“YOU WORKED HARD to graduate, so Nissan wants to reward you with an easy, stress free buying experience with our College Preferred Pricing.” – Nissancollegegrad.com
“YOU'VE CHOSEN THE ROAD YOU'RE ON. NOW PICK A RIDE TO GO WITH IT.” – Gmcollegediscount.com
“YOUR ACHIEVEMENT DESERVES RESPECT AND REWARD.” – Hyundaiusa.com
“Hey, you graduated college. Let Honda Financial Services help you celebrate.” -Hondafinancialservices.com
“If you just got out of college, you'll be starting a career and making that transition from the academic world to the working world. You have better things to do than worry about how you'll get to your job.” – Mitsubishicars.com
“With the Ford and Lincoln College Student Purchase Program, you pick out your ride — and then add up the savings!” – Ford.com
“YOU'VE EARNED IT, NOW OWN IT.” – Dodge.com and Jeep.com
I could drop the mic and end the post here, but I'll continue.
I very clearly remember the day that I was scrolling through my Facebook news feed a few weeks after I had graduated college. I didn't have a job yet, and I had just moved back home to start the search. I saw this awesome looking picture of a red Dodge truck tucked in-between some friends' recent irrelevant posts that said something along the lines of: “Congratulations on your degree, you deserve a new truck!”. Heck yeah. I had earned a new truck, and it was time to reward myself.
College had made my brain hurt, and not only would a new truck have made me feel better, but it would have also shown other people that I was as awesome as I thought I was.
Fortunately, (this will look strange) I was broke and had $40,000 in student loan debt that I hadn't made a payment on yet. My feeble mind hadn't even realized that interest had already started compounding on my loans. If I had been able to scrounge some cash together at the time, I would have tried to buy that truck – because I deserved it. Duh.
That was the first time that I had been made aware of such awesome targeted marketing. Looking back on it, Dodge had a pretty good strategy for getting people to buy new cars as soon as they started making any significant amount of money. Not only could they get some business in the short term, but they could train me to become a new car buyer with their company for the foreseeable future!
This may seem weird, but I have no issue with the marketing strategies that car companies use to get young people into cars. What can I say, I am a fan of capitalism and not ashamed to say it at all. I'm sure some people may try to convince themselves that this is predatory advertising – taking advantage of the poor college graduate that doesn't know any better and needs instant gratification for their educational achievement. I totally disagree. I was an adult, it was my own fault that I didn't know any better. Also:
If a sentence and a picture is enough to convince me to take on $30,000+ in additional debt, then I have some larger issues to handle.
Let me be clear about something before I go on. You don't deserve a new car. You don't deserve a reward. You don't need help celebrating. You don't deserve anything for graduating college at all. Ever.
If your feelings are hurt by the previous sentences, I'd be happy to reward you with a celebratory band-aid for a 1000% markup, because you deserve one.
I didn't buy the new truck, and my net worth thanks me for it. I have had the same car since my first year of college, and I proudly drive it around every day. It is a sweet bright red Chevy Colorado with almost 90,000 miles on it, that cost about $12,000 brand new because it was a demo car.
My parents are incredible people, and they bought it for me so that I would have a reliable car going to college. (I know that this isn't the case for everyone, but I also know several people my age that were lucky enough to have their parents do something similar for them as well. Also, my parents might read this blog.)
My car doesn't have power windows, power locks, a key fob with a panic button, fancy gadgets, seat adjustments, or a back row. It doesn't even have the handles that passengers can hold on to when I take a turn too fast – which can be amusing from time to time. It DOES have cruise control, which I have always thought was silly because it's the least useful option out of everything that I just listed.
I used to be a little self conscious about my car, because I thought it was a pretty ridiculous looking car for an adult professional to be driving around. I can't tell you how many times people have asked me when I am buying a new car.
I have a job now and I can “afford” it – or so I am always told. It also has or has had the following issues:
1) The brakes feel a little soft because I changed them myself (to save money of course).
2) It used to have a really awkward, rough idle.
3) It had a check engine light on for a while.
4) It used to have a faulty theft-lock that would literally not allow me to start my own car, but I fixed that with the help of Youtube and electrical wire from Home Depot.
5) The A/C fan motor squeaks. I fixed that once by myself, which would explain why the squeak came back again.
6) My speakers rattle when the radio volume is turned above 12, which is hands down the most infuriating thing on this list.
So why do I keep it when I can easily apply for a car loan and get something nicer? Easy. I started to notice that I had more money than my friends…and I'm a teacher. Weird right?
My Chevy Colorado is like a Ferrari for my bank accounts.
My truck has been paid off for a few years now, which means that my yearly auto expenses are drastically lower than everyone else that I know who has a car payment. Because the car is older I have the cheapest liability insurance possible, which keeps a ton of money in my pocket every year as well (It costs less than $500 a year – which is awesome).
I have had some maintenance issues with the car, but nothing catastrophic or over $1000…yet. Even when I do have that type of repair cost, I would still come out better at the end of the year than the people my age who have financed a new car. I would come out better if I had 3 major repairs in a row. Unfortunately I know several people that cite car maintenance costs as an excuse to finance their new ride.
My biggest and maybe most powerful advice for Millennials is to keep whatever car you have when you graduate from college for as long as you can keep it. Don't let the masses tell you that you deserve a new one – they are poor and will envy your financial freedom later on. I will keep mine until the wheels fall off, and then I will buy another used one with cash.
It is SO easy to listen to advertising and start believing that a low monthly payment won't hurt that much, but it could set you back a long way when it comes to building wealth as a young person and getting out of debt.
The average new car costs $32,086, not including accrued interest at the end of your loan term. With that amount of money, you could pay down your student loans, invest it in the stock market for the next 30 years and turn it into $559,881.52 at a 10% return, or use it to purchase your first real estate investment property. All of those things are awesome. The main point is that you have options to start your path to becoming wealthy or become debt free.
When you purchase a new car you have options like seat warmers. Wonderful. I haven't even mentioned the unbelievable amount of depreciation that your shiny rolling debt burden will take as soon as your roll off of the car lot feeling temporarily happy (Hint: That feeling will wear off, and it will be replaced with buyer's remorse about a month later when you realize that you are trapped for the next 6 years).
You can buy a brand new car later in life when you are wealthy and the cost isn't more than your total net worth. If you have a older car – you HAVE to take advantage of the financial opportunity. I have, and I am doing pretty well for myself lately because of it.
What do you think? Do you drive an older car, and is it worth it? I’d love to hear your opinion, let's talk about it in the comment section below.