In 2002, at age 25, I foolishly bought a new luxury car, a Mercedes Benz G500. I had just gotten a raise and a promotion to Associate. Why not YOLO and feed my car addiction at the time? Dumb.
The G-Wagon cost $78,000 out the door, which was actually a good deal at the time. Just a year prior, a dealership in Santa Fe with import rights was selling G-Wagons exclusively for $150,000+.
A year later, I sold the car for a $18,000 loss because it wouldn't fit in the garage of this condominium I wanted to buy. It was two inches too tall for clearance!
I decided it was more responsible to buy this two bedroom, two bathroom condominium facing Lafayette Park than keep owning an expensive car with a $760 a month car payment. This is when my love for real estate, my favorite asset class to build wealth began.
After taking a bath on my new luxury car, I swore never to buy another again. When you're on your path to financial independence, having a nice car is the last thing you need!
New Luxury Car Prices Are Outrageous Today
After the G-Wagon I went the complete opposite direction and bought my mom's 1997 Honda Civic for $7,500. I then went through a series of other cars, including a 1997 BMW M3, 1995 Nissan Pathfinder, 1983 BMW 635 CSi classic, 2001 Land Rover Discovery II, and new Honda Fit. All the cars were between $7,500 – $20,000, great value in comparison.
Then in December 2016, with a baby on the way, I bought a one-year old Range Rover Sport for $60,000 after tax. It had 10,600 miles on it and I thought it was good value because brand new, it was selling for about $80,000 after tax.
Given I'm thinking of buying a new car in mid-2025, when the Range Rover Sport is 10 years old, I decided to drop by the Land Rover Dealer in Redwood City after a couple hours at the pool with my kids. I hadn't gone to a car dealership since 2020, so I was curious to see what new luxury car prices were.
New Range Rover Sports Are Way Overpriced
When I got to the Land Rover dealer, I was shocked. A brand new Range Rover Sport SE cost a whopping $104,600 before tax, or about $113,000 after tax! That's a 41% price increase since 2016. The car is a beauty with 23″ rims, comfy seats, and an updated body style. But wow! That's a lot of money.
Then I looked at another Range Rover Sport SE model at the San Francisco dealer that cost $119,870 before tax because it had a sport package and protection film. After tax, the car would cost about $130,000. Who can afford these prices?
If you follow my House-To-Car Ratio for financial freedom, you'd need a home worth at least $6.5 million to justify spending $130,000 on a new RRS. Alternatively, you can just keep your car and watch your house-to-car ratio increase as your car depreciates.
A Look At New Luxury Electronic Vehicles
After being blown away by the cost of new Range Rover Sports, I decided to look at some electric vehicles by Mercedes Benz because it was on the way home. Don’t shoot me for looking.
I've got a Tesla wall charger in my new house and Mercedes and other brands will start being compatible with Tesla's chargers in 2025 and beyond. Teslas are nice but they are ubiquitous here in San Francisco. I wanted something different.
I've been reading all over the news that EV prices have declined, especially Tesla's average car price. At last, maybe getting an EV is the way to go. See the chart below that shows a big decline in EV prices since mid-2022.
Unfortunately, a 2023 (not 2024) Mercedes Benz AMG EQS electric sedan sitting in the showroom was even more expensive than the Range Rover Sport! The asking price was $153,000 before tax, or about $166,000 after tax! Spending $166,000 for a last year's model electric model sedan is also outrageous.
Then the kiddos and I hopped into a Maybach EQS 680 for $197,350 pre-tax. It was nice, but come on now! I’d be stressed as hell driving or parking one of these things. One dent would cost $5,000+ to fix. It’s so much less stressful driving an old car. These luxury new car prices are clearly inflated.
After being disappointed in Mercedes Benz and Land Rover, I decided not to bother dropping by the BMW dealership and check out their iX models. Why bother when they're just going to charge a similar amount for an EV as well?
It really feels like only the rich or fools are buying new cars today.
A Better Spending Alternative
Instead of spending a fortune on a new luxury car, I could buy a well-equipped 2024 Toyota Corolla for $26,000 or a top-of-the-line Toyota Highlander for $60,000, which would save me between $106,000 and $140,000. With these savings, I would allocate 60% to the S&P 500, 25% to Treasury bonds yielding 5%, and 15% to a private real estate fund.
This approach feels much more responsible, providing both the satisfaction of owning a reliable new vehicle and enhancing our financial security for the future.
The concept of opportunity cost always weighs on me when I contemplate a significant purchase. I can't help but consider how much more money I could accumulate in 5-10 years through compound returns if I decide against buying the item.
Consequently, I've directed my indulgences toward investments in residential real estate and collectibles, such as rare books. With these assets, not only can I derive enjoyment, but there's also the potential to see a positive return over time.
Never Buying A New Luxury Car Again
After checking out cars at these dealerships, I decided to give up my search for a new luxury car. The prices are simply unaffordable for me without generating a significant amount of active income.
And there's no way my wife and I would be willing to go back to work and lose our freedom just to buy a luxury automobile. It feels way better to drive a more economical car that gets us from point A to point B at half the cost. Taking out a loan to buy a depreciating asset isn’t great.
I don't know who is able to purchase such cars. But clearly, many people must be doing well to afford such expensive vehicles.
If these luxury cars were priced between $60,000 – $70,000, I'd be tempted to buy one in 2025. However, they are priced so far what I believe they are worth that I have zero temptation to splurge on these type of vehicles. No YOLO spending here!
I have a better solution to my luxury car desires. Keep owning my current car for longer than planned.
Going To Keep My Car For Six More Years
Initially, I asserted that the ideal ownership duration for a car is 10 years. However, my statement was ambiguous regarding whether to replace a car after it reaches the age of 10 or after owning it for more than 10 years. For instance, if you purchase an eight-year-old car, would it necessitate replacement after two years or after reaching 10 years of ownership?
After careful consideration, I've realized there's no definitive answer. As long as you adhere to regular maintenance, replace worn-out parts, and address any issues promptly, you should be able to safely drive your car for over 120,000 miles. My main concern for all drivers is safety followed by ballooning maintenance costs.
My own car will reach the age of 10 years in July 2025, and it's still running smoothly and looks great. It seems premature to consider replacing it next year, especially considering that I recently invested $890 in two new tires. Furthermore, I've already replaced the leaking water pump in June 2023, the vacuum pump in February 2024, and recently had an oil change.
With only 52,000 miles on it and an average annual mileage of 5,500 miles, I anticipate minimal issues with keeping it for another six years until it reaches 15 years of age. By July 2030, my car should have around 88,000 miles on the odometer.
An Expensive New Car Makes Your Existing Car Way More Valuable
The beauty of expensive luxury cars lies in the appreciation it brings to the vehicles we already possess. Upon discovering the latest prices, I've found my 2015 Range Rover Sport to be even more valuable.
With a new one priced at $115,000 out the door, I now estimate mine to be worth at least $65,000—$5,000 more than what I paid for it back in December 2016.
