The other day I was surprised when I was left without a car.
It was due for its yearly check-up and I felt lonely and completely lost.
The fact that I didnât know what to do with myself with no car in NYC for 6 hours was a problem in itself.
Pre-pandemic, cars were scarce in the city. There werenât many on the streets and most of the time traffic only occurred during peak hours of 6â10am and 5â9pm. The vehicles on the road mostly consisted of black Escalades dropping and picking up white collar workers to and from work, tourists roaming around city streets in yellow taxis or commercial vehicles with over-priced ingredients for New Yorkerâs overpriced Sweetgreen salads. Rarely any personal vehicles in sight.
Now, I know what youâre thinkingâŚ
I must be such a spoiled brat for needing a car in NYC. I have so many available transportation methods at my disposal that I have to be a really lazy bum to not take advantage of them.
Firstly, weâve had our vehicle now for 9 years. NYC changes all the time and prior to the expansion of outdoor dining, free side-street parking was abundant. Believe it or not, owning a personal vehicle wasnât as pricey or slow as you may think.
Thereâs always been 24/7 traffic in the city that never sleeps and ever since NYC became a booming tourist destination and safe in the early 2000s, walking has been the number one mode of transportation until the pandemic changed it all.
Although keeping your distance in a subway or sanitizing a taxi are decently safe, something about a personal safe haven space a car provides in a crowded noisy city is a true oasis. Iâm finding NYC is starting to resemble every other American city, specifically Atlanta or Los Angeles where all you see is cars! I hope walking doesnât become awkward or strange anymore as it is in LA. Not a single sole on the streets.
There has been an uptick in registered license plates for personal use in the past year as people feel more comfortable commuting in their own vehicle or thought it was the best time to splurge on a car due to pent up savings and excess discretionary income. Just like with the sporadic purchase of dogs, Pelotons and homes with unnecessary additions of pools and basements Americans made this pandemic, cars are certainly part of the list.
Everyone has a different reason to own a car.
Me and my fellow New Yorkers who own them use them for 3 main reasons:
-Weekend trips up east to rapidly escape from the rush hour traffic on Fridays
-Cars are a safe haven escape in case hormones get out of wack and you donât want your neighbors hearing how you deal with your problems inside your home
-Safer, cleaner and more comfortable
Thatâs pretty much it. Otherwise it is a waste and just a pure hassle as it is elsewhere.
The Engine That Couldnât
Cars are an investorsâ worst enemy. They are enticing because they are beautiful, comfy, mysterious, fast and addicting. One of the first major purchases we make as adults is either a car or home. Cars have a special allure. They let us escape from reality and feel grown up with the windows down and radio cranked up.
All of these factors convince us we need a better car than a Honda Civic that drives practically as good as any other vehicle and is half the price, pain but zero of the prestige people cannot live without.
Why would you want a car that has an ultra fast engine that can go to 70mph in under 30 seconds? If youâre stuck in traffic, youâre going nowhere and itâs unrealistic that you would need to go that speed on your daily trips unless you live in the middle of nowhere.
From my experience, the more expensive the car, the less reliable, comfortable, and cost effective it is. No matter what type of vehicle you choose, it is always a true pain to upkeep and inconvenience on your wallet and life.
As for most of us, our car breaks down more than anything else we own but just like having kids, we push through it.
No doubt cars can save us hours compared to commuting on public-transportation, make our lives easier and all the other things we believe they can do which isnât all that great. But in a practical sense they are pure money down the drain and possibly the worst purchase you can make in your lifetime.
Consumer debt is near a staggering $14.9 trillion as of May 2021 and this has been perpetuated by a lack of responsibility, laziness and convenience of borrowing.
If we knew how much we could reasonably afford, this number would be slashed in half yet mortgage lenders, to institutions, credit card companies and pesky car dealers insist that Lincoln Navigator will help them navigate their life.
Itâs bizarre to me that Americans seem to not mind going into debt for something that can be negotiated and purchased for 90% less yet at the same time complain they cannot put food on the table.
Priorities people!
This is caused by our obsession to impress people we donât know with money we donât have.
The Beast
Newer cars depreciate faster than used ones because they are fresh out of the manufacturer and no one will pay more for it in the future. On the other hand, since used cars are already used, their value add is more. On average, by the end of the first year, your carâs value decreases around 20â30% and it depreciates by 10% straight away the moment you drive it off the lot.
