Piece of Crap Car

Piece of Crap Car

I have a new focus on dumb news. My new analyst, Joe Jones, spends an hour or two a day searching for the best in dumb news. I also think that USA Today is the best newspaper in the world. There is wisdom in idiocy.

I was unhappily scrolling through Facebook the other day and saw that one of my smart friends had posted a dumb article about the excellent Toronto Raptors basketball player who, despite making nearly a hundred million dollars, still drives a 20-year-old beater SUV.

He said of the car: “It runs… and it’s paid off.”

The second part of that statement is crucial. There is nothing better than a paid-off car. There is no monthly payment, and most of the depreciation has already occurred. You are driving for free.

I have to say that even I am not as disciplined as Kawhi Leonard. I had my last car for 7 years and about 135,000 miles when I started getting a hankering for new car smell. Much to my disappointment, the sound system in Newcar was worse than the one in Oldcar. If only there was a way to get a car with a Funktion One sound system.

Anyway, Leonard’s level of frugality is seldom seen in the NBA—or anywhere in professional sports, for that matter. I had a friend of a friend who played college hoops and made it to the NBA. He said that the players would buy a new suit for every day they were on the road. 41 road games, 41 suits. They would wear them once, and never wear them again. Given the size of the basketball players, these were bespoke suits and not off the rack. Conservatively, that’s about $100,000 worth of suits. A year. And so it goes.

In this column, I’ve tried to give people a pretty big dose of perspective. $3 on coffee every day is a luxury you can afford, and people seem to have an easier time giving up large luxuries than small luxuries. Most people would rather drive a piece of crap car than give up the morning coffee. Tell people to give up coffee (as Suze Orman does) and you will alienate the people you are trying to help.

So for starters, don’t buy 41 suits a year. But don’t buy a $10 juice every day, either. And don’t go out to eat three times a week. And don’t stay in $300-$400 hotels when you travel. All basic stuff. But the easiest way to save money, hands down, is to drive a piece of crap car.


Unless you are driving a Ferrari, a car is not an investment. A car is basically a huge waste of money. Where else can you take $40,000 and set it on fire in 7 years? And pay a bunch of interest to the bank in the process? What a disaster.

Funny thing about cars—people’s egos are really tied up in the brand of the car. People like to say they drive a “Benz” or a “Beamer.” Puke. I drive a Toyota. They never break down, and they last forever. They’re a great car to own that is paid for.

I saw something the other day that I never thought I would see. A green Lambo—parked outside the Social Security office in Myrtle Beach. My analyst and I staked it out to see who the owner was. A 90-year-old man came out of the Social Security office, got in the car, and revved the engine while people took pictures. I suppose if you are 90, you can have a green Lambo. This makes sense for nobody else in Myrtle Beach.

I also spend a lot of time in Miami Beach, a town where having a Porsche is like having a Honda. I get the sense that a lot of people who own those cars literally have no other possessions. It is all about priorities.

Recurring Theme

The takeaway here is that your financial well-being, as I’ve said before, is not the product of a million small decisions, but two or three big decisions. A car can bankrupt you. Or you may get to watch helplessly as it gets towed out of your driveway. And don’t get me started on leasing, the extended warranty of auto finance.

I have had conversations with car salesmen. They all say the same thing: “I can get you in that car.” They are pretty creative, financially speaking, and will find some way to make the sale, even if it puts you in a perilous financial position. That is not their concern. Their concern is selling cars. The ideal scenario: get a gently used Toyota, pay cash, drive it forever. You win the personal finance game.

You should have $1,000,000 before you buy a new Beamer or a Benz.

Death Metal

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There is a lot of talk that we have already passed “peak car” in the US. With my personal finance hat on, I don’t think that’s a bad thing, on an individual level. Car sales are dropping, which implies fewer people are messing their finances up for a status car? Great!

With my trader’s hat on, it’s not such great news. Declining auto sales are a leading indicator for a recession. Yes, there are other factors at play here—Uber, the specter of electric, trade wars, car-averse Millennials—but it’s been a fairly reliable indicator in the past and shouldn’t be ignored.

Just another reason to register for Robert Ross’s “Any-Weather Income Strategy Summit.” He’s going to be talking about why he believes a recession is on the way, what it means for investors, and what sectors are going to perform best. June 24, don’t miss it. Register (for free) here.

Jared Dillian


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June 22, 2019, 6:05 a.m.

I think some here (and on Facebook) are missing the point of the writing. If you have the means to buy a new car free and clear and it fits your lifestyle this advise isn’t for you. Myself, I can’t walk into a dealer and lay down 40-60k so my 2-3yr old cars which I can pay off in a year suit me fine. (Although I am nearing a point where that 1yr is eroding to zero.)
Jared, thanks for the sound advise, but I think many reading already have either the fiscal responsibility and/or understanding of the money pit vehicles can be. 
I love the letters, they are good reminders of the ways personal finance is “personal” and to always be accountable for your own fiscal status.

Keep em coming…

June 17, 2019, 2:36 p.m.

