New Cars Are For Poor People

It's always the same situation. You see a new car go down the road. You see another poor person.

by Quinton Figueroa on August 26th, 2011

Below average trying to be above average

People with new cars aren't fooling anybody: they're making payments and they're poor. I just can't seem to comprehend why people think it is so important to drive a new car. It makes no sense whatsoever.

Most new cars people drive usually cost around $20 - $30k. But people don't BUY new cars -- they lease them or make payments on them. And with new cars comes full insurance coverage. So when people buy new cars they are really making payments and then paying another $100+/mo for insurance. Moreover, as soon as you drive a new car off the lot it drops at least 10 - 20% in value. Every way you look at driving a new car is a loss. Does this sound like something a rich person would do?

But for some reason people still think that a new car is a sign of being successful, special, intelligent or rich. It means none of these things. When I see somebody driving a new car I immediately know they are poor. I know this because most people are poor. And if everybody is driving new cars then these people are poor. If you're like most people you're not special. Most people make payments on cars they can't afford. Congratulations, you're average making below average decisions. Everybody on the road also has a new car that they can't afford. Way to stand out and be different.

Now sure, there are a few people who might buy a Ferrari or Rolls Royce cash who aren't poor. I'm not talking about these people. I'm talking about the serfs who drive bank-owned property thinking they are special -- the people who get the ego boost doing what everyone else is doing thinking they are unique. Way to go guys. You might fool the other poor people but you don't fool me.

 Filed under: Misc, Cars, Poor

About The Author

Quinton Figueroa

Quinton Figueroa

Los Angeles, CA

I am an entrepreneur at heart. Throughout my whole life I have enjoyed building real businesses by solving real problems. Business is life itself. My goal with businesses is to help move the human ...

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112 Comments

Trey: Yep, it's ridiculous. When I

Yep, it's ridiculous. When I see someone with a new mid-range BMW 5-series, I immediately know that's a person making below average decisions. If he could actually afford a new car, he would have gone for top of the range - or a 7-series. My rich uncle (yes, really) hasn't bought a new car in his life - secondhand one year old quality cars are good enough for him, and he saves a major amount as compared to buying a new car. But that's what rich people do. Is that why they are rich in the first place, perhaps?

Quinton Figueroa: Yep, you're right. They
@Trey (view comment)

Yep, you're right. They always go for the 3 series or 5 series because they're entry level. Or they go for the C300 Benz. And it's funny if you think about it.

If they really had 30 or 40k cash they could skip the 3 series and just buy a few year old S550, A8 or 7 Series with low miles for about the same price. But they can't because they're poor and can only afford entry level new vehicles with payments.

Jamie: An A8 or 7 series are both

An A8 or 7 series are both huge cars and not necessarily sporty. Wouldn't want either one for driving fun compared at an A4 or 340i which are half the price. More expensive doesn't equal better.

Ivan Stovall: 7 series is like a Suburban
@Jamie (view comment)

Yup, any 7 series is like driving a Suburban or bus in a luxury car....lol. Please I rather drive an older sporty 550i, in which I do.....

TorontoStudent: Not true

I don't agree with the fact that those who buy entry level luxury cars are "poor." I'm a full time university student working part time at a strip club. I paid off 60k in student loans and bought a 15k Honda Accord Coupe in ONE year. I've been looking around for a C300 Benz. Do you think I'm poor? I can buy the Benz, cash, and I don't want to spend more money on a more expensive car like a Maserati, which I definitely can afford. I just think it's a waste of money (all new cars are a waste of money, but I'd rather waste 40k on a Benz than 75k on an entry level Maserati). Yes, buying a new car is a complete waste of money. But no, not everyone who drives an entry level luxury car is poor.

I've met many successful men in my industry and this is definitely not the case, so don't judge. It sounds ridiculous.

FedGuy316: So wait...
@TorontoStudent (view comment)

You're a stripper? If so, seriously you're the scum of the earth. You are literally a stain on society no matter how you attempt to justify it. If not, go disregard. Also 40,000$ on any car is absolutely stupid no matter how you cut it unless you're making 100,000+ a year.

Spe: Lol someone got thrown out of
@FedGuy316 (view comment)

Lol someone got thrown out of a strip club last night by the looks of it.

Edster: Disagree
@Trey (view comment)

Disagree...the "upper" range cars you refer to are also the big (unsporty) ones. You obviously don't know cars.

J: Lol really? So a m7 is slower
@Edster (view comment)

Lol really? So a m7 is slower and less sporty then a m5. Fucking idiot. The price is by size of vehile compact to full size sedan...

CS: Lol Yes you don't know cars.

Lol Yes you don't know cars. I take an M3 with manual transmission over M5, M6 M7 anytime. This article is stupid. I know plenty of rich people driving 3-series and C-class. In contrast, I've seen fake rich people/thugs in used 7 series and S-class cause those cars are dirt cheap due to high maintenance.

Ivan Stovall: 7 series is like a Suburban
@Edster (view comment)

Totally agree......Straight idiot

taktikz: These are exactly my thoughts

These are exactly my thoughts. This is how most people in America get their cars and it's pathetic. I honestly believe until Americans learn to appreciate the value of money this country isn't going to be turned around.
Buying off credit and making payments makes it seem as money is cheap and easy to get, when in reality it isn't.

charles5: I know plenty of people who

I know plenty of people who bought really expensive cars while they are barely making it with their home mortgage payments in time. I have never understood what's the point in all this, they care too much about what strangers might think about them, they prefer to pretend to be wealthy thinking they might be envied by everybody else . If they were smarter they would go for a pre-owned car and start saving money instead.

M. D.: They wouldn't let me downsize, so...

I had to file for chapter 13 just to get out from my car payment. This article is EXACTLY on the money, I used to have this giant ego, I had a new 2010 Mustang, but after continual $400 monthly payments plus $120 insurance on a $1,500 take home, I had to take payday loans just to pay my other bills. Part of it was not my fault, since my company got bought out and they reduced the size of my paychecks due to revised payday schedules, so it would take me 6 months(1) to recoup what I would have gotten over the bi-monthly method. So, I gave the Mustang back to Ford Credit AFTER (keyword) I had filed for chapter 13, putting a stay of execution in place so it did not count as a repo. I didn't pay anything out of pocket, but I do have to pay $69 every two weeks for another 30 months to get out of the deal, and I'm glad I did, because now I have a good running little car that I own that gets 40 MPG, and NO PAYMENTS! I tossed out the ego, and took on some humility, the car doesn't turn heads but it gets me from A to B and everything works great and it feels new. But what feels good is having one paycheck every two weeks that's just for me and not Ford Credit or any other lender. Screw new, I say, if you don't have the cash, forget it!

