When I got my speeding ticket for going 35 mph in a 25 mph zone, all my friends laughed and jibed.

“Are you sure Moose can even go 35 mph in two blocks?” (Moose was a slow, 14 year old Land Rover Discovery)

“How the hell can you speed during rush hour traffic at 6:45pm? It’s bumper to bumper then!” (SF traffic is horrendous thanks to robust employment compared to five years ago)

“Dude, you’re a victim of racial profiling. Out of all the cars out there, they chose your piece of shit? Don’t they have something better to do?”

I laughed at all three responses, but then I was asked again, “What color were the police officers?”

“They were both White,” I responded.

“Ah hah! Proof right there. You were targeted!” responded my Hispanic friend.

“Come on, that’s just a coincidence,” I replied, even though I was miffed at getting pulled over when everybody was going the same speed during rush hour.

“Never forget Rodney King, Don Sterling, Trayvon Martin, Eric Garner and the town of Ferguson!” shouted my friend with one fist raised up high!

Are you wondering whether to fix the car or buy a new one? Used car prices are up huge post pandemic. Therefore, new cars may be of better value. That said, buying any type of car that costs more than 1/10th your annual gross income is a waste of money in my opinion.

This month is turning out to be an expensive one.  Originally, I was planning on joining the no-spend November movement given I’ll be spending more than normal during the holidays.  I’ve been tempted to buy a new or new used car for the past year since Moose is 11 years old and needs some work done.  It was basically sell Moose now and avoid the extra expenditure, or buy a new new/used car in great condition.

After much deliberation, I decided to keep Moose and do some work. After 4 years, his brakes finally needed replacing. My auto-mechanic of 10 years recommended I change both rotors and pads in the front since Moose is heavy up top, and just change the pads in the rear.  

I followed his directions for a total cost of $705 ($400 parts, $300 labor).  $705 after tax is pretty darn good, especially after 4 years.  I’ve also heard folks spend $1,200-$1,500 on brakes before.  Expensivo!

When I went to pick Moose up, he wouldn’t start!  It turns out the battery only had a couple months left to live after 5 years. I’m glad Moose didn’t start at the shop, rather than somewhere in the snowy Sierra Nevadas this winter!  That would have been such a disaster. I spent another $90 for the new battery for now a total cost of $795.  Tick, tick, tick, things are getting up there.

DECIDING ON WHETHER TO FIX OR BUY A NEW CAR

The reason why I spent months deliberating on whether to fix Moose or buy a new car is because Moose only has a Bluebook value of around $4,000.  Therefore, a $800 fix equates to 20% the value of the car, and the value DOESN’T come close to going up by the amount spent.  Maybe after the new brakes and battery Moose is now worth $4,200.  So in essence, it’s almost like I’m losing money by fixing it to the tune of $600.

Five things to ask yourself before buying a new car:

1) Can you afford a new car?  You can only afford a new car if your income is at least 10X the value of the car you wish to purchase. This is known as the Financial Samurai 1/10th rule.  If you make less than 10X the value of the car, then you are hurting your finances.  Do you think Mark Zuckerberg drives around in a $800 million dollar car?  Heck, I was at a party with Mark Pincus, the founder of Zynga and the valet only went to retrieve a $75,000 BMW X5, and Mark is worth billions!

2) What percentage will the costs be compared to the value of your car?  Maintaining a car gets relatively more expensive as time goes on because the value of your car is always decreasing while costs generally increase due to labor and component inflation.  If a fix costs more than 30% the value of your car, and you can afford a new car, consider buying a new.  The benefit of buying a new car is that I won’t have to buy new brakes, tires, battery, etc.  Take the cost of maintenance of your old car and subtract it from the purchase price of your new car and re-calculate whether you can afford the new car.

3) Do you have any debt or other big expenses on the horizon?  Think property taxes, income taxes, trips, credit card bills, student loans, and other debt.  Best to minimize your expenditure on a depreciating asset if you have other large expenses on the horizon.  For some reason, guys right after college are especially weak at controlling themselves when buying a new car.

