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I was sitting in the car outside my grandkids’ school this morning while my wife Suzie dropped our granddaughter into preschool. I noticed my grandson’s friend being dropped off in a shiny new VW Transporter Multivan. I know his parents, they don’t do camping. It seems like an awful lot of cash and car for a family of four. They’re everyday folks with normal-paying jobs.
This trend for large, expensive vehicles seems prevalent with the thirty-something drop-off crowd at my grandkids’ school: large German SUVs, transporters, and low-end performance cars with “M” and “RS” badges. I meet and talk to these people at school sporting and social events. They’re mostly ordinary blue-collar workers, not high-end professional career people.
The thought passing through my mind is: why? Why saddle yourself with such a large fixed financial cost at that stage of life? It’s a puzzle to me. Personally, at that age, I was driving much less car and funding my retirement accounts. Maybe it’s just a “thing” now to focus more on your look. Maybe they have large resources I’m unaware of. But I suspect not.
I know cars are less often purchased outright nowadays, with various leasing arrangements being the normal method of ownership. While this shift has let people stretch into more expensive options than they could afford by buying outright, the real difference is what happens after the payments end, or don’t.
With traditional financing, you pay for a car over five years, and when the finance is finished, you have the opportunity for maybe three to five years to divert that money into savings. That’s a lot of cash saved. With these leasing deals, you don’t get that chance. You’re locked into a perpetual payment cycle, you always have to take on a new one. I don’t know which approach is best, but I would personally prefer the savings route.
I hope for all my grandkids’ parents’ sake that this choice doesn’t lead to underfunded retirement dreams in later life, as the constant car payment obligation limits their ability to focus on long-term security.
But sure, what would I know? I’m only a middle-aged gentleman making himself useful and passing his retirement time dropping off the grandkids. Anyway, they seem happy with their choice of cars, so I guess that’s okay. And I’ve more important things to think about, where to go for breakfast when Suzie gets back from the school building. This drop-off business makes you hungry.
I purchased cars of various sizes as the children were growing. I had a 2WD Ford Explorer at one time which I used to ferry Scouts and tow the troop trailer. There was a pickup truck in the mix, too, and I used it for my business. I once hauled tech to New Orleans after Katrina. I had fabricated everything in the Midwest. Ditto for projects as distant as Salt Lake City and Tulsa.
As the vehicles aged at a certain point I prepared them and sold them at a discount to the children as their first automobiles. After a couple of years they traded them for something newer.
Over a period of 59 years I’ve purchased quite a variety of vehicles, many slightly used. There was a Chevy Vega in the mix, with 5-speed manual gearbox, and a slightly used 1969 Ford Thunderbird with 429, 4 bbl engine. That was a beast! My only real splurge was a Subaru WRX. But once G got into it, I couldn’t get her out of it and I switched to driving the Chevy Malibu. I guess the Roadtrek RV could be called a splurge, too, if for no other reason than the 6 figure price tag.
When we evaluated RVs in 2013 we rented one on a Mercedes chassis. The cache of the badge was insufficient for me to buy one. One problem at the time was service. There were only abut 200 Mercedes certified service centers in all of North America. The BlueTec diesel provided decent mileage and adequate torque, but diesel being more expensive the cost per mile was higher than the Chevy chassis. It is also finicky and there were complaints of fault codes resulting in the vehicle limping along for miles, as the vehicle computer constrained the RPMs. In the end a 6.0 liter gasoline engine won. After 75,000 miles, it has performed as expected and I know of instances where this particular engine and transmission, if maintained, will provide 400,000 miles of service. The Roadtrek has a fiberglass coach and it will outlast me.
At 21 ft. the Roadtrek is sufficiently small that some use this type of vehicle as a daily driver. However, at 15-16 mpg that doesn’t make much sense to me. Furthermore, I prefer to save it for real trips, rather than for short hauls purchasing groceries. It is our backup vehicle.
After living in a resort community for about 10 years I finally joined the group and purchased a used golf cart for $3,000. We use it for short hops to and from activities and the restaurant, etc. It isn’t street legal but because it is confined to the resort I don’t need to register it in the state. It’s included in the home insurance, so that’s taken care of, too. Operating cost is very low; simply electricity to charge the batteries. It is tempting to upgrade it to Lithium batteries and when a battery change is required I’ll probably do that. It would be cost effective to do so.
We have no idea what the next vehicle will be. Our daily driver is in a 2015 Chevy Cruze with all of the bells and whistles. We purchased it very slightly used and it has performed flawlessly and is very comfortable. Cost of ownership has been low.
One splurge is using professional car washes. We’re on a monthly, fixed fee plan. The incentive is to save water here in the desert, as these recycle and reuse some of that water. A few here in the resort wash their own vehicles, while fretting about potential water shortages. We don’t have any grass, either, preferring native desert species and rock. Go figure.
If I had a solar house I would consider a Tesla as the next vehicle. However, it is very unlikely I’ll be adding solar. But who knows? It is all about allocation of funds. Our local electric utility provides a monthly comparative analysis of our energy use and we are much lower than the average for this area. Monthly kWh is about 400. Natural gas consumption is 3 therms per month for about half the year. It is used for cooking and hot water. Consumption peaks in winter with more baking and cooking. We have an “on demand” hot water heater.
Our electric consumption is sufficiently low that installing solar panels and backup batteries would take a long time to achieve a payback, unless used to charge an automobile. I recently reevaluated this, because the battery prices continue to fall.
Many neighbors of mine have gotten golf carts to take their kids to school and skip the car line.
We’re in the pickup business for two of our grandkids and, yes, it does make you hungry. Tomorrow night we’ll be having German food at a pub that runs a.month-long Oktoberfest!