Monthly Car Lease: Why we Lease Cars

The worse thing to do is pay cash for a car. If cash is king then why would anyone part with their hard-earned money on a depreciating asset? Cars don't run forever. I have an old BMW 540i and I just dropped $3500 in a new transmission. That's a pretty good car payment for 18 months, alone. Leasing might not make sense for everyone, but it certainly doesn't make us poor. Shopping for reasonable cash is king makes a lot of sense when you do it for the right reason and with a car that fits your monthly budget.
When you make a reasonable deal on a car lease, you save money on a car that will never have a repair issue and is much safer and reliable to drive than that 15 year old beater.

Quinton Figueroa: If you run the numbers cash
@Monthly Car Lease (view comment)

If you run the numbers cash almost always comes out as the better deal on a car purchase. Cars are leased because it's a good business model for the dealer.

john nortredamme: New cars

It's all about the ego isn't it. We need a new car to look good and impress other human beings. Some are impressed but those that matter really don't care. If that isn't enough we take on a persoonlijke lening for all our other expenses, because we don't have any money left at the end of the month because all of our loans.

MyMove: New Cars

I bought a new car recently, a few months ago. Decided to pay in full in cash. I'm not in debt so I guess I defy this category that is being described. Also, I'm one of those people who believes that newer cars are much safer and require way less maintenance fees that can in the end, add up, not to mention all the opportunity cost of time. At the same time, while I could have afforded a fancy pansy sports car like a decked out Nissan Z Touring, I decided to go with a Honda Accord. Reason behind? Mileage. Too many times I see people my age (early 20s) buy sports cars through financing and not be able to actually use their car because they're spending all their money to pay off the monthly fees that they can't afford to even put gas in their cars. Hmm... can't think of any situation sadder for the owner AND the beautiful car. People should be more realistic about the cars they can afford, considering all factors like gas prices and mileage.

used cars: I must agree that buying a

I must agree that buying a new car makes you poor. New cars offers a lot of expense from maintenance to insurance. Used car is really a good option.

Al Joh (Car Credit): Here comes an economic

Here comes an economic viewpoint. If you bought your car on bad credit, this can simply devastate your finances.

Buying a car with poor car credit is simply TOXIC!! A car is, in no way, an asset. It's a continuously depreciating expense. Respectfully, anyone purchasing a vehicle this way is behaving irresponsibly. Nowadays, even house prices are dropping.

The West is headed for the worst DEPRESSION in recorded history. It's unavoidable ultimately. No-one needs more poverty in their lives.

Again, sorry to offer a disparaging view. And thanks for letting me vent! I wouldn't blame you if you chose not to approve this comment.

Very best of British luck to you.

Love the concept of your blog, as an aside. In the infamous words of our muscle proud Arnold S, "I'll be back" (if you'll have me)
:)

John: Why would any one in their

Why would any one in their right mind buy a used car. You can buy a brand new asian mid-sizer for $20k or a little over and drive it for years. If you buy a used car your just getting somebody else's headache and your repairs will nickle and dime you to death. If you buy a used asian car it will be alsmost as expensive as a new one. If you buy an American or European used car it will constantly break down which could kill you in some bad neighborhoods. If your smart you would go out and pay cash for a new Nissan Versa with no options. No repair bills and dirt cheap to run I agree that leasing or financing is not smart, but buying used isn't smart either especially in this age of higher residuals. If you can't afford to pay cash for an entry level new car you shouldn't be driving. I drive a new mid-size Japanese car that I payed cash for. I payed less than most people payed for their unreliable used car. Buying a used luxary is the worst of all world. It has power seats, but they don't work. It has navigation, but it sucks compare to the iphone. It has leather seats, but their worn and ripped.

Rog in Miami Gardens: Bike & Bus It

I ride a very well-built bicycle that cost me $600 after fenders, lights (front & rear), upgraded pedals were added. Also, a well-built bicycle is incredibly reliable and inexpensive to maintain, even for a commuter who cycles everyday! And, when it is raining or too hot, and I don't ride all the way to work, I simply put the bike on the bus (monthly bus pass: $110). When I go out with friends, about twice a month, taxi fair costs me about $60/month. So, for transportation, I spend roughly $170 - $220 a month which is $2640 a year. The cheapest car on the market, new or used, can't beat that, but I also understand that not everyone is in a position to do this. However, it is possible for people to live car free, but most Americans won't do it because taking the bus makes them feel poor or it is only for Black and Hispanic people (Yes, someone actually told me, a Black man, that once). But, after I paid off my car two years ago, I sold it and put the money in the bank and haven't looked back. Now, I am saving toward to retirement, and can take pretty nice trips and so on. Cars in general, but new cars in particular, eat up incomes. No thank you.

Quinton Figueroa: Very good point. Thank you
@Rog in Miami Gardens (view comment)

Very good point. Thank you for sharing :)

car transport services: car transport services

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If you are over 50 and need to hire a car but the company says that they can't insure you, however if you already have insurance on your car then your current car insurer might allow you to extend your policy to cover your hire car as well. You may be asked to pay a fee towards this, but you could get away with not having to pay separate car insurance on you hire car. We hope these tips will help you to happy and cheap car insurance!

Richard Hughes: It's a sign of the times, and

It's a sign of the times, and it's quite depressing really. I know someone who barely makes enough money to cover her bills, rent, food, and had to take a second job after getting a car on finance. It's ridiculous. Is being constantly poor worth driving around in a shiny, red IOU? I don't think so.

kuldeep singh: Good idea

well nice post, now a days cars price are so high, this post well descried about our situation.

Joe: We're all slaves!

Interesting you mention that we are all slaves to money and a really good article to boot. We run a car leasing company in the UK and the variance in consumer is astounding when it comes to income. Affordability ties in with numerou factors - great article.

Thanks

Liam Borand: What the hell is wrong with a used car anyway?