4) How long do you believe your old car will last, and how long do you plan on driving it?  My new brakes and battery should last at least 3 years.  My existing tires should also last another 3 years since I only drive about 7,000 miles a year.  Moose has 109,000 miles on it now, and he should have no problem going to 150,000.  Moose’s survival is consistent with the time I’d like to stay in San Francisco.  I have hope he will last for 6 years longer, which happens to be when I look to change sceneries.

5) Know your car’s maintenance cycle.  The big maintenance intervals are generally after 15,000 miles, 30,000 miles, 75,000 miles, 100,000 miles, 125,000 miles, 150,000 miles, and so forth.  You should consider selling about 5-10,000 miles BEFORE the main intervals and let the new buyer pay for maintenance.  I recently did the 100,000 mile service, and want to milk it for as long as possible.  If you don’t sell your car before it hits 100,000 miles, then you might as well keep it for as long as possible.

Related: The Ideal Length To Own A Car Is Not Forever

Fix The Car And Take A Gamble

Spending $795 on Moose is taking a gamble that nothing else major breaks down on a 11 year old car.  It would be quite unfortunate if an alternator blew up, costing me another $1,000. Then Moose becomes a serious money pit as now I’m spending 50% of the value of the car on maintenance.

My desire for driving a fancy luxury car has essentially fallen to 0 given the movement against luxury. When it’s time to make the decision again on buying a new car, I will consider safety issues as the main criteria.

In 2021, I am driving a 2015 Range Rover Sport HSE. I plan to own the car until at least 2025. It’s a great family car for my wife and two children.

Related: Plug Or Patch A Tire?

Recommendation For Your Car

Lower Your Auto Insurance Costs: Check out AllState online. They have some of the best plans with the lowest rates around due to their lower overhead costs. It’s worth spending a moment filling out a quote to see if you can save some money. Car insurance is one of the largest ongoing expenses for car owners. Esurance has good driver discounts, and multi-product discounts as well.

For more nuanced personal finance content, join 100,000+ others and sign up for the free Financial Samurai newsletter. Financial Samurai is one of the largest independently-owned personal finance sites that started in 2009. Everything is written based off firsthand experience. 

Consumers must always stand up for your rights. Don’t let bad products get away with being bad products. You deserve the product that was advertised.

One of the main reasons why I bought a 2015 Honda Fit was due to the advertised fuel economy of 32 MPG City, 38 MPG Highway, and 35 MPG overall. My old vehicle was getting 12-16 MPG as a 2000 SUV, and I wanted something more economical to drive around town and to Lake Tahoe.

After going through 8 gallons of a 10.9 gallon tank (fuel light went on), I discovered that Rhino wasn’t getting anything close to the advertised 32 City MPG.

Rhino clocked in a paltry 21.6 MPG, or a whopping 32.5% lower than advertised. I’ve since refueled the tank and driven another 200 miles and am now getting closer to 20 MPG in the city. I don’t know about you, but I find this difference egregious.

Here are some examples of getting 32.5% less than you paid for:

* Imagine paying $80 for a 60 minute massage and only getting 40.5 minutes worth.

* Imagine paying $100 for an NBA basketball ticket, and being kicked out 10 minutes into the 3rd quarter.

* Imagine paying $70 for a MLB ticket, and not being able to participate in the 7th inning stretch.

* Imagine paying $170,000 for a private university and only getting to attend for three years.

* Imagine paying $299 for the latest iPhone and only getting 43 GB of storage instead of 64 GB.

* Imagine selling an ounce of cocaine for $1,200 to your neighborhood gangsta who discovers that 1/3rd of the weight is actually powdered sugar. You’d probably get shot.

We buy things based on the advertised features. If the company lies about the feature, then obviously the consumer is being misled and should either get his or her money back, or get a discount based on the shortcomings of the advertised feature. I’m not going to buy the latest Macbook Pro 13″ if it performs like a Macbook from 2007.

