|Mercury Capri Convertible|
What does this have to do with owning a nice car? Well I didn't have a new car or expensive, I consider myself lucky for what I had, but nothing brand new or high end like a Mercedes Benz or BMW. During college summers I lived in the Chicago suburbs and had the pleasure of working at a golf course that costs from what I remember around 80k to join. So pretty much every car that rolled in there was a 50K car or more. Rarely did I see the typical American Ford Taurus unless it was in the caddie parking lot. I associated having money with having a nice car. Which I think was one of the reasons I purchased my Mercedes Benz. Now I bought it below Kelly Blue book value, but I felt like the richest man in the world. My car payment wasn't ridiculous, nothing that I couldn't afford(asterisk )
I shortly realized buying a car with a payment was not smart. I was paying about $300 month, not including insurance, gas, and maintenance which gets a little higher with a foreign car. After moving from Florida(need a car), to Chicago(don't need a car). I was able to sell my car after listing it on Craigslist, I took a hit out of pocket, I think I had to pay about $1200, possibly less. This might have been the greatest financial decision I have made in my life.
Now when I see someone in my neighborhood driving an Escalade or new BMW, I think they are morons. Why would you spend so much money on a car, is it to look good, feel good, these are items that are not going up in value? That's a lot of money. So let's say you make really good money and pull in 100K, a new Escalade costs about 60K, that still makes no sense to me, unless you are paying cash for this purchase I have to say this is a bad decision. That's 60% of your salary. I think knowone should have a car payment and the fair amount for your salary to car ratio should be right around 10%. So make 200K you can drive a 20K car, unless it's cash then i think that bumps to 20%, so make make 200K a year and you can drive a used Escalade all paid for.
My Money Mindset when I am in the suburbs or nicer area is to see that same BMW and think that they are doing very well for themselves. Owning a nice car seems to tell me that you have money. This could be keeping up with the Jones' which is also something that can bring you down in the debt spiral of course. But I think it's totally different, the guy driving the BMW is a guy doing well making good cash, the guy listening to Jay-Z driving the 60K Lexus is a moron to me.
Do you have a nice car with a payment or a lease? Do you own a 1993 Toyota Corolla with rust on the side? Do you ride your bike to work? Take the bus, train, carpool? How do you save money with your own transportation?