The horsepower is similar to the new models and so is the comfort. Besides that new car smell vs. my In N' Out burger interior smell, I just don’t see many benefits of driving a new Range Rover Sport for so much money.
Related: Options For Terminating A Car Lease Early
New Cars Make Maintenance Expenses Feel Cheaper Too
Given that I'll be keeping my car for five years longer than planned, I'll be especially diligent in addressing maintenance issues to ensure it remains as safe as possible.
For example, I've noticed a slight creaking sound when driving slowly over uneven pavement. This is likely due to worn sway bar bushings, which can be replaced for $450. Previously, I might have disregarded such a minor problem. However, now that I've decided to forgo spending over $100,000 on a new luxury car, these expenses seem more reasonable.
I'm willing to spend $1,500 – $2,000 annually for five years to address any issues with my car instead of spending $115,000 upfront on a new Range Rover Sport. Additionally, I could earn 5% risk-free interest per year in the money I save by not buying, totaling $28,750 after five years!
Moreover, if you're eager to purchase a new car, I've discovered that simply washing and vacuuming the interior revitalizes its appearance and makes it feel like new again. It's remarkable what a clean car can achieve. No need to spend hundreds of dollars on a professional car detail.
Cars often rank among the worst culprits for undermining financial independence among consumers. Americans frequently overspend on cars to their own detriment. Let's commit to keeping our cars for as long as possible to save money. Our future selves will undoubtedly thank us.
Reader Questions
Who is paying these exorbitant prices for new luxury car prices? Surely, everybody must be making over $1 million a year given people rationally follow my 1/10th rule for car buying right? Why are people willing to pay so much for a car instead of invest the money instead to secure their financial future?
Invest In Real Estate And Stocks Instead Of A New Luxury Car
Paying money for a new luxury car is a waste of money, especially if you are not financially independent yet. Cars are depreciating assets that won't make you money in the future. Instead of paying for a car you don't need, use that money to invest in real estate and stocks instead.
Take a look at Fundrise, my favorite private real estate investing platform. Fundrise was founded in 2012 and manages over $3.3 billion with over 500,000 investors. The firm focuses on single-family and multi-family properties in the Sunbelt, where valuations are lower and cap rates are higher. For most investors, investing in a diversified private real estate fund makes the most sense.
Personally, I've invested $954,000 in private real estate since 2016 to diversify my exposure and earn more passive income. As a result, I've been able to extend my freedom for work for many more years. Fundrise is a sponsor of Financial Samurai and Financial Samurai is currently invested in Fundrise funds.
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Defender P400 Dynamic. I’m personally looking at that being best choice for luxury SUV for me. Good resale value too. Went from RR big one to a 4 Runner and although much cheaper feels cheaper and less safe. What is safety worth? One Caveat on Defender is the options get you close to 100k quick. Get the Sport if you don’t like rear door sideways opening access as both are very nice. My RR lasted 12 years and 130k miles so you should be good for another 2-5 years.
Hope so. I only got 52K miles on mine and drive 6K miles a year. I’m shooting for 5 more years to get my House-To-Car Price ratio into the several hubdreds!
50k miles IS a new car. Spend $400 on deep detailing and you’ll look the same as the showroom option…
Can’t pay $400 to detail when I can pay zero to wash and vacuum my car myself, which I enjoy. Listen to a podcast and I’m done within 30 min. Car doesn’t stay clean long enough to pay for detailing.
I personally like buying high end cars and keep them until they reach 30 years or 500k kms. My current car is a Diesel Mercedes class C 220 CDI released in 1998, I might replace it with a new hybrid diesel around 2030 when diesel car prices crash due to new EU legislation.
In 1974 the average new car price was $4,135, which equates to $27,456 inflation-adjusted 2024 dollars. However, the average new car price in 2023 was $49,388. The median household income in 1974 was $11,100 or $73,704 inflation-adjusted 2024 dollars, while in 2023, the actual median household income was $74,580. In 50 years, the average household income increased only 1.2% on an inflation-adjusted basis, while the average new car price increased 80%!. Today the average American pays nearly twice as much for a car in real terms as a half-century ago, yet still earns the equivalent amount of money.
In typical fashion, Americans have turned to debt to solve this problem. We now owe $1.56 trillion in auto loans, nearly double from 10 years ago. With cars costing more and the average consumer not having more money to spend, auto lenders have lengthened their terms. Before the 1980’s, most auto loans were 36 months or less. In 2023, the average car loan is 72 months, and Tesla now offers 84-month loans on their new cars.
Increasing the length of a car loan has several harmful effects for the consumer. Longer terms typically mean higher interest rates, as the loans become riskier to the lender. Because the term is longer and the rate is higher, you pay significantly more over the life of the loan. Since cars are depreciating assets, longer loans lead to negative equity, which means you owe more than the car is worth. If you need to sell the vehicle, you will have to bring money to the table, and you may have to pay out of pocket if the car is totaled in an accident, even if you have full coverage. Finally, longer-term loans mean that it is more challenging to save/invest money. The average length of car ownership in the U.S. is 8.4 years or 100 months. If you pay a loan for 72-84 months, you will nearly always have a car payment, making it harder to lower your expenses and save money for retirement.
I believe the answer is to look to lower-priced cars. I personally bought a new Honda Civic for $30,000 cash last year despite being able to afford a luxury car. For those of us old enough to remember the 1980s and 90s, we know that the cheapest car today is safer, more powerful, and more fuel efficient than even the most expensive cars of our childhood. If you really love luxury cars and can pay cash, go right ahead. As I like to say, your money, your choice. But if you have to finance your automobile purchase, think twice or three times about how much you spend. The financial repercussions will live long past the thrill of your luxury car.
I think the most eye-opening part is that a 2015 RR at $80K before tax in 2016 dollars is roughly $103K before tax in 2024 dollars. (Per the CPI calculator at data.bls.gov) That’s very close to the asking price of a new one and shows that although that is a lot to spend on a vehicle, the price has kept up with inflation the past 8 years. Negotiating the same deal you did on the 2015 (roughly 75% of msrp) would land you at $78.5K for a 2023 RR. Not bad when looking at it through the same lens as in December 2016.
Used car prices have dropped significantly from the Covid highs. I check every now and then on KBB and get a carmax or carvana quote out of curiosity and the appreciation party is definitely over. Your estimate is probably a bit high. I’m seeing private party values for a 2015 RR, 52,000 miles, Autobiography Black LWB between $51K-$57K in very good condition. Trade in is about $5k less.
Close. The car was $80,000 after tax new in 2015, or $73K before tax. I was able to buy it from a private seller for $60K after tax. It was listed for $64,000 at the Audi dealer, or about $70,000 after tax in 2016 when I bought it off him directly.
Yes, inflation sneaks up on his! Which is why owning real estate is generally a good move. After 10 years, you start marveling how cheap it was 10 years ago,
Yeah, it’s definitely not chump change and I agree on real estate! I have to remind myself how much inflation affects prices.
