CFI Blog

Why Drive a Beater?

“I know a lot about cars, man. I can look at any car’s headlights and tell you exactly which way it’s coming.”
–Mitch Hedberg

“Driving a brand new car feels like driving around in an open billfold with the dollars flapping by your ears as they fly out the window.”
–Grey Livingston

I drive a beater. For those of you who don’t know what a beater is, it’s a car that can be given a name. If it were totaled in a wreck, you’d get far more in insurance proceeds than you would ever get selling it in the open market. Your friends laugh at your vehicle and, when offered a ride, suddenly profess the need to get in shape and run the 20-mile distance to your destination.

I’m also not the type who brags about how cheap he is. I don’t make deodorant out of baking powder and dirt, and I don’t try to be the McGyver of household items. We travel quite a bit and we frequent restaurants much more than the average person.

I have, in the past, owned one very nice car. It was a brand new, 1997 BMW 318i convertible, and yes, it was a sweet ride. If I had Warren Buffet’s net worth, then I would buy a convertible BMW. I thoroughly enjoyed driving that car, except when the governor kicked in while I was on the Autobahn, keeping me from going faster. Who knew that a BMW would hit its max speed at 117 mph? Suddenly, vans were passing me, putting paid to my notion of having a car blessed with power and speed.

Why, though, as a professional adult, do I insist on driving a hoopty?

Ah, allow me to name the ways that O Hoopty, I love thee.

Ah, allow me to name the ways that O Hoopty, I love thee.

  • It’s paid for. For those of us who at one time or another in our lives have experienced the anchor of a car payment, once it’s gone, it’s an experience you never want to revisit.
  • Cars are almost always going to go down in value. Think of the graph of y=1/2^x. This is the value of a car over time. Why buy at the top of the curve?
  • I’d rather tie up that money in either investments or experiences. If I buy a new-to-me car every 5 years and spend $5k on the car – being careful to buy a mechanically sound car so that I don’t find myself as penny-wise and pound-foolish as I pay for the fifteenth new transmission – rather than every 3 years and spending $20k on the car, I’ve freed up approximately $5,333 per year to spend on other things.
  • Who do you really think you’re going to impress with that car? If someone makes a permanent judgment about you based on the car that you drive a beater, then you don’t really want to associate/befriend/love/do business with that person, do you?

If you really, really, really love cars and want to buy a nice one and have room in your overall investment and spending plan for one, that’s great. However, don’t just buy a nice car because you think that you have to impress someone. You might blow me off the line at the red light (beware, though, I have lightning reflexes!), but by the time you’re a speck in my forward vision, I’ll have forgotten all about you. Your pocketbook, on the other hand, may not for a long time.

Author Profile

John Davis
John Davis is a nationally recognized expert on credit reporting, credit scoring, and identity theft. He has written four books about his expertise in the field and has been featured extensively in numerous media outlets such as The Wall Street Journal, The Washington Post, CNN, CBS News, CNBC, Fox Business, and many more. With over 20 years of experience helping consumers understand their credit and identity protection rights, John is passionate about empowering people to take control of their finances. He works with financial institutions to develop consumer-friendly policies that promote financial literacy and responsible borrowing habits.

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