Could not agree with this more! I almost feel sorry for the kinds of people who feel compelled to always be driving the latest new model. It’s just crazy, and there really is no need for it. I remember reading another article recently which claimed that the cost of a car can cause more worry than your mortgage! It just makes no sense to me. These days, motoring is expensive enough as it is, so why put yourself and your family under so much added stress by taking out a massive finance loan to cover the cost of a latest “must have” model. Get a grip guys, and get on down to your used car dealer instead. Providing you are careful about what you are buying, you will come away with just as good a car from a used dealer as you would from the brand new dealership. It might not be the “latest model”, but I guarantee all that extra cash in your bank is going to look a damn sight more attractive than any new car could.

John - I hear what you're saying, but if you buy the right used car, from a reputable dealer then you won't fall victim to any of these problems. Sure, you could argue that used cars may be more likely to break down than a newer car. But even if you take into account the repair costs, most of the time it is still going to work out a hell of a lot cheaper than a brand new model.

devonn: It makes sense to me

It makes sense to me especially for the young drivers. Driving an expensive car at some point can give you a certain statute, thus just by owning an expensive car you can get included in different circles and meet new people. I wouldn't go for this option though, i am just saying it's understandable. As for me, getting a good deal with a private car seller can easily make me happy.

andy: I am not rich, yet

I was thinking of buying a nice used car. Like a Bentley or a used mercedes cl for around $50k to 80k cash. But, I am thinking of actually buying an old truck because I need it for my business... every month I have to rent a damn truck. I had to ask my mother in law for a van to pickup a treadmill from sears... I am getting tired.

I think about the same, people driving new cars ... about 98% of people who drive new cars dont make enough to afford them. I can buy whatever car I want, but i am driving an older dodge... I am currently making close to 300k a year... but I just started making that kind of money recently.... if everything goes well I will be doing close or more than 500k in 2 years from now.

cal: @andy what do you do for a
@andy (view comment)

@andy what do you do for a living? im just turned 21 and will know how you make 500k in one year, thats more than a doctor!

for rent by owner : business

It's wise to me specifically the particular youthful motorists. Operating a high priced car or truck sometime may provide you with a specific statute, so just by proudly owning a high priced car or truck you can obtain included in diverse sectors in addition to satisfy brand new people.

Blaine Smitley: I couldn't agree more

I pay cash for my used vehicles. Always have, always will.

Talking to a client the other night, and her father wanted her to get a new car instead of a used one. When I asked why he told me that she was just buying another persons problems. Him and his wife traded in their car every 3 years on a brand new one.

So I asked him... So every 3 years you're having problems with you so you trade it in? Am I hearing this right? He reassured me that there was nothing wrong with the cars he was trading in that they just felt more secure in a new one.. Apparently he had money to burn. His daughter on the other hand didn't want to waste money so she bought a low mileage used car from me.

Chads: I agree for the most part.

I agree for the most part. However, there are situations that make leasing a car beneficial. It really depends on your lifestyle and what you are using your car for. But no doubt people live beyond there means all the time.

[email protected] insurance california: so true..........

That is so true that hurts, i feel so poor, my navigator has only 30 inch 3D monitors...

BMW Service Seal Beach: Buying a new car is expensive

Buying a new car is expensive so as per the choice people purchase cars.people think new cars are successful than the old car.Car purchased on situation and lifestyle of the people.

cole: We can blame the marketing

We can blame the marketing gurus who keep telling us it is the AMERICAN WAY, but that doesn't fix the situation. People have to take responsibility and quite trying to keep up with the Joneses. Too many drones out there. Peoples credit repair problems are caused by THEIR own bad decisions. Time for all of us to take responsibility for ourselves.

mike: car shipping news

I always buy used cars. If you buy new one you lose too much money...

Steve: Well! Being a new car owner

Well! Being a new car owner really automatically shows that the person driving the car has more than enough subsistence for his family. That's what everybody feels. presently everybody cares about the car not how the owner has bought it.

casey: be smarter than the herd

Too many people care too much about what strangers think about them, they prefer to pretend to be wealthy thinking they might be envied by everybody else . If they were smarter they would go for a used car and start saving money instead. Or at least negotiate a reasonable deal on a car lease, you save money on a car that will never have a repair credit issue and is much safer and reliable to drive. Until Americans learn to appreciate the value of money this country isn't going anywhere.

Don: Maybe rent?

In some locations where car rental agencies are in a price war, such as Oklahoma City at the moment, the math may work out to drive a clunker for day-to-day, but splurge occasionally and rent something nice for a few days with some of your savings. 20-35K for normal vehicles is unrealistic for most Americans financially, but we succumb to the sales pitch and become slaves to debt.

David: Not necessarily...

Actually, it's not always the same situation. Some people would rather invest the money they have in hand rather than paying for a car in full. In most cases, the return they can get on their investment is substantially more than the monthly payments required for their leased cars. So yeah, if you are smart with your money, there is no need to buy a car in full instead of leasing a car.

Car leasing: I couldn't agree more

The fact I work for a car leasing company may make people think I am biased but I can honestly say that there's no point buying new. I'm not necessarily saying you should lease, although leasing is a great option, but you could also rent or buy second hand. The moment you buy a new car and drive it off the forecourt the price drops by literally thousands of pounds. There are very few other items out there with a depreciation rate like cars.

Led: Having a brand new car may be

Having a brand new car may be a necessity but it could also be a big liability. Before buying a car, make sure you have enough money for it. Owning a car could be a liability as time go by since it decrease in value as years go by.

bareet: A new car always preferred by

A new car always preferred by the people than the used cars, by purchasing a new car you can pay the amount of the car then the insurance but in the used car you can pay a low amount and insurance depends upon the customer so always try to purchase the new car for the use. The new car also give the better performance and everything you got than the used car.

Anonymous: Type of car matters too. You

Type of car matters too. You'll pay as much to keep a 15 year old Camry or Accord on the road as a new one, even if you have to replace the engine / transmission. The old and new will see pretty much the require similar maintenance on the other parts. As for safety, unless the car's a complete pile of rust, both 15 year old cars will hold up quite well.

DifferentPerspective: I understand where some of

I understand where some of these comments are coming from but people also need to chill out with the stereotyping. I'm in my late 20s; I should have over 175k saved by the end of the year; I'll have made about 215k this year. And I have no debt. I am thinking of buying a "lower end" (read, not a 7 series) BMW next year for around 60k and I'm strongly considering buying it outright, i.e., writing a check and driving it off the lot. One of the major reasons I want to do this is simply peace of mind -- I don't want to have payment obligations or be indebted for something, particularly given that its a depreciating asset.