One option is buying a vehicle through auction if you can get access to a dealer license. From the 80’s – mid 2010’s was a great time to buy quality used cars at auction. Bid a little bit above what dealers will and you’ve got a newer vehicle at a steal. I haven’t personally bought in about 5 years because how competitive it’s gotten with foreign buyers. Hung my hat in 2021 after Carmax offered $10K over my purchase price for a 2019 Mazda that was almost out of the warranty period.
Bought a new Toyota RAV4 “Adventure” – very snazzy for a basic car $40k. The Hybrid is also very nice looking. They are upgrading the RAV4 in 2025 and so far no one knows what it will look like. This better last me 20y, although my last Toyota was a lemon tranny died at 130k mi. Inflation is out of control for any industrial products – cars, building materials, etc. And I expect it will continue bc the world is changing as the boomers retire and die out. I just pray we don’t crash and burn like the gloom and doom set say is inevitable with all these gov’t debts and entitlements. Sam please do an article on that – would love to know your excellent perspective and analysis.
Sorry, for as hard as I work I like to drive luxury. Can’t stand the plastic interiors of Honda’s, Toyota’s, Subaru’s. etc. Just utter garbage. Doors creak, feel wafer-thin when you shut them, engines are weak unless you get a v8, etc.
I bought a Cadillac Escalade for $104k back in Oct ’23 for my daily driver. I’ve taken it on two 1400 mile trips and I have easily driven 10 hours without a sore back. Put it in super cruise and it drives itself (including lane changes). Comfort galore and plenty of gadgets and tech. High quality leather and love the dash layout. Plus 430hp is nice and the engine is solid.
Since I like to live debt free I paid it off 2 mos ago and will likely drive it for 10 years or 100k miles, whichever comes first. In another 12 mos I’m looking to buy a 911 for my weekend car…maybe Aston or McLaren. Haven’t decided.
One thing for sure, I’m 50 now and the last thing I want is to be 70 and sitting on a pile of cash but not healthy enough to truly enjoy it. I workout 6 days a week, but you never know what life will bring you as you age. So, I’d rather travel, live in a modest home, be debt free, and drive fast cars while I still can.
I like the attitude. I just can’t for the life of me spend money on a new car anymore given how quickly it depreciates for the first three years.
I also prefer to live in a really nice house and drive a beater versus drive a really nice car and live in a cheaper house.
Driving a new car or an expensive car gives me too much stress with regards to Ding’s and accidents in the city.
Makes sense. You have a wife and kids so a bigger house is a better use of funds. For me, I’m a single guy and my son lives with his Mother two states away. So, other than child support and trips to see him, my overhead is pretty low. Already have his college money set aside if he chooses to go. That or trade school.
I’ve always bought new cars for my wife and me, but mostly drove them 9+ years (bought 3 year old Hondas and Subarus for our kids and got 10+ year from those too). The only exception to that was a 2007 GMC Acadia that I dumped right after the bumper to bumper warranty expired – I loved the way that vehicle drove but it was always in the shop. Thanks to the GM Card points I used on the original purchase, I was able to trade it in without taking much of a bath on depreciation. I’ve otherwise bought 2 Nissans and 2 Hondas since the turn of the century – all have been great, reliable vehicles. My 2010 Nissan Murano is still going strong and only has about 82k miles on it. I mostly just commuted in it, so I only put about 6k a year on it. Now that I’m semi-retired and any work I do is from home, I’m probably putting 2-3k a year on it. The reality is that we could get by on one car, but it’s far more convenient to have 2. That said, I may sell the Murano to a family member soon. I’m having a hard time justifying to myself buying a new car to replace it, as it seems pointless to buy new for what might be a 2k/year mileage vehicle. Even though I can easily afford to do so, I’ll feel like an idiot if I buy a new car and only put 10k miles on it in 5 years. Also, there’s really nothing on the market that piques my interest right now – no interest in a luxury vehicle and the other mid-size 2-row CUVs I’ve driven don’t seem to ride or accelerate as well or better than my 14 year old Murano. So if I’m going to buy something I’m not excited about, I figure why not buy something with 30-40k miles on it? If I end up not liking it, I’ll be able to dump it without taking the butt-kicking I’d take on new car depreciation. There’s still not a lot of inventory in the used car market though, so finding the right vehicle could be a challenge. For now, I’m deciding not to decide until I have to decide.
Toyota is the way to go for crushing financial goals. I credit by ‘07 Camry for helping me pay off my $140k law school debt several years back. It was a safe, reliable, low-maintenence transportation appliance. I then drove a Subaru BRZ (poor man’s Porsche) for 6 years before buying my brand new 2019 Audi A5 Sportback. I paid cash for it and will drive it for at least another 6 years. Any future car purchase will be made based on a percentage of NW (this is even more motivation to increase it). Not having a car payment the past 10 years has been amazing. I’ll never have one again!
Yeah man, my 2013 Accord EX-L V6 (which they don’t make anymore) only has about 51k miles on it and still drives great. It’ll be 11 next month and I plan on keeping it for another 4-5 years as well. Enjoy your car!
Not sure who can afford those $100K, or more cars. A real millionaire today starts at 8 digits and of those few I know none drives these cars. Yes, a new car in the 40-60K range is the most I see but no extravaganza except one Range Rover under 90K. Cars you can buy in this range in popular makes: Honda, Ford, Toyota, Nissan, Hyundai, have most of the options luxury vehicles had 5-6 yrs ago. My wife complained when I bought an equivalent of monthly income and 0.5% of NW as an unnecessary splurge just before retirement even though after selling a 20-year old minivan we needed an 8-passenger SUV from time to time when our grandkids visit, or when we head north for the summer to haul the stuff.
Just like many people take a lot of pride and enjoyment in their home, others take a lot of pride and enjoyment in their vehicle and get a huge sense of satisfaction from something they spend a lot of hours in each month. Not to mention the safety benefits of new vehicles. So if your only goal in life is to accumulate as much wealth as possible, bragging about still driving a 2010 Camry probably feels good. But for many people, their is no balance in that and I would argue that they are missing out on the joys and features that modern vehicles provide. In the end, just maximize to Sam’s 1/10 rule and you’ll achieve balance based on your situation.
The best way to structure your life is to have NO car. Have not owned a car for over 20 years. But I rent one for, on average I guess, a couple of weeks a year, when we want to do a road trip somewhere. The improvement in lifestyle not having to deal with daily traffic and all the other hassles of owning a mobile-tin-can are huge. And then there is all the money working so much better for you as well. Embrace the no mobile-tin-can lifestyle!
How did you shuttle your kids to school and activities? Bus?
Today, I took my kids 24 miles south to go swimming. There is no way I could economically get down there and back in a reasonable amount of time.
