Guest Post: Keeping Low Standards When It Comes to Cars

Today we have a guest post from Nate over at Reaching the Crest.  He is a father, a husband, an Army Veteran, and a 6 time (working on number 7) Ironman/Long Course triathlon finisher.  Nate currently holds a number of professional certifications in Program and Project Management, and his blog is a great personal finance resource.  Enjoy the read!


low standards


One of the simplest ways to increase your savings and ultimately your net worth is by keeping low standards when it comes to what car you drive.  If you are driving high-end in your twenties, it will be really hard to dial it back when you are in your thirties or forties.


For most people, the total cost of car ownership from the time you are in your twenties until the day you retire will have a direct and significant impact on your savings. Even if you can afford a high-end luxury car, keeping low standards will benefit you greatly as you plan for your retirement.


Spending an excessive amount or even just slightly more than you really need on a depreciating asset like a car is not a great way to achieve financial excellence.  In fact, it can cause your financial life great strife.


By fighting the urge to buy higher-end more expensive cars you will speed up your progress towards establishing a secure financial footing – secure financial footing meaning no debt, lots of savings, retirement on track, and college savings for the kids is in place.


What I have experienced recently is that you may just get used to that lower standard.  By doing this you can redefine what you consider an upgrade.


If you do decide to upgrade in the future, at least consider spending a few years in the trenches driving around a modest vehicle.  Knowing that the longer that you delay driving that “dream car” the better off you will be.


Impacts To Your Greatest Financial Asset

For most people, your greatest financial asset is your paycheck.  A lot of people don’t view it that way.  But if you think about it, your earned income truly is your greatest asset.  It provides you with regular income.  However, as you add additional required monthly payments, you dilute the impact of your paycheck, minimizing the value of that asset.


If you make $5,000 a month and have $5,000 a month worth of payments you’re not really getting anywhere.  The car loan is one of the biggest offenders of this paycheck diluting.  It is also one of the easiest to avoid.  Having a large ongoing car payment robs you of your ability to feel the full impact of this asset.


As your paycheck becomes diluted with more and more items, it steals from your ability to establish many basic financial planning essentials – things like an emergency fund, and saving for a child’s college education. And most importantly, it robs you of the ability to save for your own retirement.


How Much Is That Car Loan?

As car prices have continued to rise over the years, Americans are borrowing more money to afford those new cars.  Experian credit bureau, which tracks millions of auto loans, reported in 2016 that the average car loan in the first quarter of 2016 was $30,032.  This was the first time the number had ever crossed the $30,000 threshold.  Another milestone came with this larger loan amount, which was an ever-increasing monthly car payment.


With an increased loan amount comes an increasing monthly payment.  This averaged at $503 per month during the same time period.  This is the first time it had ever topped the $500 mark. The interesting thing about that increased monthly payment is that it increased despite an ever-expanding loan duration.


The typical auto loan of the past has been three or four years in length.  Now it is well over five years with the average being 68 months.  68 months for a car loan!  And that was just the average.  There are seven-year car loans available, as well.


Having a $500 a month car loan for five years and sometimes up to seven years means you will most likely be paying on a vehicle with a loan amount that equals more than the value of the car.  This is where people can really get themselves into trouble.


If you decide to trade in that car after a few years, you might just be upside-down on the loan.  Meaning you owe more than the car is worth.  Oftentimes, a seller will then reassure you that the difference can simply be rolled into your new loan for your new car – ever increasing your car loan amount and monthly payment.  It becomes a vicious cycle that is hard to get out of.


Why Does This Happen? The Status Symbol

The car is a huge status symbol.  How often have you assumed that the person you see driving a nice car must be “doing well?”  Images of nice cars in music videos, television shows, and social media gives an impression of financial success.  Have you ever seen that advertisement on YouTube that opens up with the speaker standing in front of his fancy sports car?  Really?  That’s about as cheesy as it gets.


But there is a reason he is doing that.  People assume that if someone advertising one of those “proven systems” for financial success is standing in front of a nice car, they must be successful themselves.  Somehow the nice car means that the person knows what they are talking about.


It’s So Easy To Look Good

The reality is usually much different.  Obtaining a high-end car is extremely easy.  Easy financing, leases, and dealers all pushing you to get into an expensive car makes having one, well, easy.  So why is it then a status symbol?


If you change your perception when you see that nice car drive by, your financial life can change.  Or at least it will have a much better chance of changing.


I have trained myself to actually assume the opposite of success when I see someone driving an expensive car.  When others are saying, “Oh wow, they must be doing well,” I’m thinking, “Oh man, they must be broke.”  I know this isn’t always the case, but it is a lot of the time.