For the people making mean-spirited comments here, I'm sure if they saw me in my new car they'd think "poor life decisions" or "leased" or "couldn't afford." They'd be wrong but that's on them not me -- not everyone fits in the judgmental box that, from the comments here, apparently many people apply in their day-to-day life.

P.S. I'll probably keep the car for at least ten years, first as a daily driver and then later as a back-up car when I decide to replace it -- I was raised in a family where we were taught to buy our cars outright, keep them in good condition and well-maintained, and keep them for a long time.

Jeffrey drayage: Driving new car

I agree with you on this Quinton. Driving a new car is a noob's way of saying he got no guts to go way ahead. Anyway, do you know of any container drayage California for lease?

Fahad Mohammed: You are right Warren Buffett

You are right Warren Buffett owns a normal car only the poor drive expensive ones.

Virginia Honda: Nothing Beats the Classic

Yes, that is absolutely true..
I own a car dealership and I market new and used cars in Virginia. I notice that everytime a customer get a new car they do not pay it on cash, instead they pay it with their insurance company or financing company. But when a customer that want to buy used classic cars they pay it in cash.
Even though most of the cars that I am selling are the new cars, I am still making more money from those old used car.

That is why I always pray that everyday I will have a customer that is looking for old used cars.

Grant so Young! :-): My parents are upscale people

My parents are upscale people and they still have their 2003 land rover discovery. So I guess it goes to show.

Jhon Anderson: Transportation is the main thing

We move to place to place for our work. Whether we go there on a cycle,by bus, train, new or old cars. We just need to reach our destination in the right time. Well I also think that cars are useful in many ways but they aren't for show off. So, we should buy or use cars according to our needs.

Cuencos tibetanos: Buda

I prefer my bicycle!!

Ashley Daniel: Nice to hear about this!

Nice to hear about this! Though bike is more comfortable for short travel, car is suitable for traveling along with family. As cars have become very cheap, it can be used for almost all kinds of people.

Mary Blanks: Bad Money Habits

You are so right about people making bad financial decisions just to keep up with the Joneses. Those bad decisions can even affect our kids.

AnderAveril: Not exactly. Yes we can say

Not exactly. Yes we can say they are making bad decisions but how could I say they are very poor? Yes I will agree that there are some people who has a craziness for buying a car and they do not consider the money factor. They can go to their worst for buying a car. Here we can say that man is really poor. Because after buying he do not even afford to give his car proper service and maintenance which is essential for a vehicle.

ecar insurance: I totally agree with you,

I totally agree with you, will be obvious when the rich or poor when driving a car. the poor will be styled as a rich man to attract the attention of other people. while the rich they would look more casual, low profile and does not accentuate their wealth. maybe our perspective in looking at people with new cars.

car insurance: good post.

good post.

CrazyTown: All valid points to this old

All valid points to this old article. It's kind of like the age old adage of rich people, "if you have to ask, you cant afford it". Well if you have to borrow, you cant afford it. A doctor making $500,000 a year is welcome to buy a new BMW for $60,000 in cash up front. A salesman at a men's clothing store should not.

guythatlikescars: What if someone just buys a

What if someone just buys a car because they like that car? What if someone has the money for the top of the line, but would prefer a 3 or 5 series? Interestingly enough, there are people out there that purchase vehicles for more than social clout. People who are actually wealthy or intelligent don't give a fuck what other people think and just buy what they want.

Simon: Absolutely true

While not all people that buy new cars are poor, most of the folks you see are barely making it. They have to wake up and go to work, otherwise that shiny car is gone as they only live from paycheck to paycheck. But,

Here is what my car costs me exactly, 2000 Subaru Outback Wagon, bought it 7 years ago, for $4500 cash. Nothing wrong with it at all.
Fuel, actual average 24mpg, 10000 miles a year, round up to 450 gallons at $3.10 = 1395 per year
Insurance $263 a year liability only, as this an old card, so if I crash it, parts are cheap.
Depreciation, . THis car is worth zero, as I don't plan to sell it. I bought it for $4500 cash So $4500 loss there. It's got a $200 scrap value for metal which is what I paid for taxes when I got it.
Maintenance: Motor Oil $100, Gear Oil/Fluid $30, Battery $30 as it lasts 3 years ($90),Brakes $10 per year. Tires last 3 years, cost is $60 per tire
Repairs: So far averages at $200 a year give or take a $20, usually a major repair required every 2-3 years, $400 or so. Timing belt or stuff like that.

So fuel $4 per day.
Insurance $0.73 per day
Purchase price $1.80 per day and dropping, (4500/7 years*365)
Maintenance $0.70 per day
Repairs: $0.60 per day
So total per day on this used car is: $8

Now that might not sound much, but that comes out to $240 a month or right at $3000 a year. Just for basic transportation. This is the actual cost. I keep track of every penny I spend on it. I can actually save most of my monthly check. I figure people that buy new cars, are paying twice as much per day, at least as you have interest, depreciation, full insurance. All that money is pure loss.

Dan: Some exceptions

Commonly the exction to many rules, 4x4 pickups are an exception to this one. Do some price comparisons of a 4x4 Tacoma, used vs new, and you'll find that given the same specs and packages, a 2011 Tacoma with 45,000 miles on it will have lost maybe 15% of its value. This isn't after driving off the lot, this is after it's almost paid off! After it's lost almost 25% of its life, assuming a 200,000 mile lifespan. If you plan on trading it in eventually, buy a used 4x4. If you plan on being its final owner, be its first, too.

car service: So true!

I have to agree here. The fact of the matter is that buying a new car is very expensive and it is easy to distinguish who is poor and who can actually afford to buy a new a car comfortably without being poor.

Akira: Used cars in trend, New ones are out of fashion

Most of people think like the same that what other will think about them. That's why they choose to buy a new car, doesn't matter it will make them poor.
As per recent trend, Used vehicles are in trend. There is no need to pay more than you have and it will make you able to purchase better model of vehicle in that amount. What people should do is to check the inspection sheet of vehicle and do the proper examination of internal parts of vehicle.