I have lived in large cities that do not require a mobile-tin-can. I have lived in Singapore, Hong Kong, Sydney, Bangkok, Tokyo at various times. None require a mobile-tin-can for day to day living. I guess I am lucky that many places and countries outside of the USA have amazing public transport networks that do not necessite mobile-tin-can’s – unlike the USA where everything seems built around roads and mobile-tin-can’s. Right now we are in Japan – just last week we rented a car for 3 days and did a roadtrip in the countryside. It was fantastic. Really enjoyed the driving. But it was equally fantastic returning the mobile-tin-can and not having to worry about, or pay, for the stupid thing once again. Of course if we lived in some small country town somewhere we would probably have to get a mobile-tin-can – but one of many advantages of living in the (right) big city is not having a mobile-tin-can!
Our 06 Sport is still going strong. We ordered a 23 PHEV version 20 months ago and are still waiting…. Yours is basically new! Yeah they are insanely expensive…. Wife has never had a new car, so it is her splurge 5 years into retirement.
Good to hear! Let me know if there are any big upcoming maintenance issues I should be aware of. I’ve already changed the vacuum pump, water pump, PVC valve, and fan.
We have had good luck on repairs considering an 18 year old car . Just had the alternator and wiper motor go out. Some drainage issues lead to crazy electrical failures, but great help on the internet and could fix them myself. It is sad knowing a new one probably won’t be as good as the old one.
Happy Easter Sam- Like you, I love a nice high end sports / luxury car. I’ve owned Lexus, Porsche, Mercedes, Acura.
Every time I buy a nice extra car (that is not our daily driver), I end up selling it because we don’t use it enough. I had a Porsche 911 Carrera 4S which I loved, but every time I would go to drive it, the batteries would be dead. My Mercedes CL-500 was one of the best cars I owned. Same thing. We didn’t drive it enough to justify it.
Now I drive a 10 year old 2014 Toyota pick up with 160,000 miles on it. It will easily get to double that. I bought it used with 80k on the odometer for $32,000.00. Want to get real sticker shock? Go look at prices of pick ups. Some are over $100k.
And now when I get the urge to buy something exotic or very high end, I get on Turo and rent something for a day or two. I get the itch scratched for a few hundred bucks and return it.
It’s great not owing a dime on any cars, and making investments in assets that appreciate!
Robert
Yeah, going on Turo or renting a nice car for a weekend somewhere should help get the itch out. I’ve just never done it! Thanks for the reminder. Maybe I’ll do so next year for my birthday. That would be fun.
Hey Sam,
Might I suggest you look at Lexus? We own two, a GX460 which is a bulletproof reliable SUV truck (note the one I have is the model generation before the very newest one) and a RX hybrid. Both require zero addditonal repairs (knock wood) and just the basic maintenance. Which costs significantly less than the German brands. Yes it’s not as exciting or prestigious as a Porsche or Landrover, but I can rest assured it’ll last trouble-free for hundreds of thousands of miles.
Will check it out. Just saw a new Lexus LX 600 and it looked sweet. Thoughts?
I honestly don’t care about any prestige factor in a car. I just like how my Range Rover Sport looks. I think the KIA Telluride looks pretty nice too. For some reason, the Lexus designs don’t do it for me. But the LX 600 was nice.
Yep. Agreed. Really can’t go wrong with Lexus. LX is def just more cash. They also have a TX which is significantly less rugged and def more of a cruiser / family mover. It’s competely brand new so might not have the track record as some of the more established models. But Lexus service and reliability is so good that you shouldn’t have any issues at all.
Will do. Just saw a new Lexus LX 600 and it looked real nice. What do you think about the LX 600 vs. the GX460?
The LX is based on landcruiser 200 series. Very tough and reliable. But 30-40 grand more than GX. You cannot go wrong. Just more expensive.
Ah OK. I guess I’ll just have to test drive both! $30-$40K more than a GX seems like a lot if they are both great vehicles.
I sold my 2018 Chevy Equinox with 28k miles on it in Oct ‘23 for $18k which is the same price I paid for it in ‘21. It was in excellent condition. Good, comfortable, reliable, stress free, stealth wealth vehicle imo. But what I really was itching for was a nicer mid size SUV. So, after tons of reading the Audi Q5 and the Porsche Macan rose to the top for me based on a combination of price and quality. But they were just a little too small imo. I.e tight legroom in rear seats for passengers. As such, the Cayenne made more sense to me for size, but I wanted at least a Cayenne S if I went that route. The price was a big deterrent for me though. Just way more than I really wanted to spend. Then the 2024 Cayenne S popped up with a V8. $120k basically for the build I wanted. So I went to look. Test drove a used 2019 Cayenne S $59k and a used 2020 Macan GTS $70k for comparison. Loved the sportiness of the GTS but the Cayenne was more spacious and made more sense to me. After driving the 2019 Cayenne S, I bought it. Was happy with the low mileage, immaculate condition inside and out, 2 yr warranty, and 1/2 the coat of a new ‘24. Cost me my equinox + $40k. Definitely a big splurge for me, but I can afford it’s definitely way more fun to drive.
$59K is certainly more digestible than $120K! Enjoy your newish car.
Thanks Sam. Definitely enjoying it! For me, it hit the sweet spot of price/value with a splash of yolo. Longtime follower of yours. A thanks for doing what you do!
Great article Sam! My wife and I drive a 1997 Toyota Land Cruiser and a 1983 Porsche 911 SC, have owned both for ~ 25 years. The LC has ~ 290k miles, the Porsche ~ 130k… Both cars have appreciated nicely and plan to continue driving them. Both were bought used, the LC had 40k, Porsche 62k… Love them both and with continue to service and drive them on going. Everywhere we go someone is wanting to buy them :)
290K miles is impressive! Makes my 52K miles so far feel like a baby. Inspiring!
Sam I hope your RR Sport makes it to 10 years, and maybe more! They are notorious for having lots of issues, as I’m sure you’re aware. But you’re right, it’s more about maintenance than the make. I think your choice of Highlander for next vehicle is a great one! Can’t go wrong with a Honda or Toyota.
We had a 1998 Honda Civic that lasted 180,000 kms (108,000 miles) which was a couple years short of being 25 years old until a fender bender had the insurance company write it off.
Today we have a Toyota Camry Hybrid and a Honda Odyssey, both 2011. Again, I’ll try to hit 20+ years with them.
Gas is $2.03/L CAD ($5.65/G USD) here in Vancouver, Canada and while that’s astronomical (we’ve yet to hit forecasted peak) I can’t bring myself to spend $80K CAD ($60K USD) for an EV. That’s a lot of gas!
I hope it makes it to 10 years. That’s only 1 more year away!
The maintenance issues have been within the scope of expectations.
We bought a new RAV4 last year, (non-EV, non-CVT trans), we paid no markup but even that car was too expensive at 30k. Your post is great, spot on with how vehicles are a terrible investment. I have a 2001 Tundra (4.7 V8, best engine), and the kids share a fixed-up ‘13 Corolla I found for $500 from a tow-yard. It’s hard to avoid tempting sports cars but your posts help keep me focused!
Keep up the great work.
Cool beans. I was digging its competitor, the CR-V Sport. Looks pretty good!