When I was stationed at Fort Knox, KY, there was an ongoing joke about driving past a trailer park where the cars sitting adjacent to the trailers were worth more than the actual trailers.  Nothing against someone living in a trailer.  There are plenty of good people in this situation and this is what they can afford.


But if you are driving a $50,000 car, to park it in front of a $30,000 trailer, you may have your financial priorities mixed up.  The lure of the status symbol is strong.


Embrace What Is Old

Me, I love BMWs.  There is just something about the way they look and the sound that they make.  I would love to get one someday.  In the meantime, I would really just love to have a car that had a CD player that worked and headlights that are less foggy. Those are some pretty low standards. When you drive something older, it changes your perspective on what you might appreciate in the future.  As soon as you upgrade, it’s really a lot harder to go the other way in terms of expectations.  My expectations are very low for performance and comfort when it comes to my car.


For example, my car’s CD player only works in the summer.  It’s like Memorial Day hits and I finally get to play that Dave Matthews CD I’ve been waiting for all winter long.  As the fall approaches I have to decide if I’m going to eject the CD or try and play it one last time.  I misjudged it this past summer, so the CD has been stuck inside the player all winter long.  Maybe I’ll eject it next time.


There is a strong possibility that whoever gets my car when I turn it in one day will also get a Dave Matthews CD.


Fighting The Urge

A few years ago I seemed to go through a “I need to buy a new car” phase every couple of months. I wasn’t really liking my car anymore.  However, I wasn’t really looking forward to buying a new one either. My current car has been paid for since 2010.  I could certainly afford something nicer but choose not to.


To me, buying a new car seems hard.  At the time, I didn’t want to spend the time going through the options and certainly didn’t want to spend the money.  Instead, I opting to spend about $2,000 on my own car for new brakes, a timing belt, an engine solenoid, and a few other things I don’t remember.


All of that was preventive maintenance.  There is nothing like walking into a mechanics shop and volunteering for services.  After spending that money on maintenance, I felt like I needed to keep my car a few more years to make up for the cost of that investment.


But what has happened since I invested that $2,000 has surprised me.  I actually enjoy my car more now than I did when it was newer.


What Is That Car Loan Costing You

Although $2,000 seems like a lot of money on car maintenance, that is a drop in the bucket compared to what Mr. Fancy Car with a $500 a month car payment is paying.  Five hundred dollars a month over the course of a year adds up to $6,000.  If you invested that money and earned even just 5%, you would have over $50,000 after seven years.


And just think of what this will continue to add up to if Mr. Fancy Car trades that car in for a new car after seven years and starts the loan cycle over again.  Fourteen years of paying $500 a month earning 5% is close to $125,000.


That is a significant amount of money to pass up because you enjoy the smooth ride and new car smell.


It’s Not Always Easy to Drive an Older Car

It hasn’t always been easy to like my car. There was that period of time when my door wouldn’t lock.  Somehow that just fixed itself.


My check engine light is constantly on because my fuel gauge sensor is broken.  Oh ya, and my fuel gauge pretty much registers empty all of the time.


It takes a certain level of confidence to drive a car with a check engine light on and a fuel gauge reading empty.


There were a few times two summers ago when the air conditioning wasn’t working.  This was really a test of my commitment.  But the same fairy that fixed the door locking issue fixed the air conditioning issue as well.  Surprisingly, the A/C worked flawlessly last summer.  Fingers crossed for this summer.


The Freedom of Driving an Old Car

Despite all of that, I just put four new tires on my car.  And my older car has practical value, too.  I could care less about the seats getting stained when I climb in all sweaty after working out or wet after a swim.


Once while driving home from work someone rubbed up against my car in his truck while we were both going about 45 mph leaving a nice scratch mark. (And rubbin is racin’!).  I was mad about it, but I could have cared less about my car.


We just got a basketball hoop for my daughter and my car serves as the back-stop, preventing the ball from going into the road.  I’m fairly certain that I would not let a basketball bounce off the front hood of my BMW – if I had one.  With my current car, that is not an issue.  I don’t care.


Those Around You

When I walk into work from the parking lot I typically walk past several really expensive cars.  I’ve had my older car for so long now that I simply can’t fathom why someone would drive such a nice car just to have it sit in a parking lot at work.  The thing about having an older car is it changes your perspective on things.


I’m not some poor college student with a beat up car.  I’m a guy with some means who is driving an older car by choice and I’ve embraced it.