Memo: What about... I buy a new car

What about... I buy a new car (even if it's more expensive) because I LIKE cars..? and I just can't stand the fact that somebody else had the car before, or that car I'm driving is not mine (leased)...? I mean... if I don't spend money on clothes, food, videogames, cigars, or a long etc, because I like cars and I like spending money on them.... why should I be considered "not smart" or poor...? Disagree with the statement done in the article.

BMW Service: The Truth

I absolutely agree with you, it'll be obvious that rich or poor when driving a car, the poor will be styled as a rich person to attract the attention like a trend. which then makes poorer people look like peasants that can't do any better.

JoeD: The majority of people in

The majority of people in America who are buying new cars are people over the age of 50. That means the people with the largest amount of disposable income are the ones buying new cars, not the people you see driving down the road in this obviously exhaustively researched piece. That doesn't mean that people buying new cars who can't afford them isn't a problem, but let's try to be realistic and, heaven for bid, use some facts to back up our inane positions.

PeteMan: How about that- no one will

How about that- no one will be able to touch a second hand car if no one buys a new car- how can you blame someone who helps you getting your hands on affordable car?
Buying a new car can be seen in different perspective- it is an investment and support of engineering, manufacturing, testing, inventions, new developments and most important it supports loads of people to feed their families- engineers, car designers, plant workers, machinery operators, labours, people with ideas- all sorts of people sweating their ass off to facilitate your ass being transported from point A to point B. All these people are decent working people and you are telling me that the crook at the local dealership who intentionally ''underestimated'' your car and sold it to you for overestimated value without moving his finger. You call that a deal, I call it immoral. Or you call a fair deal the purchase of private sellers- oh come on- he/she just sold it because of financial reasons(which most of us came across) or the car was already aged enough.
Get a new car and drive it for several years or until it dies- that is a good cycle and good for the environment too, all the people selling their cars because of vanity pollutes the environment and deprives the more effective vehicles being driven- not talking of the 12 litres petrol addicted.
I call it a personal choice. And again if everyone was thinking like you no one will be able to even touch a car.
Something I know from first hand manufacturer- there isn't lot of profit on car sales- less than 20 percent most times, more profit comes when your car brakes down- parts, which is what usually happens when the car ages.
Look at this from different perspective. Moneywise you save loads on not buying a new car, but there is more than one side.
If you can afford- go for a new car.

andrew: Unfortunately most western

Unfortunately most western cultures promote getting into debt. We are bombarded with new car ads, homes, easy payment schemes (that we can actually rarely afford) etc. My dad was a cash man his whole life, never wanted to we anyone anything. He was not loaded perse but he earned himself a good living, LIVED WITHIN HIS MEANS and looked after his family well. Thats is the key, to live within your means. Even if you want to "buy" a new car on payments, that's OK only as long as you keep it to what you can afford. Unfortunately people rarely do and as the writer pointed out car payment schemes and leasing only exists as its a good business model for the dealer, not the customer. Much rather make that hard earned money work for me by taking a nice vacation somewhere than giving it to a car dealership.

SH: If you have an account valued

If you have an account valued at $100,000 in a non taxed account (say a tfsa). You did this from investing the max allowance (plus it has appreciated over a few years) you can now draw $275 a month in div payments (say you bought $100,000 of XOM) to help subsidize a lease on a depreciating asset (you want the use of but not to own) because say you like cars but want a new one every three years. You understand it will cost more but you don't care as you are not willing to get an older model or own it for more than three years. You are out of pocket on a C300 about $650 cost, $200 insurance, $200 gas total $1050/ month. You use $250 a month from your Xom dividend and pay out of pocket $800. BUT you still keep your original share count/ investment in a beautiful non taxed account. On top of you can write off portions (depending on your location) of the car if you use it for business use. Much prefer that set up. So lease, doesn't always mean you are poor. It just means you don't want to outlay cash now, so you can either be living pay cheque to pay cheque or using your money, ie tied up in income producing assets.

Jason Wright: This argument can be fought

This argument can be fought in many different ways, as for me, I think it's solely on what your personality is. For me, I would want in a used car, but some may want a brand new car. Sometimes it's pride that is consuming somebody. However, I know my son would like a car and I plan to get him one, but I won't pay full price for one. He's a young driver and I want something used for him. Maybe I can get a junk car and fix it up for him.

Steve: I totally agree with you,

I totally agree with you, will be obvious when the rich or poor when driving a car. the poor will be styled as a rich man to attract the attention of other people. while the rich they would look more casual, low profile and does not accentuate their wealth. maybe our perspective in looking at people with new cars.

Head_Of_Dicks: You are WRONG

That's funny, because most people that have money keep a car until it's too much of a problem and then go buy a new one to replace it.

Matt: New car = poor?

You lost all credibility in the first third of the article. DONT'T make absolute statements unless you can back them up with absolute fact. New car means you are poor? Please give me a break. Yes there are lots of people who live WAY above their means by way of credit gymnastics however there ARE PLENENTY of people who can afford new cars. Just rolled off the lot myself with a new car last week. Replacing my 12 year old car which I also bought new. Oh by the way. High six figures and perfect credit. But, I'm poor because I drive a new car and YOU SAID SO.....

Singer: A choice to be poor, with no new car

Being 'poor' has, in a sence, been a key aspect of a well thought through series of life decisions I have made over the past 5 years. When I was upper middle class (anxious and depressed) investment consultant and business owner I did in fact buy a new car, and it did in fact compound the many financial struggles in my life. Now, as a poor (beyond happy) oil painter I can barely afford tires on my beater pick-up truck. To the point of the article, I guess the writer is referring to those in the middle class when he says poor, which is a concept just as silly and toxic as buying a new car as a beard of status. As a content and willing representative sample of the poor I say, trust me, we ain't buyin any new cars!

Drew: I pay cash

New cars just lose so much value so quickly, it hardly seems like a good investment to me. But a lot of them come with all kinds of free maintenance now too which is nice. Now that's not saying others with more money shouldn't buy new, but it's good to live within your means. I have always paid cash for my cars, and all have generally cost me under 7 grand. I have had some really nice cars too! Some I have kept for many years and others only a few years. I do also have the benefit of coming from a family of mechanics and engineers, though, so I pretty much know how to fix anything on them. It is basically impossible to buy a used car and not have to put any money into it afterwards, but if you do you usually end up with a long-lasting vehicle that you don't have to make any payments on. I think what's important is to do what you can afford.

mike: Nissan

It is basically impossible to buy a used car and not have to put any money into it afterwards, but if you do you usually end up with a long-lasting vehicle that you don't have to make any payments on.

