Quote:
Originally Posted by I-Hate-Hulse
I find cars are the single biggest wealth killer amongst my friend group. So many subscribe to the "you are what you drive" theory.
For example - single income family living on his professional 6 figure salary. They have 2 toddler kids and are looking to upsize to a 3 row SUV from a 5 yr old 2 row. They could muddle through with the current vehicle, but are looking at a $60K 3 row. Frankly a $40K new minivan (let alone a used) would address their needs but its not even being considered as they "just can't do it" from an image point of view.
Then there's the flippers. Lease a new car every 3-4 years, not realizing you are paying through the nose eating the depreciation on these high end German cars. But they do this to be able to afford the latest and greatest that supports their image.
To fund all of this of course, means living in the far burbs so that they can get their 2,500sq ft house (complete with the latest Jillian Harris approved designer kitchen with quartz countertops). Which means their yearly km's driven approaches 15-20k km a year meaning they need new cars more often.
It's a vicious cycle with cars and wealth.
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While growing up in Toronto n the 50s, I used my high school math to show that if I took the average salary of a family at the time, and assumed an annual profit of 10%, I would never be able to accumulate any wealth if I purchased a new car every 3 years.
I never drove a new car until I turned 65. When I finally did, I made the salesman drive around the block with me, as I realized I just lost $5,000.