Transportation
What would you drive if you could drive anything? A little sports car? A motorcycle? An SUV? An old Volvo? A speedy Porsche? Think about it… You can probably be driving the car of your dreams today. I recommend buying a late model used car …. You won’t experience the rapid depreciation that happened when you drive a new car off of the showroom floor. My personal favorite is a BWM since they tend to hold their value and are generally quite reliable. Just think you can pick up a 4-5 year old BWM for about 25% of what it cost new.
If you do prefer to buy a new car, you should buy with the intent of keeping it for eight to ten years. If you buy a new car every year or two, it will end up costing you a lot of money for the privilege. Remember that new cars depreciate a lot the moment you drive off the lot.
When you are ready to buy a car and you have another car (“trade-in”) that you need to get rid of first, I would recommend that you sell your “trade in” before you buy a new car. Car dealers will not give you as much for you trade as you can sell it for. They are in the business of buying and selling cars. This means that they make money each time they buy and sell a vehicle. If you look in your local newspaper and see that cars similar to the one you have to sell are going for $8000, a dealer might only give you $6000 if you trade it in. Typically, you will be a few thousand dollars ahead if you sell your “trade-in” yourself.
I strongly recommend that you avoid leasing a car. Yeah, you can drive a new car of your choice but then you have to give it back and have nothing to show for it. You are much better buying a car and keeping indefinitely. To live rich is to not have car payments.
But, before you run out and buy a car, ask yourself do I really need a car? If you live in a city, a car may turn out to be more hassle than it is worth. You have to deal with parking and traffic. Not to mention higher insurance costs. You might decide to forego the car and walk when you can or take a taxi. If you really need a car on occasion, you can always rent one. Companies like Enterprise will even pick up. Some cities like Portland and Seattle even have a “Flex Car” program that enables you to use a car when you need one and only pay for the hours that you use it. This can be a great way to have the benefit of a car when you need one (for things like shopping trips) but not have the ongoing expense of one sitting in your garage.
If you live in a city with good public transportation, like light rail, subway, bus, train, etc., you may find that it is more convenient to travel to work or sporting events, etc. using one of these methods. With public transportation, there is no sitting in traffic jams, no circling the block looking for a parking space or having to shell out lots of money for the privilege of parking your car several blocks from your destination. Not to mention how much you will save on the cost of fuel.
Some people prefer to get around via a bicycle or motorcycle… find what works best for you and go for it.
Although, I own a car, an eight year old BMW, my preferred method of transportation is walking. I enjoy the ability to see things that I cannot see from a car. Additionally, I enjoy the health benefits of walking everyday. I highly recommend that you live within walking or biking distance of your office…it is very freeing. Think of this, I can walk to my office and back in about 15 minutes. While you are stuck sitting in traffic, I am out kayaking or meeting friends for drinks.