The Mistake Of Buying An Expensive Car Comments125 Comments

ford-mustang

Over the years I’ve made my share of financial mistakes. There were minor splurges here and there, but I see my biggest financial mistake every time I leave my apartment. Sitting outside my rundown apartment is my Ford Mustang, the most expensive car in the parking lot.

While I do take pride in driving it and love getting the back-end to slide around corners, in the back of my mind I know I shouldn’t have spent so much on a car. What was I thinking?!

Deciding To Splurge On My Car

When I first bought my car about 6 years ago, my affiliate websites were going through their first peak. I was getting my biggest commission checks and I was on top of the world. After years of working at en entry level position, I was the definition of ‘new money’. I wanted to blow my money and show off my success.

So after wrecking my old Acura, I thought I deserved an upgrade. And why not get the car I’ve been wanting since it came out? I figured I was making enough money to have it paid off within 2 or 3 years.

My problem was that I was too set on a specific car and was paying for a rental until I bought something. The car salesman’s eyes must light up when they see someone pull up in a rental car. They know someone in that situation may be in a rush to make a purchase.

Because I had worked for several years marketing an online tire & wheel retailer, I felt a bit of pressure to get a car that would impress my coworkers. My old roommate had also just purchased a big new truck. So I ended up giving into peer pressure and tried keeping up with the Joneses.

Why Buying An Expensive Car Was A Mistake

Later that year I was hit with a big income tax bill after doing so well with my affiliate websites. Somehow I had not been anticipating this and had blown most of my money on things like nice restaurants and renting a decent apartment across from the beach. This was my first financial wake up call. I didn’t get the hint though.

I paid off that big tax bill, but lost motivation with my websites. Things started to decline as I spent less time doing work on them. By the time I renewed my efforts, it was too late to stop the slide. Before I knew it, it was time to get a job. Yes, just like my current situation.

Even if I had been able to pay off my car within a few years, it still would’ve been a horrible financial decision. As soon as I drove my Mustang off the lot, it lost a large percentage of its resale value. Obviously it’s not the most fuel efficient vehicle either and insurance is pricey. Since I’ve been unwilling to take the hit and sell it, I’m essentially tied to it.

Instead of wasting money on buying an expensive car, I would’ve been much better off settling for a used Honda or some other cheap car. If I had been smart enough to do that, I would have plenty of money in savings and would probably have committed to a mortgage by now. Basically this unnecessary purchase set me back at least a few years with my financial goals.

So what should I do now? I know some experts would say to sell my car even if I only get back half of what I originally paid. That would mean fully accepting my mistake, but it would lower my monthly vehicle expenses considerably.

Have any of you wasted money on a vehicle that you really couldn’t afford? Or have you been responsible and only bought lower priced cars with financing options such as online loans in Los Angeles? How do you avoid peer pressure when buying something like a car?

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By : Jeremy Biberdorf | 7 Mar 2012
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125 thoughts on “The Mistake Of Buying An Expensive Car

  1. Gerry

    Good article …When i was 27 i had just paid off my jeep wrangler i was itching for a used corvette since i knew i had the credit and could afford to buy a early 90’s model. The 93 corvette had 49000 miles and cost me around 16k. Well turns out the vette was high maintenance and i needed so many repairs i had to take out lines of credit to be able to keep it on the road. The computer died on it about two years later with no hope for replacement. Waited over 1yr for a backordered gm part that never came. sold it to a retired engineer and had wished i never sold my jeep. lesson learned.

    Reply
    1. Jeremy Biberdorf

      Thanks for sharing that story Gerry. It does go to show that it’s not just brand new cars that can be way too big a vehicle expense. Certain cars can be quite expensive to maintain, especially if it has enough mileage to need anything big done.

      Reply
  2. BimmerSupply

    Buying a “New” car is just a tremendous waste of money. As soon as you drive off the lot your throwing your money down the drain. I’m a big fan of buying certified used vehicles or at the very least a reliable late model car from any of the top brands, BMW, Toyota, Honda or Ford.

    Reply
  3. Joe

    Hi there! This is an old thread but a very interesting one.

    You know I recently bought a Honda Civic 2010 and is is such a nice car.
    Did I absolutely needed?
    No, of course not!
    Before this Civic I had a Chevy Cavalier 2000
    Was the Cavalier giving me any troubles?
    No, not at all! It was a nice car, working well as Im a careful owner.
    So Im so ashamed to acknowledge that this recent purchase was much more a “want” than a “need”
    The Cavalier was doing its job.
    I don’t use much the car
    However, I wanted something really reliable, something I could trust in.
    When going out driving on highways, I always felt insecure with the Cavalier. I didn’t trust it in spite it never failed me. However, I never demanded much of it. I barely drive on highways, maybe once a year or a bit more.
    But for some reason, I started to feel insecure, kind of lost the trust on my Cav.
    Why? I don’t now!
    And the feeling was growing stronger.
    Also, I wanted something nice, something more good looking though I still like the Cav.
    I don’t know, probably Im crazy

    Reply
  4. JS

    I find it impossible to be entirely frugal with my car. I am a motorhead. A pretty serious one, at that. I can’t drive a so-called “normal” car. I spend a lot of time in my car, too, commuting and visiting clients. But I am also the sole breadwinner in a young family of four, so I have had to come up with a livable compromise.

    Interestingly, my car of choice is a Mustang GT. Why? Well, for starters, as far as performance cars go, it’s still fairly modest and a true enthusiast’s bargain. For around the average price of a new car, my 2013 5.0 will not only keep up with the Joneses, but will handily and securely plant them in my rear view mirror. Permanently. Also, my prior Mustang (a 2000 GT) was closing in on 180,000 miles when I traded it in, and had been very reliable and cheap to maintain over my 12 years of ownership. I am hoping for a similar experience with the new one. And thirdly, by buying a car I really want, I am not tempted to trade it in within a few years, which is where you take that huge depreciation hit. Drive it a decade or more, and resale value becomes less of a concern. And it’s a Mustang, so even a somewhat tired 180,000 mile ride that needs paint and some mechanical work is worth something to someone. I know from experience.

    The used car scenario is less of a slam-dunk when shopping for sporty cars. By buying new this time, I didn’t have the unknown of wondering if my high-performance stick-shift car was previously owned by a ham-fisted maniac. It helped that Ford was handing out fistfuls of cash incentives this past summer.

    So I say enjoy that Mustang and if you truly love it, give it a few more years and it may not be such a bad deal after all. It should run for a good, long time and if something breaks, it should be relatively cheap to fix.

    Reply

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