Eventually my beloved car will die and I will be forced to buy something better.  My next new ‘dream’ car is one that has a CD player that works in the winter.  And maybe one that has more powerful the air conditioning.  Oh and my foggy headlights.  Yah, it would be so awesome if those were clearer.  How about a car with a USB port so I can plug my phone in? Those types of more modern low standards would be great.


Until then…


If you have made it to the end, I thank you for reading.  Thanks also to Mustard Seed Money for giving me the opportunity to guest post.  Reaching The Crest

Mustard Seed Money

Welcome to the website. A mustard seed is a very small seed but astonishingly grows very large over time. My hope is that through your financial journey that your small investment in time, money and faith will grow beyond anything that you could ever imagine.


  1. The car loan trends are what really scare me. I have no problem with new cars, and even high end cars, so long as the buyer understands the financial implications (although it’s always good to remind people of the implications, as you just did). But IMO, there’s no excuse for a 7 year car loan.
    Daniel Palmer recently posted…Weed Whacking Your Way to Financial IndependenceMy Profile

  2. Reaching The Crest, I really admire your philosophy and discipline to forego the status symbol. I too had a similar view on cars – it’s a vehicle that gets me from point A to point B. Even though I bought two new cars within the last ten years, it was out of need rather than want.

    I do like some of the bells and whistles on the newer cars, but I was much happier when I was driving my first car – 1988 corrolla. I too did not care if someone scratched my car back then, but when people put a bump on my new car, it really ticks me off.

    My first new car was a 2006 Mazda 3 and I still own it. I am pretty sure that I will be driving it to the ground. Same thing with my second new car – the family minivan.
    Leo T. Ly @ recently posted…The Benefits Of Investing With A PartnerMy Profile

  3. Great post, Nate. I’m with you. Overpaying for a car is pointless. So many do it though because it makes them feel good. They think it will make them happy, when it only adds to their stress. More expensive toys means more financial stress. Nah, I’m good.

    I’ll drive my 2013 Toyota Corolla until it dies. I kept my 2002 Pontiac Sunfire as long as I could. An 11 year run isn’t bad. Sure, my brother made fun of me for not buying a new car (the Sunfire was a high school graduation gift), but so what? I didn’t see him giving my any money for a new one! Haha.

    As I’ve gotten older and started a family, I’ve continued to grow further away from my family’s middle class, “I need to look successful” way of thinking. My mother still rolls her eyes at me when I remind her I paid off my $20K in student loans. “Debt was supposed to teach you how to handle money,” she says. Well, Mom, I think I learned that lesson. I hate debt.

    Thanks for sharing,


    • I’m glad you enjoyed it Dave. I would say that 11 years is a respectable run. And your last part about your mom made me laugh out loud. Those expensive toys that go down in value and 6 months later you aren’t that impressed with are ones to stay away from for sure. I passed by a co-worker today getting into a BMW 5 series. It was covered in Pollen. If that was my car i would be so annoyed. My current car, I could care less.
      ReachingTheCrest recently posted…Keeping Low Standards When It Comes to CarsMy Profile

  4. there are polishing kits you can buy that’ll defog your headlights, and after-market car radios. when your ride finally does die, resisting the urge for the nice car will be hard. just make sure you pay cash for whatever you get.

    • Steve, thanks man. I tried one of those polishing kits and it lasted for about 6 months. Its not as bad as before but still not exactly like the commercial. The after market radio is something i haven’t thought about. Its like i enjoy suffering. Tested out the CD player today and Nope, doesn’t work. Memorial day is still a few weeks away.
      ReachingTheCrest recently posted…Keeping Low Standards When It Comes to CarsMy Profile

  5. The car prices that people accept as normal are just wild. Earlier this year, a young coworker told me that it’s “almost impossible” to buy a car for less than $30k! And he was getting rid of a 5yo car that he though was going to start getting to the point where it would require a lot of work.

    We just spent $800, to keep our 14 year old Toyota Sienna with 175k miles running for the rest of the year. I will take that repair bill over a payment any day.
    Mike recently posted…Delicious and Easy MargaritasMy Profile

    • I think what your young coworker meant to say was there isn’t a car he is willing to drive for less than $30K. Even that’s hard to believe. If you do maintenance as “preventative” and not “emergency” it makes it a lot more manageable. You can schedule it on your own terms. I would say that a $800 a year car payment is pretty low.
      ReachingTheCrest recently posted…Keeping Low Standards When It Comes to CarsMy Profile

  6. I cared about status in my younger days but don’t care now. As proof, I drive a minivan =) I would have kept driving my Hyundai Sonata with close to 200,000 miles but I needed the extra room with a growing family. I have high standards when it comes to safety and reliability and low standards when it comes to appearances and status.
    Andrew@LivingRichCheaply recently posted…Guest Post on The Frugal FarmerMy Profile

    • The safety aspect is interesting. There are several new safety features that are required in new cars, mainly sensors, that older cars simply don’t have. I think trading in after 200,000 miles is respectable. I can’t tell you how many young soldiers in the army had brand new mustangs or F-150s. Trying to impress people at the club on the weekend.
      ReachingTheCrest recently posted…Keeping Low Standards When It Comes to CarsMy Profile

  7. Thanks for sharing Nate.
    I have a used 2014 VW Jetta. It’s a very nice car and is all I need. I got it for $13k and it only has 35k miles on it. I only drive about 4k miles a year..

