Anxiety and your money – Cars

If you are on my blog, chances are you have anxiety in some form, or you know someone who does. For those of us who have anxiety we still have to function in the world, and we are not exempt to modern issues. One of them is transportation. I realize that some readers might have access to other means of transportation. This post is meant to give specific advice to those of us with anxiety, who need to buy a car.

Keep this statement in mind: “A vehicle is probably the largest purchase you will make, that will lose the most amount of money”

Now you might by a house someday and lose a lot of money (I hope not) but vehicles day 1 begin to lose money. Consider this : “According to current depreciation rates, the value of a new vehicle can drop by more than 20 percent after the first 12 months of ownership. Then, for the next four years, you can expect your car to lose roughly 10 percent of its value annually. This means that a new car can be worth as little as 40 percent of its original purchase price after five years.”

Source: https://www.carfax.com/blog/car-depreciation

It’s generally accepted that when you purchase a new car you take a hit on the depreciation. Simply put you cannot turn around and sell the car for the same price you purchased it. Now why would anyone want to make an investment that loses 40% in 5 years? The answer is complex really, some people need the financing (which is a disaster in of itself) some people WANT a new car etc.

If you have anxiety the best way to avoid this kind of loss on investment is simply buy a used car. “But Karac, I will be buying someone else’s problems” well maybe, but look at it this way. If you buy a used car and it’s a lemon and you lose your investment, is that loss more than the depreciated value of buying new (and losing 40%?)

“ha-ha Karac, but if I buy new, I will have a vehicle at the end” well yes, but are you done paying? No? oh so you don’t own it at all, you’re still making payments on an investment that you’re losing money. So, you won’t get a return until after you have paid AND if there aren’t any repairs.

The point here is don’t be fooled into thinking you need a new car. You don’t, you need a good car and there are plenty of good used cars on the market. Always look for something that is 5-7 years old so a 2013-2015. Look for cars that are less than 20K miles per year (so 7 years at 20K would be 140K miles). If you see a car out there that’s a 2013 under 100K it’s a good investment. First, someone else took the 40% loss, second you can probably pay for it cash or borrow less for less amount of time.

I drive a 2007 Toyota Solara Convertible. Its awesome, thing runs well. New this car was $30,460. I paid $6,500 for it in 2018 so it was 11 years old when I got it. I did a brake job, and regular maintenance but no more then I would any other car. Remember the better financial decisions you make, the less anxiety you will have.

You’re doing great, one day at a time.