Edster: Obviously not car enthusiasts

Most of the "sensible" (non-car enthusiast) people here have a point. That's why they're content to drive old cars, wear cheap clothing and never travel abroad. So be it. However, some people actually DO love cars, nice clothing and traveling. That's why they work! Each to his own!

Don: Won't be another car

Bought my car new when I was able to work over 35 years ago. Became disabled - yeah, I'm really poor now. There won't be another car unless I win one. (I could probably pay for the insurance, but not payments.)

Ricky Agnew: New cars

This article is written via personal opinion only..No stats ,no source of information listed.In fact the author displays some bias against people that new cars...Is the Author well off financially (or poor and jealous which is the way he seems to come across)?? Well the truth is that People who buy new cars are poor,latinos are all alcoholics and blacks are all crack heads and white people can't play basketball or dance.

Quinton Figueroa: What am I wrong about?
@Ricky Agnew (view comment)

What am I wrong about?

Henry: New Car

I do not disagree a used car can be great and to add to what you suggest may I humbly state
A family may require at least 1 reliable and SAFE car. example ---Toyota Camry SE sticker 24900 approx new...can probably be had in some markets likely for around 21500approx new with 60 months 0% interest.....nothing down......banks , never mind more sophisticated products, likely offer at least 0.5%~0.9% on your money. Therefore if a well selling and reliable , SAFE vehicle can be purchased at 0% and then you hold the car for 10 years performing required maintenance ...it can be OK... I have a friend with plenty of excess money to buy in cash that is making payments as it costs more money to take their money out the bank....it is very hard to generalize although I understand your points about people overspending when unwittingly identifying themselves with their products ... Eg believing one is the car rather than just the driver
Thank you respectfully for your thoughts...it your article is very interesting

Matt: New Car

You wrote this many years ago, so hopefully your ignorant view has changed since then. I mean seriously with the stereotyping? I guess it makes you feel good to judge every person you see driving a nice car. Granted there are a lot who are as you describe, but there are also a lot who are not. I purchased a brand new Civic Si at 30 years old. I paid cash and it was cash that I earned through hard work and saving. I spent less than 3% of my net worth to do so and thoroughly enjoy having my nice new "poor person" car. Hopefully you will see me on the road someday so you can feel superior and judge me a poor person riding in my paid off brand new car with multiple investment accounts earning me more in interest than your annual salary. I sincerely hope it pleasures you to think about such things, I however will be enjoying my car and not giving a second thought about you and your beater.

Quinton Figueroa: Do you really think most
@Matt (view comment)

Do you really think most people buy new cars with cash?

Qflux: FAR too many judgemental

FAR too many judgemental aholes today who want a medal for their chosen lifestyle and who need to "prove" everyone else is "wrong"

It's irrelevant how "most people" buy new cars. That's YOUR definition of "poor" (taking money at .09%)

And your definition of "productive " is "business is life"

List all of the cap you like and do. Post pics of your activities. I'll bet your bank account I can write a blog every bit as "real" as this entry "proving" that your life choices are "wrong"

The very fact that you are so hung up and wealth and judging the personal choices others is *already* a sign of a narcissistic and toxic personality. That you cloak it as "trying to help people be better!" makes it worse because it is disingenuous.

And while patting yourself on the back based on all of these glowing comments, remember that confirmation bias is the ambrosia of the masses. Everyone loves their echo chambers. I mean eve Trump has thousands of supporter right?

Anonymous: Why do I buy a new car?

Why do I buy a new car?
I operate a business with it, where I'm driving 40,000+ miles annually. I can reduce my tax burden by reporting the depreciation of my SUV.
I need something reliable for my business. Used may be nearly just as good, but I wouldn't want to take any risks where the previous owner could have abused the vehicle, even for a short amount of time.
I also register my vehicle to be used for business and request commercial plates.
It's true that buying used is usually a better deal, but I think some people have different circumstances.

James: Most people follow

If buying a new car makes you feel good - go for it. You feel good and so does the bank.. Nothing like passive income:)

Ps most people are not rich

Cam : You make no sense

I just bought a 2016 wrx sti and paid in full. Wrote a check for $46,789 and bought the car. So you're saying if you saw me driving my car you would assume I am poor? Haha you make no sense. I buy new cars because I know I won't have problems with them like a lot of people...

Quinton Figueroa: So most people pay $46,789

So most people pay $46,789 cash for new cars?

MIKE FRALEIGH: Lease Vs. Buying - Leasing is smarter

"Never buy a deprecating asset" - A vehicle is not an investment. It is a necessity that everyone needs in life. It is COST you have in life. PERIOD. "If it fly's, drives or floats - Lease it"

Lease - You pay your monthly payment that fits your money in/out money out budget.
Buying - You are buying something that loses value daily, you pay for repairs and you lose money when you sell it. Unless you plan on keeping your vehicle for longer then 8 years and drive it to the ground. LEASE IT. Mathematically you LOSE more buying a vehicle. There is no argument unless your a middle class person thinking they no everything. Ask a millionaire.

It is so simple, yes there might be "credit poor" people living at home and driving a new car. But there is also RICH business/sales people that also have a nice car because it fits their budget and they can write it off for work or tax purposes.

Quinton Figueroa: Let's ask math:
@MIKE FRALEIGH (view comment)

Let's ask math:

Here is an S550 from their website: https://www.mbusa.com/mercedes/special_offers/current#class=S

To lease it for 36 months you need to drop $6,943 and $1,149/mo for 36 month. You know these are the best numbers for the best credit. But let's go with that and exclude taxes. After 3 years you've put in $48,307 to have this car for 3 years. Now the process starts all over again with your next car.

Now let's look at buying it. First of all, you don't buy it new. You buy it used. And you generally want around 50,000 miles on it. Most cars will easily go 100,000 miles without any problems. So you buy it with around 50,000 miles, run it for 3 years or so and then dump it for a new car. If the current year is 2016 you're going to want something that is like 3 or 4 years old. It's best to buy the first year or so of a new body style so it looks the same as the newer cars still being produced. But it totally depends. In this case we'll search for a 2013 or so s550.

Fire up CL and start searching: http://losangeles.craigslist.org/search/sss?query=2013+mercedes+s550&sor...

