I am driving a beater car at the moment. The brand and model of
the vehicle is Mitsubishi
Pajero 2009, and it was
first purchased by my dad for my brother to use in the year 2009 when
my brother returned from the United States. When I came back from my education
in the United States in the year 2013, my brother gave me the car and decided to purchase
a new car himself. The car which he gave me to use is currently ten years old and
is considered to be a beater car. The mileage on my car is approximately 85,120 mileages (137,000 kilometers), which shows that the vehicle has been driven a
lot. However, I'm still driving it to this day and planning to stick with it
for another 5 to 10 years. I have seen many of my friends have newer and
nicer cars than mine, but I'm still content with
the car my brother gave me. Despite the vehicle for being old, I feel this beater car is
the right car for me to use while walking the journey to my financial goal. It is interesting to note that the reasons for and benefits of
driving a beater car.
1. You'll Have More Fun Driving It (Freedom).
I know a beater car can be an embarrassing experience to own
since people might think you are poor and can't afford a decently nice car. But
despite its old age, a beater car is fun to drive. You don't have to worry
about the car as much as if you purchase a brand new car. Anyone who has spent
much money buying a beautiful brand new car tends to worry if the vehicle is
damaged or gets into an accident. Since I'm driving a car that is considered a
beater car, I don't have these worries of driving it. I don't have to care
about the potholes or clipping curbs that are on the road.
Moreover, I don't have to worry about people resenting me from
having a nice car since my car is not expensive and old. They won't get jealous
because my car is better than theirs. Furthermore, I'm able to park my car
anywhere in the parking lot since the car is old. If I'm driving an expensive
new car, I have to park the car far away from other vehicles so that there are
fewer cars around that can potentially damage my vehicle. I have to worry about
the nice expensive vehicle from getting damage.
Furthermore, if my car were a brand new exotic one, it would be
painful for me to get a little scratch or totaled. I don't even care when my
current car was scratched since I already know the car is old and doesn't have
much value to it. But of course, I will still take care of my beater car, even
its old and outdated. I love that car since it provides the function that I needed,
such as commuting to work or purchase something from the local mall.
2. Let You Save for Something More Desirable.
Owning a beater car can give you the advantage of saving for
something more desirable in the future. When you purchase your first car that
is a beater, you can use the spare money to be invested in income-generating
assets such as dividend
growth stocks. I sometimes
feel embarrassed to drive my car since I'm not able to impress girls with my
old car. However, sticking with my beater car, let me able to invest
my money and have it compounded so
that I will be able to purchase my dream car in the future. Remember that as
time pass by, there will always be newer and more beautiful model cars out
there.
Your dream car might change since there will always be something
better in the future. For instance, my dream car when
I was studying in America was a Porsche 911. The vehicle was costly at that time, and I was
about to spend $100,000 to purchase one that's a few years old.
Luckily, I didn't spend the money and had the money invested instead. I'm glad
that my delay gratification pays off because not only that Porsche 911 car
model is outdated now, but there is so many newer and nicer car that is coming
out in the market.
To illustrate this, I recently found out a beautiful sports car
that is coming in the year 2020, and the car brand model is called the Corvette C8.
I have placed a picture below of how the car looks. The car looks so beautiful
that it has mid-engine technology, just like many other supercars such as Lamborghinis or Ferraris.
The interior looks advance and give an image of luxury. It has a powerful V8
engine that enables the car to go zero to sixty miles per hour in 3 seconds. But that's not the reason why I like this car so
much. It's because the starting price range for this car is less than $60,000 MSRP for a brand new one. For the value of the car
provides, it is actually worth it to purchase one. Many new sports cars that
don't even have the same performance a Corvette C8 gives. However, I'm not
purchasing the car in the year 2020 when it is just going to be released.
Instead, I am going to wait till 2025 when the car's original cost has depreciated
before purchasing it. By the time I'm going to purchase the car, it probably
has a market value of $30,000. That price range is for sure affordable and ready
for me to purchase one. I think the Corvette C8 will be a nice car to ride when
I'm going for my vacation in the United States. And of course, I will let my
best friend drive it. You know who you are if you are reading this article!
3. Your Beater Car Won't Depreciate any Further.
Since your beater car is already old in age, the market value
for the car won't depreciate any further. Everyone knows that a new car
depreciates its value just second you drive it out the dealership. The great
thing about buying a rubbish car for dirt cheap is that it'll probably never be
worth much less than you purchase it. Buying a car that's ten years or older
has gone through the worst of the depreciation curve, which can save you from
facing the depreciation cost.
This is a huge advantage since you can sell the beater car years
later when you want to purchase another car without losing a lot of money. To
show you what I mean, let me share a story of a beater car that was profited by
my best friend when sold. When my mom, brother, and I moved to the United
States in the year 2002, my mom purchased a brand new Honda Civic EX for $18,000.
