A car, is a luxury.
Obviously, if you live in the middle of nowhere, a car would be an essential, but only if you couldn’t move to an urban city where public transportation or walking would be an option.
Therefore, I would only buy a car if the following criterion were met:
- I need it. Like seriously-can’t-walk-or-take-the-bus, need it.
- ..and I need it for WORK. I need to make $$ to cover this car, after all.
- I can afford it, taking into account insurance, parking, gas, and maintenance.
Otherwise, it’s a luxury.
In the case of this year, I needed it for work. Without the car, my commute would be at least an hour and a half, up to two hours. With the car, it’s 20 minutes to half an hour. Saving an hour to two hours of my life in commuting time (especially with a Baby Bun!) is WORTH IT.
That’s 10 hours a week or a full week’s of work (40 hours), which considering the price I paid for the car (around $10,000 all in), pays for itself in about 2-3 weeks in working dollars.
Now if I were to think about being able to expense the mileage for this car, I actually won’t be paying off this car with company reimbursements until a full 2 years of working or more.
I spend about $300 a month in gas or $3600 a year, so I am hoping to take that all into account by the end of the month to estimate when I could have the car “paid off” or repaid through mileage reimbursements.
Technically, I won’t be working long enough to pay it off through reimbursements but at least I have the car for the future.
So I’m always puzzled when people who live downtown right by subway stations say “I just graduated and I bought myself a car to get around because I need and deserve it!“.
Personally, I had to go through a huge mental exercise and all this rigamarole to even let myself buy a car, and a USED ONE at that above $2000 and I am far from being broke.
If they really did the math on what this car would be costing them, they might feel mini heart attacks if they realized it sucked up 30% or more of their net income.
So I don’t really get it when people treat themselves to new cars they can’t afford to keep.
It’s like buying a puppy without realizing that they cost money in veterinarian visits, food, toys and so on.
Or having a baby without realizing they will need to be on maternity leave at lesser pay, and that babies cost money in diapers, formula (even the best laid plans to breastfeed and save money, may never work out, like in my case)…
All of those things cost money after just the initial cost of the purchase, and no one deserves any of it. Deserving something is not linked to owning stuff.