Monday, May 18, 2009

Yes, You Can Drive A Clunker

I frequent a *retail establishment* every week. Let's just say, the part-time, weekend cashier there drives a shiny Toyota Highlander.

Now I know little about cars but that has to cost $400 a month, does it not?

And it begs the question of why someone would work for what must be around $10 per hour - ON THEIR WEEKENDS - so they could drive a nice car to and from a job that simply pays for the Toyota!

[And this ain't a *dumb kid*, let's just say that it's middle-aged government employee in the charge of *dumb kids*!]

Yes, people are self-spoiling Morons who all think they should drive nice cars. They think Toyota SUVs are really for the lumpen masses.

But I also believe that groupthink's at work here. Few even realize that they can in fact drive a clunker. If no one in your social circle has a crappy car, normalcy is simply redefined upward on the expense chart. For crying out loud, about a month ago I had to listen to a disgruntled, quitting busboy at a local bar jawbone about which new car he was going to lease!

Five years we bought our *nice* car. A 2000 Ford Explorer with 50k of mileage for $11,000.

Even if you falsely presumed it worth $0 today, our average monthly cost for the vehicle works out to $178....and dropping.

According to this article written in 2005:

The average car payment is $378 over 63 months.

So figure I've saved a hardly insignificant $10,000 over the average Joe just with my one clunker. [And I have another clunkier clunker!]

Now, the fact that I may have squandered that moolah on leveraged short ETFs is quite another story!

Getting you from Point A to Point B....that's all a car really does.


Anonymous said...

I am in softball league with my work and after the game we saw a player on the oppossing team pulling out of parking lot driving a late model Mercedes sedan. We all looked at each and thought the same thing. This guy maybe makes $50k a yr tops and is driving this car. He probably rents an apartment and has two roommates but man he looks cool in that car. What a jacka$$!

Anonymous said...

Bentley's? Pretty swank neighborhood?

That said, I know a whole bunch of people who get new cars all the time-just roll the payments over and over. Their car payments are probably close to half, or more, than their mortgage payment. Ridiculous. I don't know where the money comes from (maybe its the guaranteed gov't employment?). I just cringe at the thought of their personal balance sheets. Then again, I own a pretty pricey p/u for the company. Tax reasons!

My neighbor however drives a 10 year old nissan with 180K. Smart money kind of guy.

Rule of thumb for me: House should cost no more than 2X your annual income. Car-half-at the most, of your annual income. I acknowledge that that is too much and I could certainly spend less, but its a good rule to live by and keeps ones eyes smaller than their wallet. Neither vehicle of ours comes close to half our annual income for the record.

Slow out.

Anonymous said...


My '99 accord has 140k and wife's '01 accord has 220k on it. I am driving them right into the ground.

First rule of thumb in the Millionaire Next Door philosphy. Vehicles are a terrible investment.


Anonymous said...

Do any of you guys have experience with how reliability deteriorates in the later stages of a vehicle's life?
I have tended to replace mine somewhere around 10 years/150K miles and have seldom been stranded.

Any roadside stories that might make you regret keeping a vehicle into higher mileage/age?

CaptiousNut said...

Never heard any such stories.

A lot of stuff goes after ten years but replacing it is always cheaper than buying what those Jones' are driving.

Funny Circus Bears said...

I drove POS until I could easily afford any car made, now I drive quality rolling stock and HIGHLY recommend it.

Anonymous said...

I know stuff breaks. I'm just curious about how much reliability deteriorates in your experience. Sounds like I'll have to try 12 years/180K miles and see for myself. But that's a sample of one ...

Funny Circus Bears said...

I drove early an 90's Accord well over 200,000 miles with no problems, a '95 Nissan Maxima over 300,000 miles without any major problems, a '03 Toyota Sequoia I purchased for a BIL is still being driven over 200,000 miles later with no issues.

Drivem' 'till they get hinky, then dump 'em quick and clean at a used car lot for wholesale book.

Anonymous said...

Vehicles are worse than a terrible investment: they are a depreciating asset! Fucking status artifacts, for the most part. Of course, I drive a '96 Accord with 200k, three animal impact events, one trucking debris cosmetic surgery, one convenience item failure (power door locks), and ongoing vehicular trim erosion (just this week, the upper windshield gasket detached itself). Still, as long as the vehicle starts in the morning and continues to garner pity from law enforcement officers, it is not easy to let go...think of the margin loss that a vehicle purchase entails!

CaptiousNut said...

Living in cities for a good portion of my adult life, I've never really owned many cars.

So my first test is now - seeing of far we can drive our 97 Suburban which has almost 150k miles on it. Maintenance is definitely an issue but hasn't been too bad yet. And yeah, I have to roll down the window and open the driver's side door from the outside; the LCD display of the radio is dead; I spent $500 on the front end (and they tell me it needs another $500 of work); the engine light is often on; the car burns oil....yet it' darn comfy!

Wow! A whole lot of clunker drivers here!