The Grand Highlander with the Hybrid MAX drivetrain is the perfect vehicle for you and your family. Three rows, a perfected engine and drivetrain, great gas mileage, updated Safety Sense system 3.0, Digital Rearview mirror (a great update), Panoramic view in navigation, Blind Spot Monitoring with rear cross-traffic alert, Front and Rear Parking Assist With Automatic Braking, etc. etc. Man, I sound like a salesman. Anyway, Toyota Grand Highlander or Lexus TX is the way to go and you will get your money’s worth in the long run.
How much for them? Yes, look into car sales as a side gig!
For the 2024 Toyota Highlander Hybrid Ma Platinum – $57k to $64k depending upon options. These can be negotiated but I’m not sure in California. Just watch The Homework Guy on YouTube to learn how to negotiate better deals at dealerships, I mean Stealerships. LOL
Nice. Didn’t realize Toyota had the GRAND Highlander. Sounds perfect. But is it fun to drive?! I’d like the fun and soul too given I drive daily.
I’m surprised you put your desire for something different above safety. Seems like a Y would be a no brainer, especially with FSD improving.
No problem. Are you saying the other cars are not safe? If so, please share with me the study. We can do a lot to warn consumers that every other car besides the Tesla Y is safe. Thank you.
It’s more of a spectrum, but it’s best in class per the IIHS if you click into the detailed scores instead of just looking at the “Top Safety Pick +” rating. Pretty much anything else is “less safe”.
https://www.iihs.org/ratings/top-safety-picks?tspPlusOnly#award-winners
That checks out if you consider the story about a guy who deliberately drove his family off a ~250 foot cliff and they all survived.
That’s not even considering the safety enhancements from FSD, which apparently has gotten even better recently now with the v12.3 release.
Thanks for the link. Good to see the Kia Telluride there. I really like how that one looks.
The Model Y is fine. It’s just everywhere here in SF. I’d like to try something new. Or maybe if Tesla comes out with a new Y version or X in the future.
Our Highlander is 7 years old. I was thinking of a new one, but after reading this, I think I’ll hold off a few more years. I’d rather finish our basement and enjoy that space. I don’t drive enough to justify these prices.
Hi Sam, another great article 2 things I am very interested to see where used car prices go on these new vehicles with screens everywhere, batteries, etc it would be interesting to see how much car repair was 10 years ago on a five-year-old car versus the cost of repairs now with all this new technology. Also, I found my older vehicles that adding Apple CarPlay to where the existing stereo is can make your car feel 10 years newer! Happy Easter.
I’ve got my iPhone that is on a holder that has bluetooth to the car system. What’s nicer about Apple CarPlay? thanks
Repairing electronic gremlins is probably gonna be tough down the road.
I have never yet succumbed to the lure of a luxury vehicle. Instead we keep our vehicles for an avg of 10yrs, so I’m still driving my 2013 Ram 1500 with 170k on it. But it needs a new rear-end & both manifolds. It’s my real estate work truck that I Sect.179’d, as I have done with every truck I’ve owned. I’ll repair it ($5500 deductible) & keep it for the guys to use for dirty jobs on the properties.
I did however buy a 24 Tundra Platinum Hybrid ($65k) for heavy equipment towing etc. Again it was Sect. 179’d so it didn’t hurt as much.
We always pay cash for our vehicles (& properties), so I used the proceeds from the sale of a multi-unit property that we picked up cheap in foreclosure, (no-one else bid on it). It had since appreciated 120% without any rehab, plus it generated over 5 years of rental income averaging 28% ROI. I sold it privately to a fellow investor, so avoided that dreaded 6% RE commission you mentioned.
Given the recent surprise capital appreciation of properties, we decided to sell off 4 other long held rental properties to fellow investors. However, we hold all the notes @ 10-12% with 5-10 year balloons. Again all were sold privately, to investors we personally know, so we avoided any RE commissions & drawn out negotiations.
2024 Land Cruiser. Or 2024 lexus GX. Unbeatable based on historical value / effectiveness. Current 2016 GX owner. indestructible.
Agreed! GX is bulletproof! 2022 GX owner here.
Thoughts on the Lexus LX600 instead? Saw one in the club parking today and it looked nice.
I’m still driving my 2005 subaru legacy wagon with 216k miles. It still runs and looks great and is extremely reliable. Last year was the first time I had to do any major repairs besides regular maintenance. I replaced the head gasket. I’m hoping for 300k before getting a porsche 911 or cayman as my next vehicle.
I was looking at buying a $9000 2007 Convertible Camry yesterday, and I could not get myself to buy it. I drive a 2005 Camry and this was going to be my summer toy. I am in my 30s with a net worth of around $800k and I still think spending almost 10k on a car is too much! I don’t understand people who have car payments.
Have you ever read The Millionaire Next Door? You would like it if you haven’t. From that book, I’ve learned that the most common car owned by millionaires is a Ford 150. Now that’s definitely not luxury. Also, I know you don’t have a Japanese car, but in general, the useful life of a Japanese car is 150k miles. You should get 100k NP on your car.
I decided I wanted an electric car in 2021 because I was tired of stopping at gas stations at inconvenient times. After much research trying to convince myself not to get a Tesla I realized it would be foolish because it was just the best when I ran comparisons I Bought a Model Y and it is the greatest car I’ve ever had and I’ve had Porsche, Audi, Volvo,etc. No maintenance other than tire rotation and new tires. That saves me hours of wasted time. I am recharged in my own garage every day before work. The acceleration is instant compared to gas cars and it’s hard to go back to driving one at this point. I plan to replace my wife’s Volvo XC90 with a Cybertruck as soon as I can get one. Unfortunately my wife still has to stop for gas every 5 days and wait at the dealer for hours every 6-10 months. Plus all the usual things that can go wrong with gas cars, brake pads, timing belt, etc. are happening as we approach 100k miles. I have never encountered any of the bad things about electric vehicles you will hear about in the news. I think they must be referring to the non Tesla or Rivian electric cars.
We agree Eric! We bought a Tesla Model X 2 years ago and absolutely love it! He builds great cars for sure, we’ve had zero complaints as well…we even love the fart button. We especially love driving past expensive gas stations and we love not contributing to the dirty oil industry in our world- although we do own a GWagon and Sam is right, they are expensive but it was a treat when we sold our company a few years ago. Thanks again Sam for doing the hard research work!
Our car is 20 years old. It doesn’t have a lot of mileage on it though, only about 80k I think. As long as the repairs are less than the depreciation on a new car I think we will keep it. I’d only buy another second-hand non-luxury model to replace it as well. Clearly, we’re not into cars.
In 2011 I bought a new Toyota 4Runner (paid it off in a year). 13 years later, it now has 250K miles. Still runs great and I have had only minor repairs/replacement parts (new alternator at 180 K miles and replaced bearings in the wheels just recently). My mechanic says with routine maintenance reaching 400K without a major overhaul is a reasonable target. I plan to drive it until it croaks. No need to show off with a fancy new vehicle even though I can afford it. Everytime I see someone in a new and very expensive car, I think to myself, “those people must love working, because they won’t be able to retire early driving one of those things.” I am still focused on saving-investing aggressively to reach chubby FIRE, then I can call it quits.