We find:
"2013 MERCEDES S550 49K MILES EXTENDED WARRANTY - $49000"
"2013 MERCEDES-BENZ S550 *** Silver/Black *** 43K Miles *** - $48990"

You can even drop the year if you want:
"Blacked-Out 2012 Mercedes S550 - 49815 miles - Upgraded AMG Package & Wheels - $43500"

So rather than leasing for 3 years and spending $48k you save that money for 3 years and then come back in 3 years and drop it on any one of these straight up. Since you're coming in cash you can easily knock off $1,000 or $2,000. So you're looking at buying the car outright for the same price of $48k or even a bit less if you want to shop around a bit more.

Since it's under 100,000 miles you're not going to have issues if you do normal maintenance, which you would do on a leased car also. After 3 years or so you sell it for maybe $10k - $15k less than you bought it for. Because you bought it used and not new it hasn't depreciated nearly as much as a new car would if you purchased it new off the lot. Let's say you bought it for $48k with 50,000 miles and sold it for $33k with 85,000 miles in 3 years. In this case you lose $15k. In the leasing case you lose $48k. How is leasing mathematically better again?

If leasing was the best choice companies wouldn't be making money by leasing vehicles.

WebsiteGuru: The guy who wrote this

The guy who wrote this article is actually the poor one. He has no idea what it means to make money, have money and live rich. Lower middle class, Poor people and peasant mentality individuals are the ones who wait for rich ones to use cars for 1 year - 5 years before they get a chance to ride them too. Ask yourself if cars were manufactured only to be ridden after one year or more years of manufacturing .... will there even be an economy in the western world. Your article shows shallow your mindset, zero grasp of the retail market and what it means for nations like US, Canada, Japan and Germany to actually have awesome economy not dependent on only housing and mining. I drive only brand new cars. They are not leases. We buy them, drive them for about 6 years trade in .. where we always get the value of the loan balance and get a new one.

Shallow neighbors like the guy wrote this article continue to ride 10 year old cars, keep going to the garage each day and butt hurt when they see us in a new ride. And oh my income has grown steadily with easy ability to make money, save for my pension and kids future ... whilst I ride brand new cars. So keep on with the peasant mentality.

Next year I'll be part of the 1% and you will still be thinking like a peasant. Who even allowed you to write this post. Just because you are poor, can't afford new things and have no idea how the world's economy run does not mean the rest of us are. Keep buying cars others have farted, peed and threw up in .... your life must be awesome. We just got ourselves 2016 GMC Yukon Denali. Sweet ride .. the wife loves it ... did not affect my income.

Still making. great income better than last year. I'm GOOD .. we'll give you a call 5-6 years later to buy our car .... my wife and I will do a lot of stuff in it .... just remember that every time you drive it.

Jamie: Sounds like the typical loser
@WebsiteGuru (view comment)

Sounds like the typical loser with big wheel syndrome because he drives a new pig sized SUV after getting raped on a trade.

Simon: Man, part of the 1% and

Man, part of the 1% and buying a little GMC Yukon Denali huh, silly peasant and his high end peasant car, I'm part of the top 1% and I'm driving a new Rolls-Royce Ghost

Daniel H: A sweet ride for cheap

To people who are impressed by such things, I can say I paid cash for my BMW 7 Series, and leave it at that. To those that aren't, I can add that it was made in 1987 and needed a bit of work. It handles very well and will get better as I put in the work. Even if I have to have the engine or transmission rebuilt (unlikely), I will still come out ahead with an older car fit for the long haul.

Tyler B: Misconception

There seems to be a misconception when it comes to buying cars, a misconception that this article helps perpetuate. There is a stigma that if you finance or lease a car, that payment is financially ruining you and stretching your budget, when this is often not even close to the truth.
For most people, there is a very big gap between what the absolute maximum they could possibly afford to spend on a car, and what the minimum the bank will finance. That means that they could buy a car that the monthly payment barley affects their monthly budget; they don't have to buy the most expensive car they possibly can, that would be stupid. Not to say a lot of people don't do that.

Financing or leasing a newer car is a perfectly acceptable means of acquiring transportation, and it can actually SAVE you money, if you are smart about it. Buy or lease a car that you can easily afford, and put the money you save into investments, and you will be much better off in the end.

quest: But isnt life also about

But isnt life also about enjoying your money while your alive on things you want? If you have the money and want to lease a new car and that makes your happy then why not. Even your poor and leasing new cars, its your life and your decisions

Giovanni Vincenzo Marrero: Shut up

My parents buy all thier cars cash. They have a 2004 merc c300, a 2002 cadillac escalade, a 1999 ford expedition, a 2001 ford f150, and a 2011 camaro ss. They also have a 40 foot yacht and a 19 foot speed boat. They just paid thier house off with no mortgage. None of there cars or boats are new, but they all turn heads ( except the f 150 and the expedition, but those are still nice). The only reason they were able to do this at 45 was through time. There is nothing wrong with leasing a new car if you can afford to. But it is a personal choice. My oldest brother leased a 2015 golf gti, which is a nice car, but it doesnt compare to my other brothers used porche boxster, which was cheaper by nearly 20 grand. The gti has its perks, and so does the porsche. Neither of them are in debt. It is just a choice. You cant judge someone for buying a new car, because if no one bought new cars, then used cars wouldnt exist.

Debra Hancock: I need help

Hi my name is Debra and I am poor I am trying to get at something to help me with the car and then I don't want an expensive one about $2,000 or something and I can't seem to find anybody to help me no I was just going to take it off my SSI card every month so I make sure they got paid but I still can't find nobody to help me because I am on a fixed income and I can't afford a High car payment you know so this is so I just thought I'd ask you to please help me

randy: Better plan- save your money
@Debra Hancock (view comment)

Better plan- save your money and pay cash- you are going to have a really hard time finding someone that will finance you with a fixed income from SSI- especially with a lower interest rate. put a few hundred aside each month and you will have the cash in no time.. Find a clean older camry or corolla and you will have a good reliable car

randy: Consider this

At 29 i have owned over 60 cars, I am not "Poor" per se, but not rich- I make between 100-150K, and have bought a couple of new cars, though most have been used cash cars in the 5-10K range.. I could go buy a new 7 series if i wanted to in cash but why.... you need to keep your cash accessible to use it to make more money... assuming thats what you do- most people waste their money on things. Buying new though is not an issue, some people like myself drive 40-50K miles a year, if you buy a used car with lower mileage- thats one less year you can drive it- Also if you drive a lot, its important to have a more reliable car as to not waste time repairing it. That being said, I i typically get a new car once or twice a year and own 3-4 at once. I have bought new and sold them within the month for what i paid or more due to getting a lower cost upon purchasing due to hardcore negotiation.
Depending on your need for the vehicle buying new is not a bad option, most people though could get by perfectly fine with a used car.