It was a car that was given to my brother to use later when he was able to
drive. After my brother moved back to Indonesia to help in my dad's company,
the car was eventually given to me. I drove the car from the year 2008 all
the way to the end of the year 2012 before selling the car to my best friend for $2,000. My
friend was lucky to be able to purchase that beater car from me since he ended
using it for a few years before upgrading to his dream car. What's funny was
when he sold the car; it was three years
later in the year
of 2015. He was able to sell the car for $2,500 even
after he has used the car for a few years.
This story shows that a beater car can not only save you money
from depreciation cost of
owning the car but to profit from one by purchasing one that is under the
market value. I'm glad that my best friend was able to drive that Honda Civic EX 2002 and still make additional money when he sells
it. The car has a lot of good memories, even when the vehicle is considered to
be a beater car now. It reminds me of the good times I had when I was still
living in the United States.
4. No Car Payment & Cheap to Buy a Beater.
Purchasing a beater car usually cost very little, you won't have
to worry about getting a loan to purchase one. You can easily save up enough
money to buy a beater car in a couple of months. Just like my friend who
purchased the beater car I was driving when I was still in the United States,
he was able to quickly pay cash for it since it only cost $2000.
Without having to take a loan to purchase a new car, you won't have a monthly
car payment that can be used to be invested in your financial freedom.
I know I'm driving a vehicle that is considered a beater car
now, but I don't have to worry about monthly car payments. Instead, I can use
the money saved to be invested in my dividend growth portfolio. With the power
of compound interest, I am
able to get a more beautiful and better car in the future, just like the Corvette C8 that
I mentioned earlier. I feel that I can always enjoy having a nice car when I'm
financially secure and stable. And when the time comes, I can enjoy the ride
without any financial worries since I would have enough passive income coming
in using the dividend
growth investing strategy.
5. Lower Car Taxes and Lower Expenses.
Driving a car that is old like the beater car has lower car
taxes and other expenses such as insurance. If you live in a country that
requires you to pay tax on your car, a good beater car can have a lower tax
since the car value is already low from the start. You can reduce your tax bill
and insurance expense with a low valued car such as a beater car compared to a
newer car that probably worth more. Since I'm driving a beater car at the
current moment, my annual tax on the car is low. The annual tax expense is
lesser than the amount that my brother had to pay for his newer car.
I'm happy that I can save more money for not having to pay high
annual tax and other expenses on the car I own. Beware if you are trying to get
out of debt, purchasing a new car on loan require you to have you pay taxes and
other expenses on it. Not only you have to worry about paying the monthly
expense on the new car, but
you'll have to worry about maintenance. With many of these expenses, it can
slow down your process of getting out of debt or even worse to be trap
in the debt cycle. It's
better to drive a beater car if you want to get out of debt and meet your
financial goal in life since it can save you much money from owning and driving
one before you are financially ready.
6. Cheaper Parts.
Older model cars usually have parts that are easily accessible
and affordable as long it's not too old. I'm talking about cars that are in
their 90s and early 2000s, as this article is written in the year 2019. These
car parts are still easy to find, and in fact, more abundant compared to the
newer cars in junkyards. You can easily find these parts for a really low price
in the junkyards, and you're much more likely to find the parts if your car
model is older compared to newer cars.
This is true facts because I encounter this problem before.
Since my current vehicle is old, it's effortless for me to find parts for it if
the car goes through some problems. My brother, who bought a car that is newer
than mine, had trouble finding the parts for his car when he got into an accident
recently. He needed to have the part imported from another country to get his
car fix. It was troublesome and costly. My brother had to borrow my dad's car
for over a month because of this reason. So always take into account parts for
the vehicle before purchasing one. Make sure it's affordable and accessible for
you to purchase.
7. You Can Let a Newbie Drive It.
I think this is a good reason why a beater car is a good starter
car. If you or your loved ones recently just got their driving license and
started driving, a beater car is a way to go. Since a beater car has very
little cost value, you don't have to worry about damaging it. If you have
children that just got their driving license, don't let them drive the expensive new car! Your kids probably don't have enough
experience to drive yet even if they pass their driving licenses test. It's
better to gain more experience driving and getting the feel of driving.
When I started driving, my parents didn't buy me a brand new
car. Instead, they let me drive the car that is passed down to my brother. Even
when if you drive carefully, there is a high chance of you getting into an
accident if you are still a newbie. As proof, I got into some minor accidents
that scratch the car, but since the car is old, it didn't bother me as much.
After all, the car is already cheap.
So if you have a beater car and your children just got their
driving license, let them drive the beater car first. That way, you won't have
to yell at them for damaging the vehicle. Trust me, anyone who just got their
driving license and little experience driving tends to get into an accident.
It's better to start with a car that doesn't cost much, just like a beater car.
Even after ten years of driving experience, I sometimes still get into minor
accidents. But since I'm driving an old car, I don't mind if my car gets some
minor scratches.
