Cost History
As a part of your building a better mindset for money, you must value your vehicle, if you need one. The cost of a vehicle has changed dramatically over my lifetime. Depending on your age, you may have experienced a portion of this, like the vehicle shortage in 2021.
However, my story has a longer timetable. I bought my first car in 1968 for $200 and drove it for two years. In 1970, I traded it in on a brand-new pickup truck for $2,100!
Times have changed. When I started pulling an RV in retirement, I bought a used F-250 Super Duty diesel pickup truck, four years old, for $30,000, and that was a good deal!
I know you have your own experiences with vehicles. The point is that the cost is high and going higher and can be a BIG part of your budget.
Aside from the purchase cost, the cost of maintenance has gone up, as well. The growing number of ads for extended warranties is a testament to the mounting fear of high-cost repairs.
Electronics in newer vehicles has added to the cost. But they do help warn you about maintenance schedules to keep the vehicle operating well.
And I know you are thinking “I will just go EV (Electric Vehicle)”. Just be sure to ask how much those batteries will cost to replace.
Other Costs to Budget
On your budget you will have several line items related to your vehicle:
Loan payment
Maintenance—oil changes, tires, etc.
Auto Insurance
Replacement savings—Trade every 3 to 5 years?
As you consider your next purchase, you could affect those line items by considering the following criteria:
Average miles per gallon
Vehicle maintenance history
Insurance rating for the type of vehicle—Sedan versus Sports Car
Insurance deductible—Higher deductible means a lower rate
Used versus New Vehicle—Up front cost is lower, with expected short-term repairs
Future Options
Obviously, electric vehicles are gaining popularity. Even law-enforcement vehicles are going electric as part of their fleet due to the acceleration speed over gas-powered vehicles.
I know technology is moving fast on the battery usage and longevity. However, there are a lot of unknowns, like where you can get maintenance and the cost of replacing batteries and tracing electrical problems.
The cost of any type of vehicle might force you to consider options for not having a vehicle. That would mean possibly changing where you live to access public transportation or living near where you work to be able to walk or ride a bike.
Whatever you view as your future need for transportation, you need to make sure you can afford to use it. Save for the upfront cost. Budget for the maintenance. And forecast what other kinds of long-distance travel modes will be available to you.
Take Care of the One You Have
Getting places is important. So, take care of the vehicle you have. Be regular about maintaining. Regular oil changes will extend the life of your engine. Other problems may be observed while being serviced. If you have doubts, look in your owners’ manual for scheduled maintenance requirements, especially if under warranty.
How long should you expect your vehicle to last? A lot of factors come into play. If you bought the vehicle used, you must live with how well the previous owner took care of it. Hence, we have CarFax to help with some of that mystery.
If you are willing to budget for regular maintenance, you are likely to get over 200,000 miles out of a vehicle. That is my opinion, of course. Some mechanics may not consider that possible on some models. If so, do not buy one of those models!
My point is that you should give value to taking care of your vehicle. When you want to go somewhere, it will be valuable to you!
Bare Minimum to “Love that car”
Your first vehicle or one you buy when you are going through hard times is usually going to be a “bare minimum” vehicle. Cheap to buy but often not cheap to run. Then, when it breaks down, you are hard pressed to fix it.
Then, as times get better and you can learn to save for hard times and your retirement lifestyle, you will progress to being able to get one of those “Love that car” vehicles!
I truly hope you can learn to build a better mindset for money and build that experience into your budget plan for future purchases.
Value Your Vehicle, If You Need One
Whatever you decide for your budget, transportation will always be an expense. If the expense relates to a vehicle, I hope you can improve your income and spending controls to fit a pleasing experience into your transportation costs. Consider what makes sense for your situation. Where you live and where you work will affect that consideration.
When buying a vehicle, go beyond the cost to qualify a buy. Gas mileage or cost to charge a battery are relevant to your budget. Will you have several passengers at times? Do you need to fit a baby seat? Is comfort a concern? Will you haul stuff? How much room do you need if you travel?
Whatever your current situation is, I hope you make every effort to build your net worth to a place where a vehicle is not a major item in your budget. Then, you can have that “Love that car” feeling. Until then, take care of what you have. It still gets you to where you need to go.
I want you to be able to go far and do many things. With good objectives, that vehicle may take you to a wealthy future!