QOTD: Bank Error in Your Favor?
As the calendar flips into 2020, various and sundry beancounters have begun bleating that we’re all spending way too much money on cars. The folks at AAA remarked earlier this year that the average annual cost of vehicle ownership amounts to $9,282, or $773.50 a month. That’s the highest cost associated with such since they began tracking expenses in 1950.
Santa is just around the corner (no, really — go look) so TTAC is here with a fictional present: assuming there is a monthly bank error in your favor of $773.50, what would you go out and buy today?
Flights of fancy like this are rarely rational, so we’ll dispense with strict ground rules for today’s QOTD. While the AAA figure of $773.50 does include the likes of fuel and insurance, assume that Santa is taking care of those, too. Depreciation and interest charges don’t exist in our fantasy world, either.
How long of a term will the jolly old elf deposit this money into your account? Let’s say 72 months, since that seems to be the terrifying new trend in most American dealerships. This is to say nothing of the stupefying 84 month terms or the psychotic 96 month loans your author sees tabulating in ads for FCA dealers around here.
Injecting a bit of realism here: AAA estimates that over $300 of that $773.50 figure is consumed by interest and depreciation. Assuming one spends about a hundred bucks in fuel and maybe half that in insurance, it leaves only about $330 for the actual payment on the note’s principal. Terrifying.
But you don’t have to worry about that. Given our fictional parameters, what would land in your driveway?
[Image: Chris Tonn/TTAC]
Matthew buys, sells, fixes, & races cars. As a human index of auto & auction knowledge, he is fond of making money and offering loud opinions.
More by Matthew Guy
Comments
Join the conversation
'78 King Cobra Mustang. Yeah I said it. So? There's enough left over for an MKI MR2 and an LX 5.0. Plus an IROCz. Insurance and fuel should be low to nothing since I wouldn't be commuting in any of them. And depreciation has about bottomed out on many like classics. There's hundreds of "classic car" specializing dealers that stock the finest examples and no hack job rebuilds. Or maybe a couple supercharged '04 Mustang SVT Cobras. Their prices have about bottomed out too. Or an E30 M3 adjusted with mileage or condition for budget. Or an NSX. The mind boggles. C7 ZO6? Grand National (not GNX)? Mclaren Mustangs? Early four-eyed Saleens? Yeah like $14K for an excellent condition/minty '78 King Cobra with 50K miles. Their prices will only skyrocket from there! Or actual "Cobra" kit cars. Same thing. Do they still make them? What about Porsche Speedster kit cars? What's the cheapest air cooled 911s?
2019 or 2020 Chrysler Pacifica Touring L with the "S" Package!
Tesla Model 3. Ideally the Performance model (dual motors, AWD, big battery, heavy-duty inverter for track duty, etc.). I suppose I could go for a luxury SUV, but I don't feel like I'd be welcome in that club... I'm not a football star with a dog-fighting kennel, a foreign-born mobster running gold & guns & girls, or a retired Wall Street exec who combines the wardrobe of Mr. Rogers with the personality of Adolf Hitler. (Sorry if I'm a bit cranky about that vehicle segment -- clearly I have spent far too much time driving in Los Angeles lately.)
For the purposes of the game, I'll say TRD Avalon. It would be sublime to drive most of the time and infuriate deranged people. If anyone wonders why car ownership was higher sixty years ago, it was due to post-war economic impacts and because cars only lasted a few years. New car customers traded in every three years and received as good as no residual values. Expenses went down as cars got better and then progressive destruction of our educational institutions elected Obama, who made the newest cars the worst on average.