NFA Finance

After 25 years in the car business, I’ve come to one conclusion:

Most people buy too much car.

Not because they need it.

Because they’re sold on it.

Every day I see people signing up for payments that make absolutely no sense.

They convince themselves they need a brand-new vehicle.

They convince themselves they need the warranty.

They convince themselves they need the newest body style.

They convince themselves they need the payment.

The reality is most of the time they don’t.

What they really want is the feeling.

The feeling of success.

The feeling of status.

The feeling of approval.

The feeling that somehow this vehicle says something about who they are.

Car manufacturers know this.

Advertisers know this.

Dealers know this.

That’s why the commercials rarely talk about the payment.

They sell the lifestyle.

The beautiful house.

The perfect family.

The attractive couple.

The mountain road.

The luxury restaurant.

The image.

They’re not selling transportation.

They’re selling identity.

And people buy it.

Literally.

The crazy part is that there are thousands and thousands of perfectly good vehicles available for a fraction of the price.

Every day I see reliable vehicles listed for under $10,000.

Do they have every option?

No.

Do they smell new?

No.

Will they get you where you’re going?

Absolutely.

When I was younger, the path seemed simple.

Buy a car.

Save money.

Upgrade when you can truly afford to.

Repeat.

Instead, many people immediately jump into the biggest payment the bank will approve.

That’s where the trouble starts.

Just because a bank will lend you the money doesn’t mean you should borrow it.

That’s true for cars, houses, boats, and almost everything else in life.

One of the wealthiest habits I’ve observed is that successful people often drive far less car than they can afford.

They don’t buy vehicles to impress strangers.

They buy vehicles that fit their needs.

I’ve seen people with hundreds of thousands of dollars in the bank driving older Hondas, Toyotas, trucks, and SUVs.

Meanwhile, I’ve seen people living paycheck to paycheck driving vehicles they can’t really afford.

The car payment becomes a lifestyle.

The insurance becomes a lifestyle.

The maintenance becomes a lifestyle.

And before long, they’re working to support a vehicle instead of the other way around.

The biggest trap of all is depreciation.

Cars don’t build wealth.

Most of them destroy it.

The moment you drive most vehicles off the lot, they’re worth less than what you paid.

The newer and more expensive the vehicle, the bigger the potential hit.

Now don’t get me wrong.

I love cars.

I’ve owned plenty.

I still love a beautiful vehicle.

An Escalade-V is cool.

A classic Chevelle is cool.

A Porsche is cool.

But there’s a difference between appreciating something and financing your future away to impress people who aren’t paying your bills.

That’s the lesson.

Buy the car you need.

Buy the car you can comfortably afford.

Stop worrying about what everyone else thinks.

Because at the end of the day, nobody cares what you’re driving nearly as much as you think they do.

And the sooner you figure that out, the wealthier you’ll probably become.

— Nick Francis