When do you plan to call it quits?
I love the 4Runners from the late 1990s. The rich kids owned them! And I always wanted one.
Good to hear about 250K. At my rate of driving, that will take 45 years for me.
If based on an age, it would be in 3 years when I reach 50. If based on NW, I already have enough – but 68% of it is illiquid in real estate (primary and rentals). For psychological reasons (such as staying motivated to continue to work) I’d like to close the gap between the real estate:equity ratio. I’ve been saving 100% of my work income the past few years (thanks to rental income covering my living expense plus some) so I hope to increase my equity holdings to a target number I arbitrarily chose as a “good number.” Although I live below my means and have so for many years, I want enough saved/invested to live much bigger in retirement (e.g. frequent international travel) and not even think much about finances. It’s all about delayed gratification.
You Cali guys are killing me. Come live in upstate New York for a year and all visions of a luxury SUV go right out the window. Up here the only choice is a pickup truck or a Subaru. Once you drive down mountain for groceries in a snow storm behind a plow truck spraying rock salt the size of large pebbles, you’ll be glad you are driving an 8-year old Subi! (:>
We are also in Upstate NY & we went through a 2003 (200k) & a 2005 (170k) Sequoia neither had any mechanical issue, but both succumbed to rust perforation of the frames. The frames were ‘repaired’, but we decided to unload them. Unfortunately the 2014 Tundra barely averaged 12mpg, as did it’s 2022 Tundra replacement.
My holding period for a car is now 20 years. I only buy Toyota, Honda or Subaru vehicles because they are so reliable. Yes, I am a value guy.
Guilty pleasure .. I bought a new Tesla s last year… it’s less than 10% income but truthfully would still have bought it if it were not.. I really enjoy it
People in the subsidized apartment complex near my ($2 million) house drive more expensive cars than my 1986 Acura Integra (which I got from my parents 15 years ago) or my wife’s 2009 Toyota Prius. We’re comfortably retired and they are probably living paycheck to paycheck. In fact, I’ve only spent about $16,000 buying cars over my lifetime. That’s a lot of money saved (and invested).
Definitely easy to spend a lot of money on cars. But I would say the best majority of people drive a more expensive car than a 1986 Acura. :)
Timely article. We have two Fords with more than 150k miles. Never paid more than $20-25k for a vehicle, and never bought new, but thinking about pulling the trigger on a new $50k Hyundai Santa Fe Plug In Hybrid. Used cars just don’t offer the same deals they used to. $50k certainly feels like luxury to me but the used cars are over $40k. To me it feels like a balance of trying to achieve the most utility purpose, safety, and a few fancy features (wireless phone chargers, sunroof, etc) without breaching into the strictly status costs.
Our net worth is $2 million so we would still fall below the 1/10 rule you have, which feels good.
Where can I read about this 1/10 rule? I didn’t see it in this article. I have read that you should buy a car that is no more than 1 percent of your NW.
I think I was mistaken here. Sam has the 1/10 rule for annual income, and the 5% of net worth:
https://www.financialsamurai.com/net-worth-rule-for-car-buying-guideline/
Easy to be good at the math of car buying. Not so easy to ask ourselves why we want something “different” from what everyone else has.
Pure utilitarianism is no fun but consumerism and lifestyle creep are dangerous to your financial future. Needs first, wants second…delayed gratification is a virtue.
Hi Sam,
Great post as always.
Something to be aware of… I had a 2012 Range Rover Sport bought new and recently sold at 11yrs w/66k miles and zero issues. Land rover stops manufacturing many parts on vehicles at the 10yr mark (probably to push owners to newer vehicles) so if something requires replacement (e.g., solinoid in shifter box etc.) you will be forced to look at aftermarket providers and may be hard to find what you need. Hope you find useful and good luck with the RR!
Thanks for the heads up! I’m OK with mom, Land Rover aftermarket parts. Actually, I prefer them as they are cheap.
What did you end up buying?
2017 911 cab with 8k miles which i traded the RR in for. I use a Mazda CX5 as a daily driver which ive been very happy with.
Certified Pre Owned is the best value. If you don’t care about the brand, the non-luxury brands are closer in features to the luxuries than ever. Check out the Mazda CX90 plug-in hybrid, for example.
Have you looked into a used Lexus GX460? A 4-5 year old used model can be had for under 40k and the suv will probably outlast you. Easy 200+ miles on it with repairs being much more affordable than a BMW or Mercedes.
Ha another GX460 Comment.
Sam, your readers are onto something here. And me… I researched for a year on the GX460 before finally pulling the trigger on one in 2020.
How much did you pay?
MSRP I believe was 56K and it was listed at 54k. Out the door with title/tax/fees was 57.3K (just checked my final invoice). Fortunately I purchased at end of 2020, right before I think car prices got out of control. I could have sold it for a profit a few / several months later.
I actually also traded in a German SUV that had hit 50K miles. A 2018 VW Atlas.
The GX is rugged (like a Landrover), has enough luxury, and built on the Landcruiser frame. Hence over engineered and good for 500K I bet. I have heard some pushing in the several hundred K miles on various GX forums. There’s a huge aftermarket off-road enthusiast community for it, GXOR. People rig them out nicely for all sorts of crazy terrain travel / rock crawling / camping / etc. way more truck than I need.
Outside the USA, the GX460 is sold as the Landcruiser Prado.
I bought it as the SUV I plan to keep forever. Gas mileage highway is 20-22mpg, mixed driving for us (we live in a city) is 14mpg. Not great but we drive very little, 6-8K annually. Mostly local trips and a few road trips. This is for a family of 5, and having the additional 3rd row works great so up to 7 people. Just be forewarned there is zero cargo space if you utilize the 3rd row.
I basically traded in my VW Atlas (bigger space) for this GX because I hit the mileage warranty and while I didn’t have any issues with the Atlas, I wanted a truck that would last forever.
Oh right. The Atlas had all sorts of creaks and rattles. Highway driving was fine but any slightly rough pavement and the inside parts noise drove me nuts. It felt like it was built out of tin. I purchased all sorts of felt and vibration dampening kits trying to stop the noise. At the time I commuted 60 miles a day (pre covid) so having a quiet cabin was important to my peace of mind!
Yes, a quiet cabin sounds like a must have!
Just saw a new Lexus LX 600 and it looked real nice. What do you think about the LX 600 vs. the GX460?
The VW Atlas never spoke to me.
You should checkout Rivian electric SUV R1S.. perfect for families, luxurious compared to Teslas, and they have amazing deals going on. You should be able to get one at 75k$ and lease options are even sweeter with the 7.5k$ federal tax credit.
Are Rivian owners concerned that the company might not be around in 5-10 years? They lose over $32.5K for every vehicle they sell. If so, what happens to obtaining replacement parts and who will be trained for repairs on those vehicles?