    Living below your means should apply to all situations. I’m glad I’ve been able to keep my expenses low, but I have had some lifestyle inflation creep in lately…
    Erik @ The Mastermind Within recently posted…Dividend Growth or Dividend Yield? Growing Passive Income in the Stock MarketMy Profile

    • I often worry about the “slow and sneaky” lifestyle inflation parts of my life. I have so many of the big ones taken care of but the little ones are important too. That 2014 jetta should last you a long time if you take care of it and sounds like you got a good deal on it as well. thanks for the comment and reading my post.
      ReachingTheCrest recently posted…Keeping Low Standards When It Comes to CarsMy Profile

  8. Awesome post. My suburban is 12 years old. We bought it fully loaded, used for $8k. It’s a gorgeous truck, but old. Sometimes when I see friends driving around in new Suburbans I get a bit jealous. Until I remember that they have $800+ payments on those trucks and we don’t. 🙂
    Laurie @thefrugalfarmer recently posted…Financial Literacy Roundup: Week #4My Profile

    • Those older suburbans are hard to come by these days. I drove past a really old ford bronco the other day and it was really cool looking. Its easy to get jealous for a moment, but i find that those moments are fewer and fewer these days the older i get and more financially secure i become.
      ReachingTheCrest recently posted…Keeping Low Standards When It Comes to CarsMy Profile

  9. As far as scratching your BMW itch, why not get an old one? I had a 2001 330i that I bought used and it was a fantastic car, I kept it for 15 years. They sell for less than $5k even for very nice examples.

  10. First of all, thanks for your service RtC
    I remember when we came to the States people were saying that we HAVE to buy a new car, and of course when they said “buy” they meant “car loan”.

    “Or even better”, they said, “Lease a car, because 3 years from now new models will have more features than your current car and you don’t wan’t to dive 3 years old car”

    SAY WHAT?! But we were stupid on steroids and “bought” FINANCED a 2014 Dodge Journey, but thanks God we received a wake up call and paid the car off in a year.

    Will I buy a new car in a future? Maybe, but only and when this purchase will not be noticeable at all from my Net Worth point of view.

    Thanks again, good read and you’ve got a sub
    Friendly Russian recently posted…We Aren’t Normal FamilyMy Profile

    • Thanks for those kind words. Got to love all of that free financial advice people are willing to give you. Its almost like if someone can convince you to do something that they already did it validates their own bad decision. Having a financial wake up call is a great moment to have. I suspect my future upgrade to a more ‘high-end’ car will also be when my net worth doesn’t notice. thanks for the sub!
      ReachingTheCrest recently posted…Keeping Low Standards When It Comes to CarsMy Profile

  11. All good tactics, Reaching the Crest. Myself I had a car I treated poorly and drove into he ground over the 15 years I had it. Great car, but was breaking down regularly. What I needed was something reliable to get me to work and back. I despise having a car payment, but at 0.9 APR I love being able to focus on everything else with minimal effort tied up in my car.

    I’ll still drive this one to its death, which will hopefully be a very long time from now since its being taken care of and I cut my commute from 120 miles down to 20.
    Jack Catchem recently posted…Chapter 10: The Power of Rip It!My Profile

    • That’s some serious commute you had. glad you were able to cut it back. Life balance is so important to me and a long commute is a killer of that. Reliability is very important to me as well. I have gotten nervous from time to time about going on long road trips with my current car. Even with keeping up with maintenance. So there is a balance there somewhere.
      ReachingTheCrest recently posted…Keeping Low Standards When It Comes to CarsMy Profile

  12. Nate, good reading here. Fight the urge, it seems very difficult for people to do in today’s world. We keep our vehicles for as long as possible and I do all maintenance myself.
    I think a lot of people buy vehicles that they don’t need or are not particle for them, because they are “in style”, everyone is driving them, and they can’t resist the urge. So many people have pickup trucks that will never use them for the intended purpose, but yet they will shell out the cash for one.
    FIbythecommonguy recently posted…Taking Lunch to WorkMy Profile

