Yesterday I showed how an average new car, bought on payments, costs you between $100,000 and $200,000 over your life. You should always pay cash, rather than going into debt. But if you have the cash, should you buy brand new?
Buying brand-new cars is something wealthy people should do.
How wealthy? Let me put it this way: I bought a brand-new car for about $20,000. It was worth $4,000 with a full tank of gas 4 years later (and it was in immaculate condition). So that car was a machine that destroyed $16,000. When you’re wealthy enough to be able light a pile of $16,000 cash on fire and not flinch, buy a brand new car.
So what to do instead? Buy used cars with cash.
The two biggest mistakes people make here are (1) buying too much car and (2) keeping the car too long. They’re related.
Tomorrow, I’d like to present an alternate plan.
In the meanwhile, if you’d like to learn more ways to think differently about your money, you should join the Intentional Academy. It’s free. Sign with the form at the top of this page.