8. You Aren't What You Drive.
I think this is a good reason why it's fine to drive a beater
car. There are studies that I encounter while reading the book "The
Millionaire Next Door" by
Stanley and Danko. They mention that only 23.5% of
millionaires own a car from the current model year. In fact, the majority of
millionaires that consist of 55% of them own a car older than two years old. Also, they noted that most doctors aren't even
millionaires, and a large percentage of doctors in their 30s have a negative
net worth. What I mean by negative net worth is they inquire more debt than the
available assets they have. This shows that if the majority of millionaires
don't drive brand new cars; why should you worry about not being able to drive
a new car. Being frugal is a significant reason why members of the used
vehicle-prone group are wealthy. They invest a large portion of their annual
incomes into assets that generate income and appreciate in value.
The media portrays people with brand new luxury cars as wealthy
when, in reality, this is not the case. Many people were influenced by what the
media portrays; believing that owning a brand new vehicle is the status of
success. As a result, people try their hardest to impress others by purchasing
new cars they can't even afford by taking out loans. If you don't believe what
I say, consider this. Imagine a Doctor A buys a $30,000 car. He then drives it for
three years, then resells it for $15,000 and repeats the process. He will also pay more in sales tax, registrations
fees, insurance, possibly maintenances, and finance charges that come along
with it. The cost of owning a car is approximately $7000 per year for
Doctor A. Let's now compare Doctor A to Doctor B,
who buys a used car for $3000. He drives it for ten years before the car
eventually died out. Then he buys another one which he pays cash for it, didn't
fix any of the little things, and paid a minimal amount for registrations fees
and insurance. Doctor B estimated that the cost of car ownership is $800 per year.
After 30 years, what is the difference between Doctor A, who
spends roughly $7000 per year with Doctor B,
who spends approximately $800 per year? Invest the difference, and have it invested in a
low-cost index fund such as S&P500 Index that pays a conservative annual growth of 8%, you will get $702,356. Yes,
you read it correctly! Is driving a new car worth more than $700,000 to you
that can be used towards your retirement? Most Americans out there don't even
have this amount to retire with. So remember, you are not what drive. Having a
brand new nice car can symbolize success, but in reality, a person driving a
used beater car can have far more net worth than a person who always purchases
a brand new car every three years.
The Bottom Line.
So remember, don't be ashamed or embarrassed if you are
currently driving a beater car that is ten years or older. There is no need to
worry about what others think of you just because of the vehicle you are
driving. You don't need to impress people that probably don't even like you.
There are many benefits of owning a beater car. Not only they are cheap and
affordable, but you also won't worry as much as compared to driving a brand new
expensive car.
Moreover, they can aid you in your financial journey to early
retirement. With the low annual tax and insurance cost on it and easily
accessible car parts, you can save a lot of money driving a beater car. Just
make sure the car is not more than twenty years old. Also, there will always be
better and nicer cars available in the future, and you probably change the mind
of your dream car when that newer car is possible to be purchased. So it's best
to have the money invested until you are financially ready to afford one
without having to worry about money.
I like beautiful cars, but I think the beater car I'm driving
right now will lead me to able to afford a car that suits my taste in the
future. This reason why I think I'm going to keep driving the beater car I own
right now and will continue doing so until the future (Maybe 2025). I will use
my beater car as my daily car that I use to drive to work. I don't think I need
to drive a nice car to my workplace since the car I'm currently driving right
now provides me the functionality that I need. My dream is to own a sports car
that I can drive specifically on the weekend when I really want to enjoy the
luxury it provides.
Furthermore, a beater car is always a good starter car for
newbies to experience driving. You won't get hurt as much if you that the
beater car got into an accident since the market value of the car is already
low to start with. As long the beater car provides the safety required, you can
always let your children learn to drive and gain experience driving before
making them drive the expensive one.
Finally, yet importantly, always remember that "You aren't what you drive." Having a beautiful brand new car can portray
success and wealth, but in reality, that's not the truth. The majority of the
millionaires out there drive vehicles that are a couple of years old. So don't
get caught up trying to catch up with the Joneses. To illustrate this, let me
show you the car the billionaire founder of Facebook, Mark Zuckerberg, is
driving. He is driving a regular brand Acura TSX, which has a car value of
around $30,000. He mentions how he likes the car that provides him safety,
comfy, and, most importantly, not ostentatious. A billionaire like Mark
Zuckerberg can afford any supercar that's available in the world, but he chose
not to. If I were a billionaire like him, I would be tempted to purchase one of
those luxury sports cars like the Lamborghinis, McLarens, and the Ferraris.
Speaking of which, be comfortable with the car you are driving even if it's a
beater car. Don't let the media influence you to purchase something that might
be unnecessary and affect your financial goal. The most important thing is that
you are financially secure and have you not to worry about money again. I think
that is more important than trying to impress others with what car you are
driving.
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