Millionaires Don’t Buy New Cars?

Go Curry Cracker had a good article on his purchasing decisions for his new car. It starts with some of the basic advice of the book, Millionaire Next Door. He then walks through his decision making process on what to buy, used vs. new, electric vehicles, cost of ownership, and financing vs. cash purchase. Overall its an excellent article for anyone thinking of getting a new/used vehicle in the near future.

My history (and Mrs. 39 Months) is interesting, in comparison to the Millionaire next door. The book discusses the pluses and minuses of purchasing new and used, when to trade in, when to lease (almost never). For us, we tend to purchase new, and then drive the vehicles forever. I have owned four vehicles in my life, and two of them I have left on the side of the road after 100,000+ miles/multiple years. Literally driving them till they died.

My third vehicle I put 280,000 miles on over 10 years, and finally traded it in when the creaking on it (whenever I braked) go too bad. I’m now driving my fourth car, a 4-door sedan, with 180,000+ miles on it over 11 years. I hope to keep driving this one till I decide to retire – and then it’s a truck!

Mrs. 39 Months has only owned two cars. The first she drove for 16 years before trading it in, and the current one, which she has driven for 14. While she doesn’t put as many miles on it as I do (due to work) she also doesn’t see a need to purchase a new one every 3 years.

Well, Mrs. 39 Month’s car has started to have some electrical problems (bad symptom) so she has started looking for something new. She has a good idea of what she wants, but due to the current issues with the automotive supply chain, we haven’t been able to find what she is looking for available. So we’re nursing her car along right now until maybe 2022. Hopefully…..

The benefit of being FI and in good financial shape is that we’ll be ready to pay with cash on this (and my future purchase). Hopefully we can get a good deal here and she’ll have another car she can drive for 15+ years. Wish us luck.

What is your car buying story?

Mr. 39 Months

4 thoughts on “Millionaires Don’t Buy New Cars?”

  1. We bought our car new and we financed it b/c the rate was under 3% and it was better to have the tens of thousands of dollars fully invested. Given how much we drive the car, we’re more comfortable getting something new with the full warranty — so we can drive it into the ground and not someone else!

  2. Our experience is very similar to yours, even though we’re also familiar with the advice from The Millionaire Next Door. I have had two new cars since 1995, while Mrs. ROMT has had two new cars since 2001. Right now she’s driving a vehicle we bought in 2009, while mine was purchased in 2012. We’d like to replace hers relatively soon, but are willing to hold off until the chip shortage is resolved and (hopefully) new car inventories are larger and prices are lower. It will be several years until I replace mine (similar to you, likely with a truck). Like you, our goal is to pay cash, but the thought of purchasing a couple of new vehicles in the late stages of working/early stages of early retirement is a bit intimidating!

    1. I agree. Hopefully we’ll buy the vehicles before we decide to retire – though we could do it right now. Covid is certainly making a mess of a lot of folks FIRE plans right now!

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