When I graduated from college, it was a time of excess. People were still riding the euphoria of the Dot Com boom and trying to "live it up". With the Dot Com bust came the few lucky employees who made it out big and investors trying to find a safer place to store their stash. This is when I believe the housing boom really started. Dot Com scared investors because it was something intangible, something foreign to them, but real estate is a real asset, something everyone can understand, as well as something that is tangible.
I still remember hearing on the local radio station where two relatively young guys were promoting in their 30-second advertisement the virtues of interest only loans. Their pitch was real estate is a real, tangible investment and interest only allows you to get "in the market" whereas you otherwise may not be able to. Several years later one of my friend bought into a newly developed townhouse complex in Santa Clara. There was no negotiating, but fortunately development companies also do not sell to the highest bidder, I actually remembered he told me he had to sleep in his car to make sure he was one of the first group in line to ensure he was allocated a home for the "cheap" price of $700,000.
Either way, during this time there were a lot of individuals who lived "high on the hog". There was plenty of lavish lifestyles that was established either through debt and/or as a byproduct of being involved in this new bubble. It was frowned upon to have an used car, and everyone bought fancy and new.
Fast forward to 2009 and 2010. My, how times have changed. There are still wealthy individuals who are around (I am, after all, living in Silicon Valley) but in large there is no more 20 year old pimping in a car or house they can't afford. In fact, people have become much more thrifty nowadays. This may be in part because most of the younger generation as well as many of my colleagues no longer have a job and are unemployed, but I think this is a change for the better.
I have inadvertently became frugal as well. There is no denying that I love sports cars, and for a good portion of my life post college I have owned some of the most sought after "non-exotic" cars out there. I have always lived by the term, "you can either afford it or you can't", and have been fortunate enough to been able to afford those cars. In retrospect, it was probably a really dumb decision from an investment/ financial perspective.
Recently, my gf and I rescued a Doberman Pincher from the local SPCA. It was pretty obvious that I didn't think through the adoption because I was planning on carting around a 70 lbs dog with a Porsche 911. With my ownership of the car reaching 4-years and 80,000+ miles on the odometer (the car had 27,000 on the odometer when I purchased the vehicle), I decided that it was time for me to get a new car. The last reason that put the "nail in the coffin" was the unnatural fascination my newly acquire dog had with the German leather. What I didn't realize was how suddenly my vehicle would be sold. There was the usual tire kickers that came around as well as the nickle and dimers (neither you should deal with). On a side note, if the potential buyer is already trying to look for a bargain, or trying to negotiate with you on the taxes of the vehicle, chances are he/she is stretching to own that car and they are not a realistic buyer. Most real potential buyers are upfront on what they see as a fair deal and will stick by that number, or meet you halfway. They won't be trying to take $500 off here and $250 off there. At the end of the day, this isn't a garage sale, right? I also wrote an article on how to sell your car if you're interested.
Because of those individuals, I was not expecting my car to be sold anytime soon. A prospective buyer reached out to me when I was away on business to look at my car, I welcomed him to look at the car as much as he wanted since it was parked in a car port. What I didn't realize was he reached out to me when I returned from my trip and bought the car from me by the end of the week. Now I was stuck, on a Friday, in my office with no car.
My parents were gracious enough to provide me a loaner to tie me over while I find my next vehicle. This vehicle was the car that my parents had intended to leave for me when I returned from college. It was a 1996 Volvo 850 Turbo. When I first graduated, I felt no self respecting college graduate would drive that car -- it was a soccer mom mobile! Over the years I had periodically "borrowed" that vehicle when I was between cars but never had the car for any extended period of time. This time around, it was for keeps.
The beauty of a 14-year old car is that there is suddenly no more car payments (if you finance your vehicle), very little sunk cost, as well as dirt cheap to insure. As the owner of the vehicle, I also didn't really care where I parked or fear damage to the car, since it's so old it's not worth much. This actually made my weekends more fun because I now can explore areas where I would not have gone to with a "nice" car. Lastly, you will never, ever wake up in the middle of the night wondering if your car is okay. You may, instead, wake up wondering if your car will start tomorrow.
End of the day, finding a cheap, used car as a commuter is a very smart financial decision.
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