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One of the biggest financial questions I wrestle with is when to spend. Saving has never been an issue for me—my thrifty habits make that easy. What I struggle with is knowing when (if ever) to splurge.
For example, I love rock climbing with my kids. It’s a weekly ritual, and I have no hesitation spending money on those experiences because I know I’m investing in memories before they grow up and move on. That decision feels clear—it’s money well spent on something that truly brings me happiness.
But then there are purchases like a car. I’ve always driven reliable, practical vehicles—mostly Hondas and Subarus—that get me where I need to go without breaking the bank. Lately, though, I find myself looking at high-end cars like Corvettes, Teslas, and other luxury models. I could afford one, but I can’t shake the thought that it’s a huge expense for something that will inevitably depreciate.
So, I keep weighing my options: Do I spend $70K–$80K on a sports car, or stick with another $40K into a new Honda? That extra $30K–$40K, if invested wisely, could shave a year or two off my retirement timeline. It’s a tough call.
Has anyone else struggled with deciding when to spend big on a car, knowing it’s a depreciating asset? I’d love to hear your perspective.
Thanks in advance for sharing your thoughts!
We too have experienced this and other financial decisions. Here’s how we resolve them. If we have saved money for a specific item like a “luxury car” or today that could simply mean a higher end vehicle and we can pay CASH for it then we purchase it even though we know it will depreciate in value. In fact that very thing happened to us a few years ago. We had earmarked 50K for the purchase of a Lexus RX350 my wife wanted. The money appreciated several more thousand and when it was time to purchase the vehicle and take the money out our financial planner tried to get us to make a loan and to keep our money invested. I told him this money was specifically earmarked for a new vehicle and was not part of our retirement account. I could see he wasn’t happy with our decision but it wasn’t his money it was ours to steward as we saw fit. Needless to say he’s no longer our financial advisor and my wife is thoroughly enjoying her new car. We do the same thing when vacationing or flying first class or being generous to our children. If we can pay cash for it and want it then we do it. Of course my wife and I have to be in agreement. The thing is we have struggled and lived frugally all our lives, so now that we finally have a surplus (north of 1 million dollars), we can enjoy a few things we want or desire; or as the writer of this article put it SPLURGE!
Reading these comments is a good way to find out if I really want a new(er) car with all that comfort and safety I imagine. Apparently I don’t because I came away a bit less interested! Thanks for all the discussion. (Maybe I should fix the blind spot indicator on the 2012 Odyssey?! I’ve been putting it off because the repair seemed so expensive for something I’ve driven without for 42 years.)
I am in the same camp — no problem with saving but spending our hard earned money? For what?
First , we live comfortably well, for us who don’t need much and who know how to save on just about everything. So one thing we spent on was when it comes to cars, my husband was 75 at the time splurged on a brand new car with all the bells and whistles for SAFETY! He went to the dealership with a list of safety features: lane change indicator, auto-this and that, comfortable seats and so on. And he got a very good solid car with all he wanted and more.
We used to drive older used cars with horrendous used up seats. After 500 miles drive, we almost could not stand up to exit the car.
My present from him was a brand new truck for my part time job as a gardener, with power assist steering and power brakes and enough room to store my equipment.
So I’ll say as we get older, safety should be our most concerns in spending. Anything that prevent us from landing in the hospital prematurely is worth spending. Home improvement should be done with safety of daily living in mind. Grab bars in the shower, for example.
Now we are thinking of how to gift the profligate relatives who don’t seem to take care of themselves financially. We don’t have children.
As long as my car gets me from point a to b in comfort and meets any other needs I might have, I will continue to drive my 2017 Honda CRV. It will probably be my last car since I am 76 and most CRVs last well over 200,000 miles.
I, like many readers of Humble Dollar, am frugal (not cheap!) and have a hard time spending money on “exotic” things. But one of my best purchases ever was a Mazda Miata for my 50th birthday. I still have it 20 years later. I take it off the road every winter (I live in the Northeast), but every spring I am delighted & amazed about how it handles. It’s fun to drive.
On my “regular” cars I either buy new or only a few years old and drive them until they won’t move or need to be repaired every month.
My only other “splurge” is lie down flat beds on planes if we are going overseas. I don’t want to lose 2-3 days of a trip adjusting to the the time change. (I cannot sleep in regular plane seats.)