Back in the ‘90’s, my neighbor at the time told me of a financial advisor comment he’d heard on a Saturday radio show.  The analyst was espousing the evil that is debt and said we ought pay cash for everything. The show host said yes, but we need to borrow for some purchases, such as a house and cars.  The analyst replied (paraphrasing), “A house, I suppose, but when it comes to cars, I’m afraid too many people are driving away from the American dream.”  Well said.

June 14, 2019, 12:43 p.m.

I used to keep cards until the wheels were ready to fall off. My wife drove an Avalon that was 17 years old and I had a Camry that destructed after 13 years and before an Infiniti that got to 230,000 miles. Now we lease - much more dependable and with up to date safety features. Yes higher cost but reliable and much safer. No more AAA calls.

Keith Crotz
June 13, 2019, 8:02 p.m.

Yep, have a 2003 Chevy S-10.  81K miles.  Just had the driver door re-hung….. now there’s little noise and feels new again!

Jim Johnson 34645
June 13, 2019, 7:23 p.m.

We drove the also drove the wheels of our cars.  We have only purchased 3 new autos in the past 50 years and lots of used autos and pickups and airplanes. 
Two other things that really cost over time, are booze and smokes.  My sophomore year in college I counted up the checks I wrote for hooch—over $1000 in 1968.  That’s is about $3k these days.  i did get over it. 
However, for all my smarts (?) I did own two airplanes, then got smart and rented them for 30 years.  The docs don’t let me fly any more.  But from 1970 for about 30 years that was the only way to travel!

I Enjoy your wisdom.  Indeed I learned big lessons about money in the army.  Art museums are cheaper than the booze joints (I was in France) and attract lots of females.

Jim Johnson
Greenfield Mo

Liz deForest
June 13, 2019, 4:41 p.m.

I did the math on new versus used cars.  On cars with good resale like Toyotas the cost per mile is the same on the new and old miles.  My most recent cars after we drove the wheels off the old ones are a Subaru Legacy and a base model standard transmission Toyota Tacoma.  We should get a minimum of 200,000 miles off each car and they are guaranteed to be well serviced.  I cannot keep up with our well off neighbor who still drives a wood paneled station wagon and owns 2 others for parts.  Her husband drives a Subaru Baja.  I do not live in a cheap neighborhood, I saw a Masarati recently.  I also see Teslas and such, but overall there are lots of CF’s on my street.  I still won’t buy the $3 drinks and am happily cheap, my big luxury is paying someone to clean my house and I don’t skimp on appliances or contractors.

Lee Irvine
June 13, 2019, 1:41 p.m.

The last thing I ever want is car trouble or tire trouble. And I want a nice, safe car. I put up with crap all my life, so now I don’t have to. But I had to for a long time.

June 13, 2019, 12:24 p.m.

Hi Jared, I like your comments on this issue. I would also say that auto companies would not be very happy to read this material. I am seventy eight years young and started driving at twenty, to this day I have purchase five new or used four cars in this lifetime. I loved the old cars of yesteryear when you could fix them just about anywhere when it became silent. Now I am not so capable as I used to be and motorcars have become impossible to fix in the back yard, but they do last longer if you take them to the dealership regularly as required, it does become expensive transportation. By the way my first car was a Austin Healy three thousand.

June 13, 2019, 12:16 p.m.

Jared, i agree and disagree with your car thesis.
Have you always driven a Toyota ?
If you have and that New car you speak of being a gently used is your second Toyota, I will agree you have won the car war.
I have wasted so much money on cars, and I have only purchased one new car in my life (in the last 40 years). The others all used.
Used cars break, even Toyotas and Hondas. That costs you money and time. With the second more valuable in my opinion.
Two years ago I finally woke up & decided no more depreciating purchases. I lease a 2016 Toyota SE for $195.97/month, all maintenance included (shouldn’t be any right? Well there are still oil changes tire rotations and a large one at 30,000 miles.  I did the math and I saved 40% on the normal cost of these done at a dealer.
In just over one year I will do a little car shopping online as I did with this one (didn’t spend one minute at the dealership until I agreed on the terms, all done via 4 text messages) and lease my next vehicle. Can I buy one of those other ridiculous cars? Of course but that’s stupid because I have 3 colleges to pay for that will give me a better ROI when I need someone to change my diapers in 40 years. Plus I get a new car every three years, my only cost is gas plus the $195.97/month. Pretty solid in my opinion.

June 13, 2019, 12:08 p.m.

Clue us in Jared, what’s the point of having a lot of money if you choose to live like a pauper?  I will die with substantial assets. I’m 68 and enjoying some of those assets.  I drive a Challenger Hellcat (absurdly expensive and fun), a Ford Flex (works well for road trips), a Dodge Pick-up (for hot-air ballooning), a 15 passenger van (for hot-air ballooning) and my wife drives her Buick. I also have a 48 Chry Cpe and a 49 Chevy truck.  I have 4 hot air balloons, all for fun, no paid rides.

The point is, the value of money is the enjoyment it brings.  Numbers in a ledger are nice but at some point, I want more.

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