Quote:
Originally Posted by Matata
Sitting in traffic, looking at all the shiny new SUVs around me, comparing their average value to the average house hold incomes and debts, and I wonder how many people are driving the stupidest financial decision of their lives, because it must be a lot of them.
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On a cost per km basis I don’t know if it is that Stupid. It is certainly costly but I would say it’s in the ball park of a daily Starbucks.
If you drive a 10 year old car that you maintain yourself you can spend about 25 cents per km all in costs. If you don’t do your own maintenance you probably end up closer to 30. A new 30k vehicle you drive for 5 years you end up between 40 and 45 cents per km.
So at 20,000km per year a new car costs you about 15 cents extra per km so about $3000 per year. Even a 50k vehicle would only cost you about 6-7k extra per year. Now that’s expensive but a Starbucks in the morning runs you $1250 per year and eating out everyday for lunch costs you about 3k.
The other thing is that the reduced stress of having a reliable vehicle has some value. Driving a 10 year old car you will have the vehicle fail more frequently than a newer one. And psychologically it’s easier to make a monthly payment every month than it is to be hit with a $1500 repair on your vehicle worth 3k.
So I certainly don’t see the value in the 2 brand new vehicle household. I do understand the logic that gets people there