Besides the MPG, I also bought the Honda Fit due to its short length of 160″ so I can find more parking spots. The final reason why I bought the Fit was due to Honda’s history of producing reliable cars that are hassle free.

I then got a letter in the mail from Honda.

Deciding on leasing or purchasing a new car is a big decision that can cost you money if you make the wrong one. As a car fanatic since the 1990s with dozens of cars under my belt since, let me provide some tips on how to choose.

Leasing Or Purchasing A New Car Decision

After 10 years, I’m sad to say Moose is gone! He just had too many problems that cost too much to fix as a 14 year old Land Rover Discovery II. I hated to let him go because he was like my big boy.

I still remember finding him with 87,000 miles at the orphanage (Craigslist) for $10,000 in early 2005. The owner got a sweet consulting gig in Amsterdam from Pricewaterhouse Coopers and she had to sell quickly. We agreed on the steal price of $8,000 and the fun journeys to Tahoe, Napa, and Carmel began.

I actually hate driving today. There are just too many cars in San Francisco and the Bay Area now that the economy has roared back.

Traffic was very manageable just three years ago, but condos are sprouting up everywhere downtown next to main arteries, making driving very stressful. The worst is when delivery or garbage trucks double park during rush hour and traffic backs way up. Dear local politicians, please outlaw such activity.

There was a point where I almost thought about not buying a car at all, and just using UberX as it is so cheap and signing up for a ride-sharing program since prices have come down so much. But in the end, I still valued my freedom of being able to get in a car and drive anywhere whenever I wanted. 

We previously described the mass affluent class by income, wealth, and investable assets. Mass affluent is essentially a subset of the middle class that’s well educated and upwardly mobile due to their education and optimism. Given you’re reading a personal finance site for fun and education and I’m writing personal finance articles, let’s all consider ourselves mass affluent with upside potential! Hooray!

After 10 years of owning the same car, I’ve decided to finally buy something new within the next six months. There are a number of problems with Moose, a 2000 Land Rover Discover II, including:

• Warning lights on for the traction control, hill decent, and ABS.
• Check engine light is permanently on.
• Sunroof doesn’t open or close.
• Heated seats don’t work.
• No Bluetooth.
• CD changer doesn’t work.
• Front passenger seat no longer adjusts due to broken motor.
• Cigarette charger doesn’t work, which means I can’t charge my mobile devices on long road trips.
• Brakes are mushy even after changing them two years ago.
• Not sure if the airbags work since they haven’t had their 10 year service.
• Gears don’t connect once every 50 starts for some reason. Have to turn him off, wait for 10 seconds, and turn back on to reengage the gears.
• Two balding tires that cost $200 to replace each.

Other than these 12 problems I can think of, Moose runs like a champ!

Over the past three years I’ve spent about $1,100 buying him a new alternator, a new serpentine belt, a tune up, and fixing a massively leaking fuel pump. If there is one more problem that costs over $500, I’m sad to say that I’ve got to let him go. It’s hard to do because he’s been so good to me. Moose has never broken down, not even in the worst Tahoe snow storm. If I’m ever in an accident, I feel safe that Moose will hold up better as well.

I’m starting to fear that I’ll one day get stranded somewhere when Moose experiences some transmission glitch. I know all I have to do is call roadside assistance and wait 45 minutes for a boost or a tow, but that’s not ideal if I’m rushing somewhere. If you have an older car, getting roadside assistance for several bucks a month is the best thing ever. I did leave my lights on several times before and roadside assistance came quickly to give me a jump.

I’d love to finally find a new vehicle that has all the creature comforts that many people for the past five years have taken for granted. You know, like being able to plug in your mobile phone to listen to some tunes. I’ve come up with a list of vehicles I’m considering for myself and for the mass affluent. Let me know which particular car or category you’d choose and why. 

Are you wondering whether it is possible to use a credit card to buy a car? The good news is that you can! But not at every single auto dealership due to the credit card fees.