Have your car professionally detailed once or twice a year and you’ll feel better about it.
There’s a reason the Taliban dives Toyotas. They’re designed to last several decades in a Third World country. They’re indestructible. My Lexus LX has almost 200,000 miles on it and 14 years old. It scream down the road. It’s good for 500,000 miles from what I understand. Quit worrying about status and go with function. Lexus also has luxury.
Bought a 2020 Honda CRV EXL Hybrid in February 2021. The extras in this package (leather seats, added technology) are exceptional and I could not be more pleased. Honda is known for quality, reliability and value. Could I buy an expensive luxury car? Yes, but why? To show off? I’ll take practical reliability.
Section 179 tax deductions, buying vehicles over 6000lbs (large SUV’s) and deducting them in their entirety in one year, against 1099 income, is the way to buy vehicles, if you can pull it off. It’s a real estate agent staple. Both of our luxury vehicles were bought this way (pre-covid) using my consulting business.
Last fall I bought a used, ’21 Volvo XC90 top trim (Inscription) with 27k miles on it for 41k from a local Land Rover dealership. The sticker and original sales paperwork were still in the glovebox, which showed an original msrp/sale of 69K from its transaction two years prior. Thus, the original owner took at least a 30k hit over a two year period (I’m assuming they traded it in for less than 39k.)
The car was a 9.5 out of 10 inside and out and basically looked brand new, and my kids put more wear and tear on the car in the first few months alone than the previous owner did over their two years of ownership. With that in mind, I seriously doubt I’ll ever buy new again.
Lastly, when completing the sale (I paid cash), the finance manager commented that, in his experience, the majority of Volvo buyers pay cash while the overwhelming majority of Land Rover buyers finance. Thus, he wasn’t surprised when I pulled out my checkbook instead of asking about interest rates, monthly payment, etc.
YES!! After looking at Mercedes, BMW, and Audi, I bought a 2023 Volvo XC90. I was amazed by the luxury inside…so much better than Mercedes.
It is seriously the best car for our family. We have 3 row option with the built in booster seat in the middle.
We live in Anchorage and the Volvo is the GOAT in snowy weather.
Paid $73k in cash last February with no regrets.
Another vote for XC90. Bought one last December. Bought new cause we like new and can afford the splurge. Price of this model is less ridiculous than the cars Sam looked at.
The problem with used cars, as I’m now finding, is that you eventually hit the Weibull curve (of failure) and it costs about the same to keep an old car going as it does to own a new one. My car is almost 20 years old and while I was going to replace it in 2020, I couldn’t for obvious reasons. Now, I only need a car for another four years after which I will be moving abroad, but it is getting more expensive to keep my beater going. But it seems equally silly to buy even a used car if I’m only going to keep it for four years. It’s a tough decision.
What type of car do you own and what are the expected upcoming costs for what?
Tough choice indeed for only 4 more years. 20-24 years is a great holding period!
Honda Civic Hybrid. Gone through three windshields, four batterypacks (three covered by warranty), four sets of tires and I can’t remember what else. At the moment, it seems stable and has < 160,000 miles. So it might last a few more years. We'll see.
Totally agree with the comment. My wife had an Audi Q3 that run smoothly and required zero maintenance until it passed the 50k miles on the warranty. After that, the cost of repairs was the same as leasing a new vehicle. Since we had bought the car and she was driving about 10k miles per year, we tried to hang on it for a few more years hoping that the streak of repairs would stop but eventually we had to give up and buy a new car because there was no point on paying a few thousands every 4-6 months when we could have had a new car. The dealer told me that once the German cars are outside the warranty period, it’s time to trade them in.
I had a 2010 Audi Q5 which started having problems around 60,000 miles. I eventually traded it in at around 80,000 miles for a 2014 diesel Mercedes ML350. Unfortunately, the Mercedes also started deteriorating at around 80,000 miles, so I traded it in last year for a 2023 Lexus ES300h. I have no regrets about the Lexus and am getting great mileage – averaging 42+ MPG in city/highway driving around town and about 40+ on road trips going 70 to 80 miles per hour.
What type of problems specifically for the Audi and MB? I’m at 52,500 miles for my RRS. I figure if I’m changing these parts to new, they should last another 30-50K no?
Well, my memory of the Audi problems has faded; however, as I can recollect I just had a bad feeling. It was starting to run rough and I loved that 3.2 liter V-6 engine.
The Mercedes had three large problems: First, the O-Ring in the emissions charging tube split spewing oil all over the engine compartment. It cost me $2,000 in small parts and mostly 14 hours of labor charges.
Second, the turbo seals leaked plus some other seals close to the turbo, which cost me $1,500 small parts and mostly labor charges.
Lastly, the Oil Filter holder seal at the bottom leaked which cost $500 small seal and mostly labor, which included finding the leak.
And, this was at my Independent garage that only works on European cars.
The dealer wanted $4,500 just to fix the first leak.
In addition, I had to replace the secondary car battery, yes the Mercedes has a secondary car battery, in the right-side back quarter panel inside the car. That cost me $400 for parts & labor at the dealer. If that battery goes out you can’t start the car.
All of this within one year not counting $1,100 for new Michelin tires. She had to go, I just couldn’t stand that she was falling apart and I loved that diesel SUV, which got 28 MPG on the highway.
Ah, the auxiliary battery! I just got a quote for $400 to replace it. As far as I can tell, it just controls the annoying start/auto stop engine function. Worth replacing? Hmm
But those leaks of tubes and seals are a bummer. They will get me too as my coolant reservoir ran low after 9 months. I hope it’s not something serious and seven dollar top off is good enough.
The thing I think about is, if we replace all the parts, then all the parts are new and should last for a long time more.
The Grand Highlander Platinum is the ticket for you and your family, hands down.
Alrighty, will check it out for a test drive. It needs some soul though and some pep because for the amount of driving I do, I’d like it to be fun too!
The Hybrid Max drivetrain is a beast!
“The Max adds another wrinkle – turbocharging. Yep, a turbo atop a hybrid. This gives 362 total system horsepower on a Max, over the 245hp on the typical hybrid. A healthy 400 lb-ft of torque is on tap, giving the Hybrid Max a 5,000 towing capacity, versus 3,500 for the usual hybrid.” Jan 23, 2024
I completely agree. And that’s why after trying everything out there, I ended up with a fully-loaded Genesis. Feels like a Bentley for under $70k and good for stealth wealth when every car in my area is an iX or Macan.
Genesis looks nice and so does the KIA Telluride.
I like the BMW iX too. But the cost. I’ll probably just test drive them all and see if the drive changes my mind. Doubtful.
Good analysis. Given your desire to own cars for longer durations, you’re picking the wrong luxury brands in my opinion. 0-4 years, go with Audi, Mercedes, BMW, Land Rover, Porsche. If you’re gonna keep it 4+ years, go with Lexus or Acura. Much better in the long run (cost wise). I love my 2011 Lexus GX with 105k miles… it’s like driving a Toyota with makeup.
