We all have our dream cars. But the reality is, most cars are depreciating assets. And expensive cars also typically cost more to maintain and insure.
So the first tip is simple: don’t buy a car you can’t afford.
In fact, even millionaires don’t always have fancy cars on their driveways.
Personal finance expert Dave Ramsey points out that for those who have built their first level of wealth — he defines it as having a net worth of between $1 million and $10 million — the cars they drive are “understated” and that “the valet is seldom impressed.”
“It’s usually a used Camry or a nice used Honda or a nice old pickup truck of some kind,” he said during an episode of The Ramsey Show.
“People that achieve that layer of wealth, that one to ten million dollars, the way they did it is, they didn’t do it for you. They’re not mad at you, but they don’t care what you think. They were not living their life to impress others.”
Simply put, don’t try to keep up with the Joneses.
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With elevated gas prices over the past year, we’ve all felt the pain at the pump. So it’s important to remind ourselves that the way we drive can affect the mileage we get.
According to the Department of Energy, aggressive driving — defined as speeding, rapid acceleration, and braking — can lower gas mileage by 15% to 30% at highway speeds. For stop-and-go traffic, it can lower gas mileage by 10% to 40%.
And this applies not just to cars powered by internal combustion engines. Having a heavy right foot can impact the mileage of electric vehicles as well.
The Department of Energy says that when it comes to battery electric vehicles, “rapid acceleration reduces vehicle range” compared with “gradual acceleration.”
It’s no surprise: regardless of what type of fuel your vehicle is running on, it takes energy to accelerate it.
Therefore, if you want to get more miles out of one tank — or one charge — be gentle with the accelerator pedal.
Other than paying for the car, the gas (or electricity), and the maintenance and repairs, car owners also need to have valid insurance to be on the road.
And these days, premiums aren’t cheap.
Obviously, your premiums will depend on many factors, such as the make and model of your vehicle, your age, driving history, use, and where you live. But it can be hefty: A recent report by Insurify found that Americans could pay 16% more for car insurance — that's almost $1900 — in 2023.
No matter what type of vehicle you drive, if you think you are paying too much for your car insurance policy, you might want to compare car insurance and save up to $500 a year.