Reliable Transportation Does Not Equal a Brand New Car

You want to use your credit card to collect on awesome reward points – I’m cool with that. (You better be paying it off each month!)

You want to cash in your Roth IRA to fund your business – I may even be cool with that, too.

You want to try to convince me that you need to buy a brand new car to have “reliable transportation” – I don’t think that’s necessarily a good idea. And if you were kid, I would put you in timeout.

A recent reader almost sent me over the edge because they wanted to buy a brand new car for their kid. Here is my video response:




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Comments | 5 Responses

  1. Moon says

    I encountered a similar situation just about a month ago, Jeff. And yes it pushed me over the edge too. Our assistant is 28, married and have a year old kid. She claimed that she needed a new SUV from this Japanese brand. She made less than $18,000 last year and the car cost about $19,500. We had spent the past year telling her she should consider a used, reliable vehicle instead.

    She and her husband are young married couple who don’t have a lot of money, living in a fancier-than-they-really-need apartment, an ‘unplanned’ toodler, in credit card and medical debts, and a car payment for her husband’s car already (granted their debts situation is not as bad as some, but they virtually have no savings and both of them have their own debt consolidation plans already). She provided the reason that she NEEDS a new SUV because

    1) her dad is taking back her current car,
    2) she has a kid (and apparently only SUV will work for a kid but a car doesn’t) ,
    3) she needs the warranty,
    4) she said a car doesn’t offer her enough room (mind you she is about 5’2 and 105lbs, but obviously she needs a lot more room,
    5) a 4 door vehicle to get the car seat in and out is a must (again, a 4 door car doesn’t work, has to be that particular SUV).
    6) used car is a piece of crap and it’s not a lot cheaper (she doesn’t realize that she can’t even afford a ‘piece of crap’). She ended up buying a 2013 model and took on $16,000 car loan.

    I am extremely disappointed in her. She has no retirement savings, my husband and I barely helped her out by setting up her kid’s 529 plan in November by giving her a bonus and she is barely putting in $100 a month. (but of course now she seems to find extra money to pay this new car loan and the insurance premium?) She turned around and bought the newest vehicle and took on more debts. I cannot believe what called ‘parents’ put her wants in front of her kid’s future and her retirement.

  2. says

    I’m right there with you! I drive a ’93 Cadillac Eldorado, which is quite dependable! The car is older than me, and the only thing i’ve had to do since i’ve owned it is a few brake jobs. Some of the older cars were so well made, they’re just as reliable as a virtually new car. I believe that if you buy a well built car, have a set of tools, and some know-how then anything can be pretty darn reliable!

  3. says

    I remember when I wanted to get my first car… brand new… and the hoops my dad made me jump through to not only prove how I could purchase it but afford all that came with that type of responsibility. I use the same exercise with all big… and sometimes small… purchases!

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