, he realized Uber costs less (points for Travis Kalanick).
Sidenote: Ramit Sethi hilariously talks about the real cost of car ownership in this video.
Having said that, this only works in a compact city (like San Francisco or New York), because that’s where you can live within 5 miles of everything you need.
However, if you live in a city where car ownership is obligatory (like Los Angeles), keep reading.
2. How to pick the right car?
If you must have a car, follow these tips.
What car?
Keep it simple, cheap, and reliable.
Ramit Sethi recommends a Honda Accord or Toyota Camry. Mr. Money Mustache recommends a Honda Fit or Scion xA.
Whatever you do, stay away from SUVs! That’s financial suicide.
“But I have a big family and lots of people to drive around.”
That’s a bunch of hogwash. You still don’t need an SUV. Mazda 5 is the car for you.
What year?
I like simple rules of thumb. Buy a car that’s maximum 6 years old. Sell it after 7 years.
How much should I spend?
Since you’ll always buy used cars, the minimum is $5k and the maximum is $15k.
This is much better than the average $33,560 Americans spend on cars (if you spend more, you’re probably a millionaire so it’s ok).
Keep in mind, a car is probably the worst financial move anyone can make. Not only is it a depreciating asset, it’s also the second largest expense after housing (if you make $50k–$70k a year, about $10k will go to your car).
Don’t go crazy buying one of those.
What about the mileage?
Keep it below 100,000 miles (of course, the lower the better). Anything over 150,000 miles and you’re probably inheriting unwanted maintenance fees.
Of course, this also depends on how much you drive. That makes the difference between the car lasting you one year, or seven.
Sidenote: Some of you might call me weak, but I admit I’m not badass enough to be part of the 200,000 mile club like these guys.
When can I get a Tesla?
Oh trust me, I’m with you.
First of all, I answered this on Letter 5.
So let’s say you have no debt, no mortgage, AND you have enough money to buy the car in cash? You can wait for mid-2019 and get a used Tesla Model 3.
“But what about the Tesla Model S?” Yeah, I’d wait until you become a millionaire for that.
The only reason I make an exception for the Tesla Model 3 is because I see other cars as Nokia phones and the Tesla as an iPhone (I mean c’mon… It drives itself!!).
“What about a Ferrari or Lamborghini?” In my mind, those are Vertu phones (I don’t think anyone in their right mind would buy a Vertu over an iPhone).
There’s just something about a car that’s electric, fast, spacious, safe, and that drives itself. (By the way, Tesla fans out there, Elon had an awesome Ted interview that came out recently).
What if I want electric and cheap right now?
Get a Nissan Leaf. Follow the above rules and you’re good to go.
Fun fact: The Woz prefers his Chevy Bolt over his Tesla!
3. What’s the best way to buy a car?
First, it has to be on Craigslist.
Second, it has to be used.
Third, you have to meet all the requirements we talked about.
For everyone who complains about space, bonus points if you find a car with roof rails (then you can put a cargo on the roof).
Here’s what you don’t do: never, ever, EVER, borrow money for a car! Ever.
Another good rule of thumb; if you have to lease, you can’t afford it (this has been controversial in the past, but I still stand by it).
A friend of mine pointed out “what about buy appreciating assets, lease depreciating assets?”
The short answer is no. This Reddit post shows a lot of good comments I agree with. But my favorite is:
“The math gets weaker for a lease under 25–30k MSRP, but for 30k+ there are a significant number of reasons to lease if you’re in the market.”
Maybe leasing works for you if you’re a millionaire looking for a $30k+ car. However, until you can send me your Forbes profile page, stay away from leases :)
4. Ok, you have a car. What are some small ways you can save money?
- Get the GasBuddy app to find the cheapest gas.
- Never use a car for trips under 15 miles. The order is walk -> bike -> electric bike -> car.
- Wait until your car engine heats up. This means the car will consume less gas (My dad was a race car driver, so I always wondered why he’d wait 30s-1min after starting his car before driving. Now, I get it!).
- If you’re waiting for more than 10 seconds, turn your car off. No idling at the store’s parking lot while your significant other runs inside to buy Oreos.
And that’s it for today!
Today, we learned:
- Whether or not you should have a car.
- How to pick the right car for you.
- The best way to buy a car.
- And small ways to save money.
I hope this was helpful. Now if you’ll excuse me, I have some allergies to take care of.
See you next week (follow the series here to be notified).
Be well.
R
P.S.: I’m not even sure Facebook’s still hip, but I see some of you liking my page. Is this a hint? Should I work on it more?
P.P.S.: In case you haven’t noticed, I’m terrible at social media (but I welcome the help of any “social media savvy*” reader!)
*Thank you to kinda-social media savvy gal, Lilibeth Rivera, for pointing out my mistakes and making me a better writer 😄
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Since I write about finance, legal jargon is obligatory (because the guys in suits made me). Before following any of my advice, read this disclaimer.