The last five cars I’ve owned have all been purchased by cashier’s checks. I loathe going into debt on an asset that is guaranteed to depreciate. In fact, I dislike buying anything that is guaranteed to depreciate!

I stopped by the BMW dealer on the way home from golf one day and checked out their new 650i coupe series. If someone could figure out a way to bottle that wonderful new car smell, they’d make millions off fanatics like me!

Given this particular 650i coupe was priced at $104,000, I decided to check out the more moderately priced 2016 X3, 2.8 litre engine SUV for $48,000.  Same new car smell for half the price. Score!

CREDIT CARD LIMITS FOR CARS

Out of curiosity, I asked the saleswoman whether I can put the car on my credit card which has a $50,000 limit.  She said, “Nope!”  The most I can charge on the card is $3,000  What the heck is the point of carrying a credit card if I can’t charge a BMW on it? Gee whiz!

In actuality, the $3,000 limit is a good thing since I’d be tempted to buy a new car every single year! I asked her why the $3,000 limit?  And she responded, “Fees, those darn fees.”  Credit cards charge 1-2% fees on average for every single purchase.  2% on $50,000 is $1,000 out the door.  Hey, kinda like PayPal fees, but not as bad!

I then told the saleswoman, “What if I just buy the car for 1% more than asking price, then can I use a credit card?”  She thought about it for a moment and still declined. Of course I would prefer not to pay more than I have to for anything. I just thought this would be an interesting solution.

“Our policy, no matter what your credit limit is, is still $3,000 maximum. The reason is we don’t want people charging their downpayment, which then defeats the purpose of a downpayment.  We don’t want a situation where a buyer purchases a car on credit, totals the car, and can’t pay either the payment or the costs necessary to fix the car!  A buyer needs to have skin in the game, that’s our bank’s policy.” explained the saleswoman.

Wait, so she’s saying I can’t borrow money to pay for a down payment to borrow more money? What the hell kind of dealership / country is this anyway? I thought we can do what the government and millions of Americans do everyday and take from one, spend it on ourselves, and never have to pay it back!

CREDIT CARD LIMITS EVERYWHERE

The $3,000 credit card limit policy is ubiquitous. I called Mercedes, Audi, and Range Rover, and they all said the most someone can charge to purchase a car is $3,000. The rest must be financed by their own bank or paid in cash.

I was really looking forward to charging $50,000 for the X3 and getting enough rebate points for a round-trip ticket to Europe. Alas, I will settle for good old Rhino, my inexpensive Honda Fit, keep the $50,000 and have the optionality of buying 100 round-trip tickets to Hawaii instead.

RECOMMENDATIONS

* Manage Your Money In One Place: Sign up for Personal Capital, the web’s #1 free wealth management tool to get a better handle on your finances. You can use Personal Capital to help monitor illegal use of your credit cards and other accounts with their tracking software. In addition to better money oversight, run your investments through their award-winning Investment Checkup tool to see exactly how much you are paying in fees. I was paying $1,700 a year in fees I had no idea I was paying.

Lower Your Auto Insurance Costs: Check out AllState online. They have some of the best plans with the lowest rates around due to their lower overhead costs. It’s worth spending a moment filling out a quote to see if you can save some money. Car insurance is one of the largest ongoing expenses for car owners. Esurance has good driver discounts, and multi-product discounts as well.

Recommendation To Build Wealth

Manage Your Money In One Place. Sign up for Personal Capital, the web’s #1 free wealth management tool to get a better handle on your finances. In addition to better money oversight, run your investments through their award-winning Investment Checkup tool to see exactly how much you are paying in fees. I was paying $1,700 a year in fees I had no idea I was paying.

After you link all your accounts, use their Retirement Planning calculator that pulls your real data to give you as pure an estimation of your financial future as possible using Monte Carlo simulation algorithms. Definitely run your numbers to see how you’re doing. I’ve been using Personal Capital since 2012 and have seen my net worth skyrocket during this time thanks to better money management.

Updated for 2021 and beyond.