My Vehicle Cost Me $2,684,729.47 . How Much Did Yours Cost?

November 27, 2013 was a sad day for me.


IMG_0142My 2001 Pontiac Firebird.  Originally purchased by me in 2006 at the age of 19, I purchased her with 24,000 miles on the odometer.  I drove 2 1/2 hours away to buy her for $14,000 cash.


It was the day I turned the ignition key in my 2001 Pontiac Firebird for the last time.  The big BANG that went off inside my motor when I tried to start the vehicle was quite alarming.  The motor oil was full of coolant, and the situation was clear – the motor somehow collected water internally overnight, probably a leaky head gasket, leading to hydrolock.  Water doesn’t compress, so the motor blew.  And that was all she wrote.


I had two options:

1.) Fix the vehicle.

2.) Purchase another vehicle.


This experience, for me, was a great lesson in opportunity cost.  When faced with a choice, opportunity cost is the difference in costs between two or more alternatives.  On any give evening, you may have the option to stay in and cook your own meal for $4, or go out to dinner and order a meal for $34 with tax and tip.  By staying in, you realize a net savings of $30.  By going out, you realize a net loss of $30.  You can argue the emotional benefits of going out – maybe the stress relieved by sitting down at a table with friends in a social setting after a long work week is priceless to you – but for the sake of argument, this exercise simply points out cold, hard, emotionless dollar figures.


Motor Vehicles Are Terrible Investments.


Your vehicle will more than likely depreciate at a rate that is similar, if not outpaces, longterm equity appreciation.  And then there is the added expenses:


1.) Fuel

2.) Scheduled maintenance (tires, brakes, filters, oil changes, etc.)

3.) Insurance

4.) Repairs, both mechanical and/or cosmetic

5.) Tolls

6.) Parking (if applicable)


The list goes on and on, so far that next to housing, transportation is America’s greatest household expense.


I spent several weeks bumming around in a loaner, researching the used car market within a 300 mile radius, all the while weighing my options of repairing my current vehicle versus the best used vehicle deals I could find.


About one month later, I decided to buy a slightly used 2013 Chevrolet Camaro with 5,340 miles on the odometer for an after-taxes sum of $33,400.



This is how she looked when I brought her home.  Much like my trusty Firebird, I drove over 2 hours each way to get her.


According to the CIA, the current life expectancy of an American male is 77.11 years.  Of course, these life expectancy figures are lowered dramatically due to birth and infancy complications, with substantial increases in life expectancy after Year One.  An American man reaching age 65 today can expect to live, on average, until age 84.3.  I purchased the vehicle at Age 27.  Assuming a life expectancy of 84 years and typical (conservative) compounded market returns of 8% over that kind of investing horizon, what could I have done with that $33,400 initial investment if I were to simply have stuck the principle in an S&P 500 mirroring ETF?


The initial cost of my vehicle over my lifetime will be $2,684,729.47.


And that’s before gas.  Before tolls.  Before maintenance.  Before any single dollar I ever sink in the car for any reason.


Knowing This, Why Did I Buy My Vehicle?


1.) I grew up amongst friends obsessed with American muscle.  One even had both a father and brother that owned mechanic shops.  That love infiltrated my mind.  Big, loud, V8 American muscle cars were my fantasy.


2.) I work.  Hard.  I was more than 4 years out of college.  Through that time, I had taken only a single week-long vacation for myself.  I finally decided I had earned my keep enough to give myself something nice.  It is very important to reward yourself on occasions – as long as it is safely within your means.  To put things in perspective, I paid off all my student loans within 3 years of graduating and I didn’t reward myself for that accomplishment.  Looking back, I’m a little ashamed of myself for that.


3.) I could afford it.  Through years of frugality and financial responsibility, I had the means to make a sizable down payment that did not threaten my financial “cushion.”  Interest rates on the remaining loan were barely inflation-level, meaning the loan was practically free.  The monthly payments were less than my combined electric/gas bill.


4.) The purchase did not threaten my ability to invest.  I still invested more into various equities that year than in the previous year.


5.) I did the math above.  I did not make my purchase strictly out of emotion.  I coldly crunched the numbers to see if I could afford it.  When I realized I could without negatively affecting my current and future lifestyle, I allowed myself to indulge.


6.) I got a smoking deal.  At $31,000 plus taxes, registration and dealer fees, the car had a blue book value 15% higher and a sticker price of $41,000 from just 6 months ago when it originally sold.  There are HUGE savings to be had buying a muscle car in the middle of December.

The goal of this exercise is not to immediately dismiss every purchase you’ll ever make as frivolous.  The goal of this exercise is to assess the longterm ripple effect a significant purchase can have on your life.  You need to have a financial plan for your future.  Once you have a financial plan, you will be able to make these types of calculations and see how they will effect your financial plan.  You need to be honest and show no emotion in your calculations, because the ultimate goal should be to not threaten that financial plan.  Frugality and living below your means is of crucial importance.  However, living like a pauper every minute of every day takes much of the joy out of life.  Just make sure you can afford your indulgences, and make them last.









All information found herein, including any ideas, opinions, views, predictions, commentaries, forecasts, suggestions or stock picks, expressed or implied, are for informational, entertainment or educational purposes only and should not be construed as personal investment advice. I am not a licensed investment adviser.



  1. Anthony you are amazing! As a fellow struggling millennial, I love your witty posts and thoughtful investment ideas. It seems to me that you really have grasp on what finance is. I’ll keep reading and learning. Keep posting articles.

    ps: Totally agree with your Corning call. Started buying on Friday.

    • Hi Aaron. Thank you for your support. I have learned so much over the past few years, but still have so much left to learn. Best of luck on your journey as well, I hope I can have you along for the ride with me.

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