Last week I attended a large car auction in Arizona with my parents who were visiting from South Dakota. The week-long event was expected to attract 300,000 visitors, auction 1,900 vehicles, and bring in gross sales of over his $200 million.
The most expensive car sold last week was $2,750,000.
Throughout the event, I was reminded of the Harvey McKay quote I hear most often. Quotes have had a huge impact on my life.
“If you can afford a fancy car, you can drive a regular car and make more of an impact.” — Harvey McKay
To be clear, I don’t know anyone who bought a car at an auction I attended. And I know nothing of their motives. This article is not about them, it’s about me. About you, if you like.
Harvey’s words are useful guides in all areas, as automobiles are one of the most important areas.
In our society, people are obsessed with cars. Not everyone, of course, but there are many. To some extent, this makes sense. We have built many cities and towns in such a way that owning a vehicle is commonly assumed.
But our fascination with cars goes far beyond our need for them. In our culture, they represent more than tools to get you from point A to point B.
Statistics on car use and costs seem to support the premise that the cars we drive are no longer meant to get us from one place to another.
According to the U.S. Department of Transportation, the average annual cost of owning a car in 2022 will be $10,729.
On average, owning and operating a car is the second largest expense for households in: 16% of annual income (Housing is No. 1 with 34%, Food is No. 3 with 12%).
The average auto loan for a new car is $41,000 and upAnd then the average used car loan comes in $28,500That’s a lot of money.
A financial advisor once told me: This may be an over-generalization, but most families who grasp these three factors tend to have effective budgets. ”
Beyond the simple economics of the matter, other factors come into play when choosing which vehicle we drive.
Owning a car has become much more than a need for transportation. For many, they are the ultimate idols.
Car ownership has become more about status and reputation. We are trying to prove our success in society with the car of our choice.
Automakers have deliberately encouraged this mindset. Over the decades, some car brands have established themselves as status symbols on the road. This is not necessarily due to the quality of the finish, but may simply be the result of clever branding.
In many cases, even influences within a particular profession can compel you to buy a particular car. I have a doctor friend who bought a Hyundai. Telling fellow doctors about his choice, he recalls their immediate reaction and visual disgust at his choice. Why settle for Hyundai? you are a doctor for good.
In addition to status and cultural expectations, there are internal factors that subtly determine the cars we drive.
You may be moved because of nostalgia. We are addicted to the adrenaline rush of speed and power. One car has captivated our love for as long as we can remember (“I always wanted to own a Mustang”).
Owning a particular vehicle may be aimed at healing wounds that have not yet closed (this is especially seen in father-son relationships). For others, their love of engines and mechanics influences the cars they pursue and buy.
A few years ago I spoke at a church in Phoenix, Arizona about my pursuit of life-giving minimalism.
Many people did. And typical questions were asked. what about my spouse? What about my sentimental items? etc.
Towards the end of the morning, after everyone had left, there was one young gentleman left. He approached me and presented his dilemma.
“Joshua, I agree with everything you say. Actually, I already live a pretty minimalist life. I want to own a nice car, is that wrong?
His question was complex and on many levels. First of all, I’m not in a position to judge whether a purchase is right or wrong. Most of these answers are generated from the motivation behind each purchase. I was not in a position to judge which motives were guiding him. You probably agree that it’s important.
Two thoughts ran through my head.
First of all, his desire for a nice car was clearly controlling him, rather than him controlling his thoughts. Inherent in his dilemma was the reality that at some point in his life he was forced to own a really nice car. I didn’t think I could. One of the above motives was controlling him.
Second, I was immediately reminded of the thought process inspired by Harvey’s words above.
Without giving a concrete answer to his question or giving any direction as to how much money to spend, his money and life could be spent on pursuits worth more than luxury cars. I just encouraged him to consider the fact that
In my own life, I try to balance my pursuit of minimalism with my need for transportation with these three questions.
1. Need another vehicle? If not why would I I want new vehicle? And is that reason enough to spend resources?
2. How much cash + trade-in did you save? One of the best financial advice I ever received was “Always, always buy a car with cash.” All my life I have never paid for a car despite my meager income. The freedom you can experience without having to make monthly payments is worth the sacrifice of never driving a new car. Trust me, you won’t regret it.
3. What are the additional costs associated with this purchase? Calculate insurance, gas, expected maintenance, and unique situations (parking, tolls). Compare several models and take these into account when deciding. Even if the initial cost of the vehicle is high, it may save you money in the long run.
we live in the 21st century. Unless you live in a location with good public transportation, you will almost certainly need to own a car. But that doesn’t mean you should have the car’s marketing team force you to buy.
Instead, you’re better off owning a vehicle that gives you the freedom, reliability, and resources to achieve the greatest gains in this world in the life you have to live.