Why Drive a Beater?

It has a grill only a mother could love.

“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 which 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.

Allow me to name the ways that, O Hoopty, I love thee. – Click to Tweet

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.

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  • 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?

    The equation above

  • I’d rather tie up that money in either investments or in 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, 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.

Do you drive a hoopty? Does it have a name? Tell us your hoopty love stories in the comments below!

About Jason Hull, CFP®

Jason Hull, CFP®, is the Chief Technology officer of myFinancialAnswers, an online comprehensive financial planning service.