Let’s take two young men. Same age. Similar income. Similar education. When it came to buying a car, they both had about the same amount of money to spend.
The first guy bought a 12 year old muscle car. Over the years, it had been fixed up but it needed work to get it running. But, it was a cool looking car. In addition, for that model and year, there were plenty of add-ons to sweeten the ride.
The other guy spent about the same amount of money on an economy car that was about half the age of the hotrod.
As fate would have it, both of these cars had transmission problems at about the same time. (I’m not making this up.) The cost of fixing the cars was about $1,000 each. But that is the only similarity in the two cars.
Not only did Mr. Muscle Car have to pay for a transmission, but he had to buy so much more. The after-market remote door opener quit working. The axle was bent. The brakes were bad. The head gaskets needed replacing.
Even more, was the cost of gas. Our hot-rodder paid almost twice as much as the guy with the economy car. Since he liked showing off, he also went through tires at twice the rate. And of course, there were the three traffic tickets. Oh, I forgot to mention that sometimes it wouldn’t start and he missed work a couple times which almost cost him his job. (How do I know this? Because I almost fired him.)
So what does your car mean to you?
Don’t get me wrong. I like 4-wheel drive trucks and hot rods. But first, you have to be practical. Cars are one of the primary ways people lose control of their finances. The kid with the muscle car was always broke because he was always throwing money at the beast.
Having a hot rod project as your daily driver is like having a chunky girlfriend that cheats on you. She’s going to cost you a ton of money to feed and constantly let you down.
But it’s not just hotrods. Any car that costs more than you can afford is a major financial pitfall. Is having a car to impress all the people on the highway that you don’t know worth the expense?