One final comment about how your perspective changes over the years: I think it was about 30 years ago I read the book “Die Broke” and that was my strategy until recently. Ask my 3 boys & they’ll tell you they’re going to inherit $0.00 from us. But recently I have had a change of heart and would love to leave an inheritance (as well as spend money on them while I’m on this side of the ground).
I have owned 3 cars over the last 35 years and after 18 years with an F150, which was handy for house renovation projects, decided I had earned the right to something more exotic. I follow car shows on TV and also ride a motorcycle so this was a decision that speaks to me personally.
The pros are that I have a big smile enjoy the drive every time I jump in, and when a safe opportunity presents itself I have fun with more spirited driving.
The cons are the ongoing cost of routine maintenance, which is in the stratosphere compared to Hondas and Chevys, the awareness that your car can get dinged / scratched in parking lots etc. and hopefully not deliberately ’keyed’.
I mitigate maintenance costs by keeping the mileage down, and once out of warranty I found a local shop that specializes in European cars which is significantly cheaper than the dealer. I am also careful where I park and that usually adds a few steps to the step count.
Assuming the purchase is not going to jeopardize your finances, I say go for it if it speaks to you, life is short. If you can’t live with the cons then maybe there is a used or in between option that lowers the potential heartache.
Good luck 🍀
you don’t need to pay any attention to ‘what they think you should buy.’
to me the value of a porsche is to make you examine the question of ‘why i want a porsche?’ same tugs as everybody else…we all have our triggers..
intellectually we may need little, couple pair of pants, shoes, shelter, enough in the bank to stave hunger for variable lengths of time…health and happiness of loved ones, a stable future…
then YOU get to decide…is having a bigger dragon’s hoard more important than the porsche? up to you. i use money as insulation after the necessities. i treasure the illusion of stability a couple of bucks brings…my choice. money is rarely stuff…but it IS feelings..
the value of a porsche is to make you wonder why you want a porsche…especially with a functional honda in the driveway.. it is the self awareness that is the real treasure and that was ‘for free..’.
you can’t separate the feelings from the decision points but can be aware of the tugs…then buy it or don’t.
Over the years I’ve rented a “fun” vehicle from time to time. That scratched the itch. In 2008 I purchased a Subaru WRX and drove it all over the country, for business purposes. That was the last new automobile I purchased. When it reached a certain higher mileage I switched cars with my spouse and drove the 2004 Malibu Maxx. G really loved it! Since then, only purchased used cars and a new Roadtrek 210P RV. When we purchased that RV, as I accepted the keys G said “This will transform our lives.” That was both declaration and purpose. We have driven that for fun all over the country. Currently planning a 6,000 mile trek. Latest car purchase was a slightly used 2015 Cruze.
I won’t spend big on a depreciating asset. I’ve been investigating several new vehicles lately. However, it’s the sticker shock that keeps me from buying and I don’t want to finance a vehicle. I have the money, but don’t want to pay the price for what I would like. In addition there are so many features on vehicles today that I will never use or because of government mandates that are senseless.
I only buy Honda and Subaru, too. The extra money can go toward other life experiences. Rock climbing is great, but other adventures await, and a reliable, low-maintenance car can get you there.
A common but still interesting first world conundrum 🙂
We keep a 2008 Lexus in storage while we travel; I wrote about it here:
Taking Back the Wheel – HumbleDollar
I often find myself wondering whether it makes sense to keep doing so or to sell it and just rent a car when we need one, especially since we have no plans to stop traveling outside the country anytime soon.
But, we just got a 150k mile service, and in a month or so will be putting the car back into storage. We enjoy having it. Someday hopefully far into the future we’ll need another car, but for now we enjoy this one.
Like several others have said, whatever came next, I’d be inclined to buy a nice car that’s just a few years old, and would start the search with certified pre-owned.
Buy a low mileage Miata MX-5 and enjoy a fun and reliable ride for a long time without breaking the bank!
We just bought a 2024 Volvo plug in hybrid, slightly used. It was a dealer certified pre owned with over 5 years left on the warranty. 6 months old, 6,400 miles. New this car was almost $66,000. I paid $51,000. Traded in a 9 year old Lexus that, while reliable, had a horrible infotainment system. With the Volvo, most things are voice activated AND I can drive 40 miles on electric only, which covers 90% of my driving.I would never have paid $66,000 for it, but at age 70, this very likely will be my last car. Add in the additional safety features, that’s enough justification in my book!
