- In 2005 I bought a 2003 Maxima for $16k. In 2008 I traded the car after putting a good chunk of money into maintenance (and overpaying considerably) for about $6k.
That car ended up making it until the winter of 2015 with over 190k miles on it before being salvaged. So nearly 7 additional years. I took immaculate care of this vehicle and quite honestly surprised it lasted that long. When I owned it the A/T transmission was shifting hard from 1st to 2nd gear. I attached these images to show you the before and after. The dealer listed it at about $10k and I felt like I got ripped off…The car was sold just shy of 80k miles. Loss: $10k
In 2008 I bought an Altima for about $23k and traded it in 2014 for $9k. I put over $2k into fancier rims and an upgraded sound system. Complete with twin JL subwoofers in the trunk, replacement speakers in the panels, new wiring, sound deadening, two amplifiers. Plus financing on the note which I held for 5 years. So let’s just say… Loss $16k
- In 2014 I bought another Altima for $24,500. I financed it for a lot less and this is at 0%. Little worry about maintenance costs for a few years other than the normal preventative stuff. If I were to trade the car in today I’d get about $16k for it. So my loss would be $8k
Let’s run the numbers. Assuming I saved that money and put toward retirement at a 10% annual RoR. The original $10k after 8 years would be worth $21k and the $16k would be worth $19k. So that’s $40k I could have applied toward my student loans or invested in retirement. Take it a step further. $40k for another 20 years… $269,100. Even with rises in housing costs I think in 2036 that would still be a big chunk of a house payment. Take it a step further 30 years. $697,976.09. By holding onto a used car early on in life and not getting the trade-in bug you can pretty much lock in retirement savings. These cars are not super expensive, or so it seems on the surface. However unless you’re really aggressive on funding retirement, pay off the car once and keep it for a long time.
Otherwise you’ll be one of those people fixated on impressing neighbors with what’s in your driveway or at a stoplight vs being prepared for your economic future. It’s all priorities. The numbers really make me wonder WTF was I thinking… 🙂