Since moving to the city a few decades ago, weâve always owned a car. You might think we are crazy for having to scour the streets for free side-street parking and risk having it scratched by 50mph passing bicyclists yet when it comes to getting out of the city, it couldnât be more reliable and that happens quit frequently when youâve lived here for so long.
The city isnât a place you can stay for long, especially in the dog days of summer or brutal winters.
You may be wondering, then why are you here if you want to leave?
We donât, we just want a break like everyone else everywhere.
We donât choose to live here, we are here for our jobs and certain reasons that cannot be found elsewhere. Solo-entrepreneurs and side hustlers donât seem to understand this concept of not being able to WFH anywhere. Not everyone can live in Barbados and work off their laptop nor really want to. People pay more for a specific experience and way of life and we should all respect their decisions.
Most employees donât even have a choice on where they can live. If we all could we would live in Florida and pay no federal income tax and work from home but as a downside, you will most likely earn less, not be around people, not go to that certain school or have the position you always wanted in NYC or elsewhere.
Everything is relative in finance and in life. What works for you doesnât always for me so if you have nothing nice to say, donât say it.
Our lives are not an apples to apples comparison.
But what is are car purchases.
More for Less
Immediately when you spend more than you should on a car, which should be no more than 30% of your gross income to be safe, you not only loose more on it since itâs harder to find a buyer which in a sense equates to less money earned as time = money, but you have higher insurance, higher chances of liability and the pain of having to give it away which will eventually happen.
As with homes, Americans keep their cars on average for 3â5 years instead of the recommended 10 to get some decent return.
And with a more expensive car, the cost doesnât stop there. Expect to pay and stress out more every time you take it for a spin.
For example, letâs say you own a Bentley and happen to get into a fender bender because you were careless and didnât keep your distance in gridlock traffic. The more precious the car, the higher out-of-pocket fees and insurance you will have to pay because to the police and to the other driver, it looks like you are able to afford higher insurance since you own a Bentley after all!
With 80%+ luxury car owners not able to afford their cars, a minor accident is where their financial lives can take a drastic turn. Plus with a porcelain vehicle you always have to think about parking further away from everyone else since a scratch costs 10x more and an extra two weeks to repair in the auto-body shop. Lastly you have to debate on opening or closing the windows every time a driver passes by since people are naturally angrier at you due to jealousy. You could be an incredible noble person that 100% deserved that car but once someone observes you look better off than them, they will immediately make assumptions.
Living below your means and not showing off is vital for your wellbeing and security, something more people really need to consider and adopt especially since most look better off than they really are. Read here how you can get more in life by showing less.
On top of cars, there are countless other purchases we make throughout our lifetime that are useless and completely pointless yet also very necessary.
The thing about life is that there are always shortcuts and alternatives to mostly everything. From a career to obtaining that degree, choosing what to eat for dinner to what car to buy, thereâs always a safer, more cost-effective option that most of us arenât willing to negotiate or search for.
Impractically Unnecessary
Thankfully these tangibles arenât as expensive as dishing $30k + on a car, yet do add up quick.
Here are a few of them that you can cringe at later:
-Cell phone paid apps
-Single-use kitchen/bath appliances
-Personal care products/creams a.k.a mostly toxins that donât work just gimmicks
-Lottery tickets
Fun Fact: People are more likely to give birth to conjoined twins, be attacked by a shark, get crushed under a vending machine, or become president than to win the lottery!
-GPS
-Excess kids clothes and stuff
-Speciality once a lifetime clothes for extra special eventsÂ
-Daily coffee
-Bottled or infused water
-Extended warranties
-Alcohol, yes it does do brain damage and there are no scientific proven benefitsÂ
-Eating out/takeout/prepared food
-Designer brands
And if you want to really save, cut out these some-what necessity items:
-Pre-portioned foods: they are more expensive, waste packages, bad for environment and squander nutrients
-Gym memership
-Physical newspaper
-Manicures/pedicures/spas
-Physical books or cookbooks
Of course, we have to live and enjoy the fruits of life which means we have to collect things overtime.
All of us have junk we donât need but insist we do. Take these lists as you will. If you know Equinox is your safe haven space and a necessity, donât give it up just because you can save $400 per month running in the park or watching free squat videos on YouTube.
Prioritize whatâs important for you and in order to do that, evaluate the real necessities that mean the most to you that you cannot live without for ultimate financial freedom and flexibility.
And no, you donât need that extra Julia Child cookbook when you have 7 you havenât read in decades.