Hmm
I always think it’s nice to be able to afford that “nice” car but then not be concerned about it being a target for thieves, vandals, runaway shopping carts, careless parkingdoor slingers and potentially high repair bills because you in fact drive a more modest vehicle.
But there is no doubt there is a social status game around the car you drive being a representation of the person you are. This cuts both ways – driving a 15 year old Suburu wagon says something but just different to the gleaming lot fresh X5 or 5 series.
I have friends who are very definitely car guys but they get their kicks from kit cars and touring them over alpine passes or up hillclimbs while driving modest everyday cars.
If it comes down to the upgrade to desired car equating to 2 years earlier retirement I don’t think it’s even a question is it? You’d have to really love your job or the car to derive that value.
Thanks again for all the great comments. Really appreciate it
A three year old certified pre owned from a high quality dealer would be your best choice. They are part of a rigorous inspection and usually come with a 6yr/100k Mfg warranty.
My friend has bought at least 6 cars this way and all have been great.
I appreciated a blog post i read some time ago that talked about using some sort of network-to-expense ratio to see if you could afford something.
For a house, I think she used 10/1 or 20/1 ambiguously. I don’t recall 100%.
She also mentioned you have to adjust it a lot for your first house or you will never own a home….but anytime you are looking to upgrade….look at your networth.
Bringing it back to your toy desire….what percentage of your networth is the toy? If its like 1%…who cares….5%….tread lightly. Where is the middle is a “good number”…that’s your decision.
The second thing….is cars today have more tech than elegance. 50 years ago….you bought a high end car for high end finishes….now you can get just about any car with high end finishes. I can buy a Mazda with leather and a moonroom and heated seats any day of the week. Modern luxury and sports cars are a blend of high end finishes and tech…..
the thing about tech though…it doesn’t stay special for long.
10 years ago..people stopped in their tracks when a Tesla drove by. Now its just another car. Same for the features in high end car. Today’s newest tech is common in 5 years and standard in 10.
Look at a 2025 Mazda CX90 vs. a 2015 Cadillac Escalade or Range Rover.
FOR ME…it doesn’t compute to pay that much for something that just doesn’t stay special for that long. In 5 years one is stopping in their tracks…in 10 years….your features can be found in very common cars.
So even I was a “guy car”….I would never buy something newer than 4 years old.
Personally, I like the nicest mass-made Japanese cars from 10 years back. Older Lexus RX, Mazda, anything with an iGrand Touring trim level or nicer Subarus. But that’s not you.
Ross – great post! Keep climbing. I gave it up when I got into my 60’s, partly because my wife was concerned with my safety, and partly because I realized I didn’t care to work at it hard enough to keep up with my climbing friends. Doing it with my kids when they were younger (if they had been interested) might have been a game-changer. I’ve written about that.
I’m sorta facing the same auto purchase decision point. Subaru is coming out with a hybrid Forester in a few months. My current 2011 Forester only has 127K miles, but I’ve reached an age where I would like to have all the safety features that come with new cars. I wrote about cars I’ve owned in an article before. Can’t say I’ve ever given more than passing thought to an expensive sports car. Once I told my kids that when they’re millionaires I want an arrest-me-red Porche 911S convertible with a whale tail. Some time later I told them to never do that. 🙂 Plus, they’ve not millionaires yet.
At my AARP Tax site 3 of the preparers recently traded in an old Forester for a new Crosstrek. They all seem happy. One of the men ( a retired comm engineer) explained how he always buys his cars through Costco and felt he got a good deal, pus $400 worth of parts. He changes his own oil and air filters.
Ross, thanks for a timely and important post. I just drove my 2014 Accord to the store. Every time I drive it I feel like I’m surrounded by much nicer luxury cars. But it drives OK, and it only has 95K miles on it. We usually take my wife’s 2022 Pilot if we are going out together, or on a longer trip. I’ve thought about upgrading but can’t justify the expense. As long as it is safe and reliable I’ll likely hang on to it. I bought a touch-up paint kit from Honda and plan to clean uo some scratches. I may splurge and have it detailed. If anything I’d rather upgrade my wife’s car.
Ross, I’m glad you mentioned prices because they coincide with what I consider doable. We can afford $80K, but I just can’t justify spending that much. I agree with David’s comment to consider staying with your same car brand, but simply moving up to a nicer model. It’s also true that the luxury brands often get poor reviews for reliability and customer satisfaction.
