Are you spending too much on vehicles

I am driving an 18 year old Toyota Tacoma. I bought this truck for $18,000 used from a neighbor.  At age 23 and being frugal by nature, this was a giant splurge. The neighbor had owned the truck for only 9 months but wanted a bigger truck to tow a boat.

So by all measures it was like new. The truck had 12,000 miles and now has nearly 140,000 miles.  So you can say I’ve got some use out of it.  I think it’s still got several years left if you ask me. Mrs smart Fi would adamantly disagree. She thinks our family needs a SUV that would fit our family of four better. I can not bring myself to part with this excellent running vehicle that has never broken down. I have complete confidence I could drive across country tomorrow. By Kelly Blue Book my vehicle is worth approximately $5,000. Quick math tells me it has cost me $13,000 of deprecitiation for 17 years and 128,000 miles of utility.


The typical American car owner

So lets contrast my vehicle ownership history to a friend of mine. He has owned 3 vehicles in the same time frame. A Chevy Cavalier, Volkswagon Passat and a Honda Accord. My friend is still driving the Honda Accord.

  1. Chevy Cavalier. Purchase price $13,000 sold for $3,000. Difference of $10,000.
  2. Volkswagen Passat. Purchase price $32,000 sold for $1,000. Difference of $31,000.
  3. Honda Accord. Purchase price $34,000 todays value $14,000. Difference of $20,000.

Man, that hurts my head to think of all the money Americans spend on vehicles. But $61,000 is the grand total that my friend has spent on the luxury of driving a new vehicle every 6 years.

The benefits to driving an older car. 

I actually prefer driving an older vehicle. There are a couple benefits to driving a clunker.   If I park too close to another car at the grocery store and get a ding it doesn’t bother me. If the kids spill a drink in my truck I throw down some paper towels an move on with my  The Smart Fi advice is to buy a two year old car. Pay cash and drive it for 10 or more years. This will save you 10’s of thousands of dollars. that American drivers tend to keep the longest

According to a recent study by these are the top 15 cars that American drivers tend to keep the longest.

  1. Toyota Highlander
  2. Toyota Sienna
  3. Toyota Tundra
  4. Toyota Prius
  5. Toyota RAV4
  6. Honda Odyssey
  7. Toyota Sequoia
  8. Honda Tacoma
  9. Toyota CR-V
  10. Toyota Avalon
  11. Acura MDX
  12. Toyota Camry
  13. Subaru Forester
  14. Nissan Frontier
  15. Volkswagen Golf


To save 10’s of thousands of dollars over your working career. Buy a used, 2 year old car for cash and drive it for 10 plus years. Presumably that car should be a Toyota or Honda. Take the savings and invest in a Roth IRA or pay down your mortgage. Either way you will be laughing all the way to the bank and well on your way to early retirement.

If you have driven your car for more than 10 years leave a comment. I would like to compare your make and model to the list of 15. Or maybe you think I’m crazy. I’d love to hear your feedback.


3 thoughts on “Are you spending too much on vehicles

  1. I wish I had bought a used car. I thought I wanted to move to a city and not own a car, so I leased a Hyundai Elantra in 2013 on the advice of my parents. I ended up buying it outright with cash at the end of the lease (I did move to a city but I still needed it to get to work). I didn’t pay interest on financing at least, but I still feel I got ripped off. I intend to run this one into the ground (it has about 40k miles on it now so hopefully it lasts a long time) and I will only buy used in the future. Buying used is a bit intimidating since I don’t know much about cars and wouldn’t be able to identify issues, but I can find a mechanic to help.

    1. The number one reason our family is able to save 40% of our income is no debt other than a mortgage. I can’t imagine having two car loans like some American families. As for buying used cars, here is a tip. Buy a used 2year old car that has under 36,000 miles. With this method the manufacture warranty will still be in place for a year or so. That way you have have peace of mind you won’t be saddled with a major car repair.

      1. We don’t have any car loans on our two cars, so we are good there. We’ve thought about selling one car since we could get by with one right now, but that situation might change in a year or so. It’s easier just to keep the cars we have since they are paid off and in good shape even though it is tempting to sell one.

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