I paid cash for a new pick up in 1987. A Chevy, Still got it. I have had small rust fixed twice and last year I bought a new bumper and had all the lower panels painted. Looks like new. The bumper and paint job cost $2,500.00.
If I finance $25,000 for 5 years at 6% my payment is $483.32 and I get the privilege of paying $28, 999.21. That's $800 a year. So, for 5 month's payments on a, not as nice, new pickup, I get a new looking pick up, all paid for.
In 2002, I bought a 1996 Cadillac with 29,000 miles on it for $11,000. Now it has 65,000 miles and still good. I'm gonna keep it till It has at least 250,000 miles on it. I'm good at saving and I don't need or want an ego car. My Northstar will burn the tires going uphill, so I guess I don't need more power.
My big expense is health insurance, almost $1,200 a month for wife and I, plus about $300 a month for uninsured medicine and co pays. So our life outlook is different.
I will borrow cash to buy real estate improvements, but never land. I want positive cash flow in the area of 10%. I'd rather drive an old car and make a down payment on a piece of rental property. With a car we have depreciating assets. With a house, we have appreciating assets. Depreciating assets are okay if we are heavy on appreciating assets. I hate to see people with few or no appreciating assets, with no passive income streams, just a job, load up on depreciating assets. Just a job for income is the bottom. Buying depreciating assets is a very good way to stay there. Rationalizing an unwise decision has only given me a rationalized bad decision.