We’re in the thinking stage of replacing Chris’s 15 year old Prius. Chris wants a sub-compact SUV. I have a thing about buying cars assembled in the U.S. That has led us to look to Subaru, who builds 2 models of the Crosstek in Indiana, a fully loaded Ltd has a sticker price around $34K. I can live with that.
Same struggle here Ross. I am trying to decide on a new car and the $65K I will spend on what I want. In addition, I have planned a cruise that will take another $25K later this year. My current 2010 Audi Q5 has done well but has over 150,000 miles on it and is due for some costly repairs that will likely be close to $5K – so it is decision time. Please do not forget the additional insurance cost on the vehicle of choice as that will likely add a monthly amount that will stay with you for a while.
We drove mostly lower end Toyotas for the last 20 or so years of our working years. Since we retired we still stuck with Toyotas but bought a new fully loaded ‘20 4WD Tacoma (has just 40K miles on it) and last fall a Crown Signia (brand new model) hybrid AWD.
We checked out the reviews of luxury brand vehicles on Consumer Reports and they were pretty much panned.
We figured that we will be driving less in retirement so the vehicles will last much longer (15-20 years?).
If we ever need to replace one will probably sell both and get one final (self driving?) car for our final vehicle purchase in our eighties.
In retirement, you will never regret having saved more when you were working.
And few people at the end of life wish they’d worked and spent more. It’s all just stuff.
Having said all that, I’ve never seen a happier bunch of people than the lads and lasses of the Corvette owners club at their annual gathering at Laguna Seca race track in CA. People drove almost every generation of that car to watch the old American LeMans Series race there, and to drive on the track themselves for a bit. I took my son there as a high school graduation present and it was a hoot.
If owning something like that connects you with a community of like-minded folks who share your love of a car, it could bring years of happiness. Or it could be just another thing that’s fun for a time which you eventually regret. Hard to know before buying. Try dipping your toe in. Rent one for a week before buying or get a lightly used one for less?
Assuming you are comfortable with your income versus spending and have a sufficient emergency fund, I suggest that you keep what you’re currently driving for your everyday vehicle and buy what you like for special occasions! I did this very thing about a year before retiring, then promptly totalled my everyday drive.
You could always buy used. I hear used Teslas are going cheap these days.
I should really replace my 2007 Camry Hybrid with a car with the new safety features, but it’s done fewer than 75,000 miles and the guys who maintain it look at me like I’m nuts when I mention selling it. I started a new car fund when I paid off the loan two cars back, and although I haven’t added anything in well over a decade it should buy me a very nice “last” car. I just don’t like to spend the money, plus I want a plug-in hybrid sedan and there aren’t many of those around.
2007 with 75k miles?! I bet your mechanics do look at you like you’re crazy. But maybe you have some potential buyers there.
I have a 2004 Miata with 60,000 miles!
That has been mentioned…. It has so few miles because I was traveling so much. At 77 I am thinking I could use some of the new safety features: I don’t even have a back up camera. I would like the camera, and the sensor that detects cars approaching when I’m parked between two SUVs, and especially the blind spot detector.
I gave a friend a ride the other day and she claims it still smells like a new car!
I love a camera. We don’t have one either, and I’m told you can get them after market, but we don’t drive ours enough to make it worthwhile to investigate.
There’s a lot to be said for driving an older car that still runs and doesn’t need major repairs. My daughter still drives the 2008 Chevy Cobalt that I used in my last job to do home visits throughout the five boroughs of NYC. Every time it needs a repair, she has a figure in mind above which she won’t go. Her mechanic must know, because the repair always comes in lower. It has the added advantages of being both very beat up looking and very small, so street parking isn’t much of a challenge. 😉
Forgot to add that she lives and works in Brooklyn. No lot or garage at home or work.
Well for ten years up to 2014 I saved in a separate account to buy my Mercedes, before that we had Chevys. But I was already retired.
Because that car needed major repairs, a month ago I wrote a check for a replacement Mercedes.
‘’It all boils down to can you truly afford it? Will buying the car have any negative impact on your current or equally important – future – financial security? If the answer is no, buy it.
Are your children’s college costs covered, how’s your retirement fund?
Of course, as you know there is no logical justification for spending that kind of money on a car, but that is not the point.
Heck, there is no logical reason to rock climb either, but you identified the intangible value. .