Wanna Save The Planet? – Buy A Used Mercedes!

The following is an article by David Porter over at boomerinthepew.com. Check out his blog – he’s got a lot of great stuff over there! If you love this post, and want more – you can subscribe to his blog here.

Keep reading…there really is a financial lesson here!

I have noticed that the herd affect is at work again. Not too long ago, it was this: buy a house you can’t afford, in a resort area, re-sell it in just a few months, and voile’, retire on a Caribbean island somewhere fabulously rich and maybe even famous!

Wrong!

That’s right sports fans! Do not pass go, and do NOT collect $200!

Today a similar, though much smaller event, is happening in the automobile market.

My neighbor, before it was quite so fashionable and “green”, bought a Toyota Prius Hybrid. He mentioned to me the other day, that his salesman called him up, and offered him more than sticker price, for his used, one year old Prius!

Are you getting my drift? Now the herd is driving up the price of “green” cars to ridiculous levels.

Look, are you willing to take advice from someone who has every right in the world to give financial advice? Why you say? Go read my “about the Boomer” section.

Ok! Here’s my advice:

America, it is absolutely ridiculous how much you spend each month to drive automobiles!

I have personally peeked inside the finances of over 7,000 family’s financial statements. It is not uncommon to find a family with two cars, and two car payments nearing $800/month!

Holy money down the drain,  Batman!

Please, for the sake of all that is sane….read on….

First of all, here are a few maxims to tuck under your hat:

A car is a depreciating asset. You buy it, and it immediately goes down in value. A LOT if you buy a new car.

Wealthy people buy assets. Poor people buy depreciating assets, thinking they are assets (cars, watches, snow mobiles, televisions, etc., etc.)

Let’s get serious. Of course you need a car. Perhaps two! But…what is the best way to do this? If you spent $800/month for 30 years, buying cars, do you realize how much money that is? Almost $300,000! Couldn’t that pay for your child’s college expenses instead?

I haven’t had a personal car payment in…well…let’s see….i’m not sure….18 years? Before you dismiss that statement by saying, “Well of course, your rich!”. No…my dear one…I too used to find it difficult to rub two nickels together in my pockets. Just listen for a minute.

That Mercedes, up there in the photograph, is a purchase I made about a year ago. Having just moved to Arizona, I decided that I would need an automobile to do the following things:

• Be reliable and safe
• Have a world class 4×4 system, so I can traipse the back roads of Arizona safely
• Last at least 10 years
• Be comfortable for long trips. We like to hike all over the Western states.
• Have a bit of storage space to accommodate back packs, hiking shoes, etc.

After doing my homework, I bought a used 2001 Mercedes E320 with 80,000 miles on it and paid cash. This vehicle meets all my requirements, but cost me about $45,000 less than new. And you know what? It will do absolutely everything that a brand new one will do. So..what’s the difference? Oh…how about pride…or maybe lack of common sense…fiscal irresponsibility?

Look..you know as well as I do. The pride of the new car wears off REAL fast once you start making those car payments.

If you are just getting started in life, here’s what to do:

• buy an inexpensive $2,000 car with the money you get from your wedding
• start saving the $400/month that you might otherwise spend on a car payment.
• In two years, you will have $10,000. Sell your $2,000 car for $500 and pay cash for a $10,000 used car. Don’t buy a new one. Too much depreciation. Besides, there are millions of folks throwing money away on two year leases. There are millions of beautiful, dependable used cars to buy.
• This $10,000 car should, if you take care of it, last you 10 years, easy.
• Keep saving the money each month and you will never have a car payment for as long as you live.
• Oh..buy the way, you will find that your savings each month will grow to a fabulous sum after 20 years or so, pay for your children’s college education with this cash.

Let’s say you already have a car and subsequent car payment. Then here’s what you do:

• When the lease ends, buy the car and keep driving it. If you got a loan on the car, then all the better, keep driving it. You don’t need a new car!
• Now, start paying yourself car payments each month and refer above.

Folks! There is no reason on earth why you need a new car every two years, or even 4 or 5 years for that matter. Today’s automobiles will go, if you take care of them, hundreds of thousands of miles.

Of course there are a few rare exceptions to this program, but they are few and they are rare. Right?

The question is, are you going to willingly give away your hard earned wealth, or are you going to be a good steward of all the God has blessed you with and put a little mental energy and discipline into your financial decisions?

Don’t let yourself get stuck in all the “yeah, but what ifs”. Just do it!

In the meantime, my $45,000 savings will grow in the bank, and maybe I can help fund a school in Tanzania or something!

Honk if you see me bopping around the back roads of the West!

P.S.  Here is another used car I own. I bought this about 5 years ago, used of course, and saved about $50,000 from new prices. It is now 10 years old, still beautiful, not a scratch, only 30,000 miles, and will likely last another 10 years, if I so choose.

You get the picture..right? Click the picture to see the Grand Canyon in the background. Beautiful creation of God!