I’ve been thinking about this topic for a while now. Because of various poor choices in my past, I’ve had to become relatively frugal. However, I enjoy automotive pursuits…and they’re among the most expensive of all hobbies. Think of it: as an investment, cars are a complete waste of money. Virtually all of them will end up as scrap at a recycling center. Currently (June 2018), scrap cars are priced at $0.09 per hundredweight (100 pounds/~50 Kilos) around here. The average car’s curb weight is approximately 3500 pounds now, so you’re looking at a base value of about $315. Considering the average price for a new car is hovering perilously close to $30,000…and I’d estimate the average lifespan of new cars at about 15 years (Nationwide claims it’s less than 12)…that’s a 99% loss in only 15 years. Crazy, eh? On top of that, you also get the privilege of paying for fuel, insurance and out of pocket repairs. I’d estimate those costs in the neighborhood of $0.25 per mile. Likely it’s also financed, so top that off with another 5% interest.
To put this in another perspective: if you’d invested the same $30K in an interest bearing savings account at a measly 1% APR (*cough* I use Ally.com *cough cough*), you’d end up with ~$35K over the same time frame. A 15-year fixed-rate investment at 3% is worth more like ~$47K (link) .
This is clearly insane, so I opted for another choice instead.
More to follow, but the inspiration is from Kaibeezy’s comment on this DT post about a Range Rover HSE, and it references THIS admirably common-sense link.