This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Why I Plan On Driving My Car Into The Ground

Who am I to turn down a better car and worry my parents? I said goodbye to Old Trusty and drove my brother's car to LA.

Maybe it's sappy and weird, but this car reminds me of home. My apartment and pretty much everything in it (even Brian) came from LA. My car is one of the few things from home that I still have with me.

Car payments scare me

“You wouldn't want a car with heated seats and a comfortable interior?” my friend asked.

Of course I would. But as comfortable as heated seats are, they don't feel nearly as good as nothaving car payments.

If my car was on its last leg, or if it was severely uncomfortable and I had a two-hour commute, it might be a different story. But for me, upgrading simply for the sake of upgrading isn't worth the expense.

I've always found it odd that many people consider car payments to be a constant. For lots of people, paying off their car loan means trading in their car for a newer one with all new payments. I guess if you can work it into your budget, maybe you can afford it. But I've always been a fan of the Dave Ramsey school of thought:

“When it comes to money, normal is broke. You want to be weird, and weird people don't have car payments.”

My cost of ownership is low

Last year, my auto maintenance expenses totaled $523, but that included a new set of tires. Granted, I don't drive much (mostly on weekends and road trips). But I still think this expense is relatively low. In fact, Edmunds shows that the total estimated cost of my car's annual maintenance (not including the tires) is $150. For a Mercedes C-Class, it's $260.

Let's say I did buy a new car this year - even a new Corolla. At least until its eighth birthday, depreciation is the car's biggest cost. At year one, the cost of depreciation is obviously at its highest - 57 percent of the total owner cost, according to Consumer Reports. Considering my current driving habits, my car would incur higher-than-ever depreciation while it sits in a parking spot. Seems like a waste. At five years, depreciation is still my largest expense, but at least it's not depreciating as much (48 percent) while it mostly just sits there during the week.

This is a unique example, and perhaps it depends on perception, but the point is, the costs over time should be considered.

2 of 5

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,493.37 -69.93 -0.42%
S&P 500 1,925.15 -5.52 -0.29%
NASDAQ 4,352.6390 -17.1340 -0.39%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs