Some car buying tips:
1. Don’t buy more cars than you need to (when the pandemic hit, for instance, my wife and I sold one of our vehicles and saved a ton of money)
2. On a related note, don’t buy cars to impress people (they’re never that impressed and they aren’t thinking about you nearly as much as you might imagine)
3. As a general rule, better to buy than lease (it never hurts to run the numbers, but usually the asset you end up with will be worth more than the extra monthly fee you pay, so you end up ahead by buying and have better options down the road)
4. Buy used (cars lose a bunch of value the second they drive off the lot. Doesn’t need to be super old. Could even just be last year’s model)
5. If you’re a business owner, it might make sense to lease (just depends on what you’re using it for and the details of your situation. Talk to someone like me and a good accountant)
6. The best way to buy a car isn’t with cash or with a loan from the car company. The best option is to use a Whole Life insurance policy to make the purchase (take out a loan against the cash value, pay for the car in full, make the monthly payments back to yourself, come out ahead. If you want to go over the numbers and see how this works, book a meeting with me).
In general, cars are money pits. They’re a big part of people’s budgets and they tend to lose value over time.
My main suggestion is to try to minimize how much of your income goes to your cars over the course of your life. You can do this by being practical about what you buy and strategic with how you go about the purchasing.
If you happen to love cars, or make a ton of money, you might take a very different approach. And that’s cool, too. It’s just not for most people.