Matt B.: Not Poor

Car is a shitty investment regardless. I get bored quickly and like to drive something new every 2 years. I have a short commute and don't need more than 9,000 miles a year. I lease a $140k i8 and love it. Part of what I'm paying for, is the experience and how it makes me feel. When the 2 year lease is almost up, I can just transition into the next vehicle. The warranty covers oil changes, etc. for the life of the lease and BMW (or most dealers) waive the turn-in fee if you get into another vehicle.

For me, a lease makes sense. I sort of understand the poser-type person I think the article is targeting. Even the posers can't afford $2,000/month on a car.

Johnnny : New Cars Are For Poor People

New Cars Are For Poor People

There is a lot of perspective on this topic. One key factor that is being over looked are the following

F500 auto ...does not want you in a car for ever....so they do everything they can to incentivize leasing
and inhibit equity of owners ....ther entire business model is now "MaaS" (Mobility As A Service)...think ...cable bill....F500 auto ...wants you are a subscriber "for life" ;0)

now ...back to the other factors....

Kids 1 of those 1k per month in assorted cost x 18 years (more if you dont raise them properly to be "functional adults"
Spouses 1 of those that dont work....you dont want to see the bad math here
Significatn others (Gfriends, Bfriends etc) .....all those trips, bad over priced eateries, shopping sprees.

they add up....
you can easily ....as a single person....with decent income...."afford any car" you want....and "still come out ahead savings wise on the aforementioned folks

People are people....they all have some sort of vice
collectible guitars
medical cost (if you are healthy...your are sitting on 1 million in equity)
kids...
women...
men...
shopping...
travel...
eating out...
shoes....
guitars...
pets......
jewlery...
etc.

find me a human...and I promise you...I will find the something that they spend a ton of cash on.

enjoy life
be positive, treat people well, smile invest in your health (eat well and exercise a little)
it all works out in the end

Grease monkey: $500 car

Paid $500 for my 95 explorer and so far have 3 years and 150K miles on it.
No debt
Perfect credit.

Laugh at my old car.

"Worst car on the road is a mechanic's car"

Ives Montes: Cars are depreciating assets.

Cars are depreciating assets. Let’s say that you just bought an auto for $22,000. The salesman congratulated you for making such a great deal and as you drive home, you feel like a million bucks. Actually, you should be crying because you lost $4,400 the moment you left the lot.

Sam: New car poor person

You can have money or you can look like you have money. you have to be ridiculously rich to achieve both....

Max: BS Advice

I just googled "why buy a new car in cash when my 15 year old car runs great" for some advice and I came across this stupid article. Have you not taken into consideration that some people buy new cars with cash? This is what I will be doing if I do buy new. I have a 15 year old honda with 187,000 miles and it runs superb but I just came into some cash so I am considering buying new. Never had a new car so it would be great, on the downside I would be out 20 - 30K so I don't know what in the hell to do. Anyone have any suggestions?

Quinton Figueroa: Pay cash for one that is 2 -

Pay cash for one that is 2 - 3 years old with low miles.

Simon : Old cars

I just stumbled on this article. Good advice, I've been writing about cars for years mostly under the topic 'prestige for papers.' I'd never buy a new car. I have 3 older cars, 2 turbo Saabs and an E Class, all worth less than a friend's Mazda 3. Using 3 cars adds little mileage, one budgets for proper servicing and in turn you get good, safe quality cars with a lot of toys. Saabs or Mercs don't have to be your thing but honestly, what person interested in motoring or in our case crossing highways in Australia would take a Mazda 2 or 3 over a high pressure turbo Saab wagon with space and pace or an E Class? Add no one but no one looks at a new Korean or little Japanese box and expresses any emotions. 're money it's a no-brainer!

wow man: your comments about new cars

I cannot believe you actually have a site and read your horseshoe opinion about new cars and poor people. who are you to even say that? doesn't even make any sense. people buy new cars to enjoy, live life, ride safely, might have children, etc, etc, etc, they can buy whatever tf they want. stop hating and grow take some classes at you local SmeLA community college and learn something and think before you say it especially online. dubass with a blog. look at you even cowboy hat. captain retardo's used cars. east los, ca come on down amigos!

Anonymous: Yeah but they get mad Pussy

Yeah but they get mad Pussy so who's really winning here

Anonymous: Opinionated

This article is extremely subjective in many ways. Just because someone is driving a new car doesn't mean they're automatically poor. How do you know if they're making the payments perfectly fine or not? You don't. Don't jump to conclusions.

I come from a pretty wealthy background. My parents always leased new cars, especially Mercedes. Both my parents love the E-class and always made payments effortlessly, with no doubt in making payments. Saying that anyone driving new cars is "poor" is extremely judgmental. Also, the model of the car doesn't always reflect how much money someone makes or doesn't have. My parents had S-classes before and hated them because they felt like they were too big for their liking, so they stick with the E-class. Just because they're driving an E doesn't mean they can't afford the S. People shouldn't be so quick to judge because you don't know the personal background.

I admit, there are obviously people that do try and pose with new cars. But posting articles like these, without taking into consideration of the other side, is extremely unnecessary and offensive saying EVERYONE driving new cars is poor. That's obviously not true. Is Kylie Jenner poor for driving her brand new Ferrari 488? Of course not.

Also, on leasing cars. Because someone leases a car doesn't always mean they can't afford to buy the car new. My parents only bought a few cars new, but hated it because if they got tired of it fast, they would lose an extremely significant sum of money. Leasing, however, you can get a new car and trade it in in 3-5 years and get a new one. Like I said before, it's all personal preference. My parents could buy an S-class in cash if they wanted to, but they don't. My dad has track cars that he buys because he can resell them for the same price, such as Ferraris and Porsches. He always bought them in cash, and still does today.

Placing quick labels on people driving new cars is very judgmental and misleading because not everyone will fit under those labels like you think they do.

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