Financial freedom is a goal many strive for, but the harsh economic realities of today's world make this a difficult thing to achieve for many. However, there is one area of most people's lives that is wide open to financial improvement, and that is their cars.
It's a fact, most people are spending a significant amount of their income. According to the Bureau of Labor Statistics, the typical household spends seventeen percent of their total household expenditures on car ownership costs. Take a minute and think about how much this number is for you. Better yet, go out and calculate what your total car ownership costs are. Be sure you're including everything, not just car payments. Include insurance, gas, repairs, registration, depreciation, taxes, and everything. I can almost guarantee you looking at this number will not be pleasant, but please take the time to go ahead and see what you're dealing with.
Done with that? You're probably quite shocked now at how much really spend on your vehicles, especially if you're a new car owner. Would you like to reduce that number drastically? It may not seem possible, but there is a really easy way to save an incredible amount of money on your car costs, and that is to drive a clunker.
"Great," I can hear many of you saying, "I could also cut down on food costs by eating only ramen." For many, what I'm proposing will never be a viable solution, and that's OK as long as they're happy with their finances. However, if you want to get serious about controlling your spending, read on to find out why I think clunkers are such wonderful things.
First of all, let me say that clunkers can be unbelievable cheap compared to what you might be used to spending on a car. For the past five years, I have been driving a 20 year old clunker that I picked up for $1500, which is obviously hugely less than any new car, or even any the large majority of used cars. It's a normal sized five seater, four cylinder car, and gets me an average of 25-35 mpg, depending on my total highway usage. I pay peanuts per months for the liability insurance required by law, and nothing more, as it doesn't make sense to spend more on a car this cheap. I spent almost nothing to buy the car (with no reoccurring payments or interest), my insurance is super cheap, my maximum depreciation is just the difference between the low cost of the car and its scrap value, and I'm getting great gas mileage. So affordable.
But, many of you are probably screaming at me in your heads right now about what I'm leaving out of this picture: repairs. Doesn't this thing need a new engine or transmission every year? The simple fact is that I've spent very little on repairs over the five years I've owned the car. The most expensive single repair was replacing a broken alternator, which I installed myself. Of course, there is always the chance of a catastrophic failure occurring, like a broken engine or transmission, but if something like this happens, I can either try to repair (which might not be that expensive), or simply spend $1500 on another clunker that will last me another five years. I'll still be way ahead of the game when it comes to car costs.
Many of you will just ignore the advice in this article. After all, who really wants to drive a clunker around all the time? And in fact, many people do have impressions they need to keep up that require a nice car (such as real estate agents), and thats fine. Many can afford a nicer car without a problem, and thats great. However, most people just use their cars as basic transport, without any need for the latest special features, or any of the benefits of a newer car. Buying an older vehicle will save you a lot of money over the years, and in today's tight times, thats something everyone can appreciate.
US $3,001.00
