Aside from the purchase of a home, or certain appliances, a car is one of the larger purchases people make. And from a financial perspective, a car is not an investment, since its value decreases as soon as it is purchased. For this reason, it's a personal goal of mine to pay for any cars I buy in full-- it doesn't make since to continually pay for a depreciating asset.
I will say, though, that I'm drooling over all the new cars my recently graduated friends are buying. A set a wheels-- so much more than just a means of transportation, a car means freedom. I'm choosing not to buy a car next year, and putting off the purchase (of both a car and a dog) for at least a year, until I see how life comes together. I'm consciously looking at apartment buildings within walking distance of my work and the metro, so I'll be able to get around easily. Arlington is very walkable: there are restaurants, a grocery store, and a mall within blocks of where I'll be living. But still, with no car, there will be no trips to Costco, Trader Joe's, Ikea, skiing, certain hiking.
However, I feel that in my personal situation, with a great metro system to use, with a carefully chosen apartment location, I can survive without a car. I'll save a lot of money, and I hope that in my first year in DC, I will be more than willing to shlep around, bike, walk, and take the metro. But still, I so admire my friends' new shiny cars :)
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It makes sense to continuously pay for a depreciating asset if there is a substantial inflation (which there is and will be) and if the money is depreciating (which it does), while your payment remains constant over time (which I believe how mortgages and such work). At the same time you get to USE the asset. But yes, buying things costs money. Having said this, you can probably get away without a car in DC and it will save you couple thousand per year.
ReplyDeleteGood point, thanks for the comment!
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