  13. Nice post reaching. Hey about your foggy headlights I think u can brush them with toothpaste to clean em. Google it. It’s funny the gas tank my dad drives cars into the ground and when I was going to school the gas tank gauge didn’t work. One day I pulled up to a fullserve gas station and told the guy to filler up. After $2.36 it was full…. haha that was embarassing. I completely agree with you about the old cars. Scratches don’t even phase me. And my car seat is dirrty Ahhh well drives me around, works good, is reliable oh yeah and it’s paid for!
    Passivecanadianincome recently posted…What Is Your Mindset?My Profile

    • The first time my fuel gauge wasn’t working I had just gotten in my car in the morning and saw that it wasn’t working. I immediately assumed that i had someone had a leak and got out of my car and looked under the car. I then was worried someone had siphoned the gas out of my car in the middle of the night. Nope! Even tonight my daughter got chocolate sauce all over the interior door. Oh well, let’s just wipe that off. If that was a BMW I would be mad.
      ReachingTheCrest recently posted…Keeping Low Standards When It Comes to CarsMy Profile

  14. I recently traded down on my car from a car worth $20,000 to $3,000. As some others mentioned, it’s almost just as much fun to drive & I don’t care (as much) when it gets scratched. We used the extra money to pay off our home mortgage quicker and rebuild our emergency fund.

    What really gets me is that dealers are now offering 7-year loans for 0%. No wonder the average loan rate went above $30k for the first time.
    Josh @MoneyBuffalo recently posted…How to Start Investing For BeginnersMy Profile

  15. We are lucky bastards. We see cars as a tool to bring us from A to B. We want them to be safe and allow us to go on family holiday. Full stop.
    Amber tree recently posted…Taking riskMy Profile

  16. I’ve never been much of a car person and when I did own a car I basically wanted something that would be reliable. Our vehicles sit unused for over 90% of the time, so paying a ton of money for a depreciating asset hasn’t ever made much sense to me. I’ve now been car-free for almost 3 years and can’t imagine ever owning a car again. My husband is definitely a car guy, so there will also be a car in our household. Not only do I save money and time by not owning a car, I also have a lot of fun biking, walking, taking public transit and carpooling. The key to living a car-free or car-lite lifestyle is to focus on where we live, work, and shop to the extent that we can. Making it easy and fun to use our vehicles less can help reduce the urge to go fancy on something that doesn’t get used much!

    • Thanks for sharing Unconventional Sustainability!!! I definitely wish my car got used more just from the standpoint of how much I paid to get it 🙂 But like you it’s parked most of the time and I am definitely looking forward to driverless cars when I can use them on demand at a fraction of the cost of an uber/taxi driver 🙂

  17. If the check engine light is constantly on, how does your car pass its annual safety/smog inspection?

    Newer cars come with better safety features which I value more as I get older.

    Finally, older cars are a ticking time bomb in terms of deferred maintenance costs. I had a 23 year Nissan that by the end had a bad transmission and a crack on the CV joint. It would have cost thousands of dollars to fix so I kept driving it. I felt morally obligated to tell any prospective buyer of the maintenance needs. Once they hear that, I would have to pay them to take the car for it to be cost effective. Eventually, the car couldn’t pass smog; I needed a new catalytic converter. I donated the car to charity. All told, if I had sold the car a four or five years earlier, I would have made out better.

    I haven’t bought into the “car as a status symbol” belief but I do believe a car is a more than a commoditized mode of transport. In other words, if it gets you from point A to point B, car #1 is just as good as car #2 is just as good as car #3, etc. I don’t believe that. The risk of accident (allegedly on the rise due to people texting while driving) is enough for me to break open the piggy bank & pay for added safety features.

    Obviously, cost of ongoing maintenance should be a consideration. Are 2018 model cars less expensive to maintain that 2008 cars? I don’t know but I do know that some models are less expensive to maintain that other models so you should be willing to pay more for them upfront.

  18. Love it. I totally agree that keeping a low standard when it comes to cars is a definite relief because you simply do not care. I have only owned one new car in my life and I remember fretting every time I parked because, not to be too cynical but it’s true, people just don’t give a crap about other people’s possessions. Door dings, hitting the bumper trying to park, etc. etc. People just don’t care. I remember parking on rooftops at malls because they were always empty and reduced the likelihood of an errant car hitting mine. Bottom line, low standards, or not succumbing to lifestyle inflation in many respects, not just cars is an easier, frugal, less emotional way to live. Less is more!
    DivHut recently posted…Dividend Income Update April 2017My Profile

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