What was your experience driving and owning an Audi, Mercedes, BMW, Land Rover, Porsche like? What problems did you encounter at what costs? Thanks
Had a 2005 X5 4.8 from 2007 – 2017. It was a CPO car and I took very good care of it. By the end (after warranty), some of the big repairs cost more than the car was worth. 10 years of an X5 vs. 7.5 years of the Lexus GX and the X5 was about 2-4x as much to maintain per year.
Good to know. Can you recall what some of the repair costs were that were so expensive and how much?
I am one of the people buying those cars. I just bought my wife/ daughter a new range rover autobiography sv. I like the larger front seat for myself with my daughter’s car seat in the rear. I’ve always enjoyed cars though, when I was 25, years old, the company I worked for bought me a 5 year old used s65 for 50k. Overall I’ve been relatively frugal with a lot of aspects most of my life and still am in some measures. My wife and I didn’t add more than 2 cars to our garage until we were making seven figures. Both of them at that time were our work trucks.
A few years ago after we sold our company, we had 8 cars for a short period of time. It made no sense with only 2 drivers and no unique uses. Now we have 4 with another new one on order which is still too many in some peoples eyes. But I rationalize it, each is different and serves a purpose.. They are only 2% of our net worth and are all paid off.
Personally I’ve always enjoyed nice cars and I definitely fall into the yolo crowd here. But I also acknowledge we are very blessed. What net worth for a retired person makes sense to buy that range rover?
How much did you pay for the new RR? At a high net worth ($10+ million), I can’t imagine paying more than 1% of one’s net worth for a car. So perhaps that’s my limit.
What type of business did you guys sell? 8 cars at once is a lot!
250k for the RR, in the last few years we haven’t held on to cars for very long. But we plan to have it as our family car for the next several years, there isn’t really anything left to upgrade too, we weren’t a fan of a Cullinan. All of our vehicles are less than 1% of our net worth individually. Together they equal more, but I also don’t like to count our rolled equity in our net worth because I feel like that is another lotto ticket in some ways.
We sold a construction business. It was a wild experience, invested in it initially, ended up splitting off and running it. My undergrad in finance and I have a masters in accounting. Goal was to work in banking, only lasted 6 months before being laid off in 2008. My wife has a masters in health care administration and used to work in corporate health. I started working in the business a couple years before covid, but my wife joined when the pandemic hit and we scaled a company faster than PE companies normally see. 70m in 5 years.
Friday was my last official day of full time employment. Honestly I haven’t really worked hard since the summer and have been cutting myself down to a few hours a week. My wife hasn’t worked full time since we had our daughter a year ago. I guess you could say we are retired at 37 and 35 years old. I remember reading your blog over 10 years ago and thinking it was pretty amazing what you did. Now here sit having done something similar and I still don’t beleive it sometimes. We are very blessed.
I don’t think I will stay retired, but for the rest of the year, I am going to chill and do some planning. From a long time follower I really appreciate you sharing your thoughts in your blog. It is by far my favorite.
Good stuff and congrats! When you wrote 250K, I initially thought 250K miles. Then I realized you meant $250,000 for the Range Rover! Is that right? Anyhoo, if you can afford it, more power to you.
Here in the city, cars get dinged all the time. I’m enjoying driving an older and cheaper car the older I get. Less stressful.
Oh wow those prices are ridiculously high. I haven’t been to a car dealership in many years so I’m just as shocked as you. I’ve never owned a luxury car and definitely won’t in the future with those kinds of prices. Ouch!
That TikTok video is shocking too how much people are spending on cars that they are probably going into debt trying to afford. Not a good way to build wealth at all. It’s counterproductive to spend that much. Hopefully they’ll realize the err in their ways soon!
I think Audi/BMW remains somewhat reasonable in the luxury end. I am a huge Audi fan and the A6 sedan and Q7 SUV are about 60k. I have found them so reliable with hardly any significant maintenance issues for at least 5-7 years and their service impeccable. I have mostly driven cheaper cars but we have a used Q5 and extended family has had them and really been good .
I totally agree staying away from luxury cars during formative financial years is a huge plus and encourage my 20s age kids to avoid it. But I feel like buying luxury cars is mostly about where you are in your financial journey. I have no significant financial savings milestones remaining. Kids college payments done, plenty of retirement savings and still working and plenty of free cash flow. I’ve reached my financial goals and have scrimped on cars my whole life. One of my ways to treat myself and practice “deaccumulation” is to buy myself a toy – maybe a car or a boat. I’m a proponent of not dying with more than I retire with…
Would also like to hear what you think of the stock market. pretty much straight from 3800 to 5200 driven by so-called “AI revolution”. bubble? real in terms of company profits? Your in the hotbed of AI – what are you hearing? I see are looking to buy more treasuries and real estate investments. What kind of pullback would make the market attractive to you?
Ash, I agree about Audis. I’m 38 and about $200k income, now with my husband who is finishing his medical residency. We just got a 2019 audi a3 with 40,000 miles for $19,000 (in Mexico). The 10% rule is great. But, we completely love love love the motor driving feel and reliability of the audi. I bought a 2007 audi a4 convertible in 2016 for $10,000, (a little more than 10% of my income then, but I caught up by 2018) but, my ex bf ran it into the ground through horrible maintenace. The motor was still amazing when I gifted it to my handyman last year. Used and well- maintained luxury could be the way to go.
“ But I feel like buying luxury cars is mostly about where you are in your financial journey. I have no significant financial savings milestones remaining. Kids college payments done, plenty of retirement savings and still working and plenty of free cash flow.”
Good point. What else is there to save / spend money on is interesting once the kids are taken care of, retirement is good, and home is paid off. Are you still working or retired?
If still working, what about retiring and doing something new now that you don’t have anymore expenses? Freedom is pretty amazing.
The AI mania is everywhere here in San Francisco. And I think it’s going to be a 10+ your trend. As a result, I’m trying to hold and buy as many single-family homes as possible on the west side. There will be boom and busts, but I think the direction is up and to the right for the next 10+ years.
I am still “working” but only when I want to. I own a business. Took me 20 years of hard work to get to this point and now very lucrative and seems dumb to step away when I still enjoy it.
I guess semi-retired…I do many other things and basically feel retired. Golf many days and alot of international travel. I am constantly doing something new. Just got very involved in a county volunteer organization for children caught in the judicial system.
As you learned, most of us never really retire completely in the sense of doing nothing. You are “going back to work” but have been working in some fashion since leaving your finance job.
My wife and I are thinking of moving to Portugal when I do officially leave my business – 3-4 more years.
Defender P400 Dynamic. I’m personally looking at that being best choice for luxury SUV for me. Good resale value too. Went from RR big one to a 4 Runner and although much cheaper feels cheaper and less safe. What is safety worth? One Caveat on Defender is the options get you close to 100k quick. Get the Sport if you don’t like rear door sideways opening access as both are very nice. My RR lasted 12 years and 130k miles so you should be good for another 2-5 years.