Before I was addicted to real estate, I was addicted to cars. At one point, I had owned eight cars over a 10-year period. And out of those eight cars, one was considered a luxury automobile: the Mercedes G500. Buying a G-Wagon in 2002 was one of my biggest financial regrets.
Thankfully, once I became hooked on real estate, my addiction to cars faded. It no longer made sense to pay a lot of money for a car that depreciated in value. Instead, I wanted to plow as much time and money as possible into real estate to live better and potentially make more passive income.
My frugality with cars lasted up to 2017 when our son was born.
For three years prior, I drove a silver Honda Fit I had leased for just $235/month. He was an amazing car who could fit in about 25% more parking spots in San Francisco. For twelve years prior to my Honda Fit, I drove a 2000 Land Rover Discovery II I bought for $8,000 in 2005.
However, in December 2016, I decided to buy a 2015 Range Rover Sport which had only 10,300 miles on it. The paper-thin doors on the Honda Fit were too worrisome for me to use for transporting a baby. If something were to ever happen to him in a car accident, I would never forgive myself due to a misplaced desire to save money.
As a result, I paid $58,000 cash to a private seller who had the car originally listed for $65,000 at an Audi dealer. I still drive the car today.
If you’re usually frugal but are considering a luxury automobile purchase, let me share a surprising benefit of driving one over the past five-plus years.
Definition Of A Luxury Automobile
Before we begin, let’s define what a luxury automobile is.
In my opinion, any car that costs more than 50% of the average new car price is considered a luxury automobile. I interpret the word “luxury” to mean something you don’t need, not so much luxurious amenities, such as leather seats and an amazing sound system.
Therefore, back in December 2016, when I bought my current car, it was considered a luxury automobile since the average new car price back then was about $35,000. My car brand new was closer to $73,000.
Today, the average new car price is roughly $40,000. Therefore, a luxury car starts at $60,000 and up.
The Surprising Benefits Of Owning A Luxury Automobile
I didn’t buy a Range Rover Sport to show off. I mainly bought it because it was a bigger car to better safeguard my family. But I will admit I liked the look of the car and how it drives.
I’ve been a big fan of Range Rovers since I was a middle school kid in Malaysia. Hence, if I was going to buy an SUV, I might as well buy the one that I was also most excited to drive. Nostalgia is a powerful force.
Besides the benefits of improved safety, more room, and greater horsepower, here is the one benefit I did not foresee.
Nobody Questions Whether You Belong
During the pandemic, my son and I decided to explore all the playgrounds around San Francisco. In total, we discovered eighteen new ones, many of which were remodeled.
One of our favorite playgrounds turned out to be a private playground in a neighborhood of $2.5-6 million dollar homes. It is located in a valley that has a nice field with newish play structures. We liked the playground the most because it was often empty and not windy. It felt safe and was also within a seven-minute drive away.
Only after a month of going to the playground did I notice a sign at the end of the field that said “Private Playground – Members And Their Guests Only.” I never knew private playgrounds existed in the city until then. How strange!
Once I saw the sign, I was faced with a dilemma. Do we keep coming back, even though we don’t own a home in the neighborhood? Or do we move to a different playground that wasn’t as nice or as safe?
Decided To Violate The Guideline
After doing some research about private playgrounds in San Francisco, I realized the neighborhood had a racist history!
“When it was established in 1912, XXXX neighborhood had a clause specifically prohibiting people of “African, Japanese, Chinese or of any Mongolian descent” from owning property in the neighborhood.”
Well, that’s just terrible. After learning about the neighborhood’s exclusionary history, I decided we would definitely be returning many more times. It was my act of defiance.
Further, I thought it would be nice for the mostly Caucasian families at the playground to see our Asian and mixed faces. In a way, I felt like I was helping them assimilate and raise more aware children.
Another reason why I decided to go back was that I don’t mind confrontation. If someone were to come up to me and ask whether I lived in the neighborhood, I would just tell them “no.”
I was curious to see if anybody had the guts to confront me about peacefully playing in an empty playground with my son. Then I wanted to hear what they had to say. Then I could write an insightful post about the encounter! How fun would that be?!
It’s been a pleasure to share some of my experiences as a minority living in America. And as a writer, I’m often looking for new stories to share.
A Car’s Signal To Others
Because I drove a car that blended in with the other cars in the neighborhood, I didn’t feel like I would be bothered. After more than 100 trips to this private playground, nobody has once asked me about where I live.
When you drive a more expensive car, rightly or wrongly, people will make assumptions about your wealth and status. Therefore, the biggest surprising benefit of driving a luxury automobile is feeling more welcome. And when you feel more welcome, you feel more confident, which can set off a positive chain of events.
Seriously, a big part of succeeding in whatever you want to accomplish is feeling like you belong. Therefore, if you have greater self-belief, your chances of winning also increases.
No Longer Getting Stopped At The Gates
When I drive around the city to compete against various tennis clubs for the USTA league, I don’t get stopped at the gate. Instead, they just wave me right through.
However, when I drove to these same clubs in my Honda Fit, I was stopped about 50% of the time and asked what I planned on doing at the club or who I planned to meet.
When I was in middle school in Malaysia, my dad drove around in a paintless 1976 Datsun with only one hubcap. I was mortified to be seen in the car every time he drove me around.
But I do remember getting waived through at the guard’s entrance to the Royal Selangor Golf Club, despite our beater. We were arriving as guests. I had thought we would surely be stopped and questioned. However, our red diplomatic plates rewarded us with immediate entry.
Feeling more welcome might be one of the best feelings of them all. Like in the show Cheers, who doesn’t want to walk into a bar where everybody knows your name? And as parents, all we want is for our children to be accepted for who they are.
The Dangers Of Driving A Luxury Automobile
Besides not wanting to waste money on a depreciating asset, the other reason why I hadn’t bought a luxury automobile since 2003 was due to my desire to follow my Stealth Wealth principles.
I grew up in emerging countries that often had carjackings. For example, in Manila in the 1970s and 1980s, you would read in the news about drivers getting their fingers and hands chopped off by motorcyclists so they could steal their jewelry!
I have no desire to attract attention, which is also why I tinted my windows black and got a black car. I just want the safest automobile I can comfortably afford that is also fun to drive.
The other concern about driving a luxury automobile is attracting road rage. If someone was to kick or smash my car due to road rage, I wanted the cheapest car, not an expensive car! Expensive cars can sometimes attract hate, especially from some holier-than-thou cyclists.
Thankfully, it turns out drivers are less aggressive against larger cars. It must be the logical fear of getting injured more by a larger car in a car accident. Further, if you can’t see clearly who is driving due to tinted windows, you might be stirring the hornets’ nest!
Please contain your road rage, especially as a parent transporting a child. You just never know what might happen.
Drive A Car Because You Like It, Not To Impress Others
When you’re in your 20s and 30s, perhaps a big reason for driving a luxury automobile is to impress others. But as you get older and wealthier, you don’t really care as much. The novelty of driving a sports car or a fancy car eventually wears off.
So long as you follow my 1/10th rule for car buying, no car will ever blow your socks off for very long either! It’s only when you spend way more than 10% of your annual gross income might you start getting this lasting thrill (and dread) of owning a luxury car.
I plan to own Moose II, my Ranger Rover Sport for 10 years. 10 years is the ideal length of time to own a car. Once January 1, 2027 rolls around, I plan to buy a new luxury automobile.
Surely by then, cars will have better safety features and more amenities.
No More Car Addiction
I realized one final thing about cars that you might realize as well as you get older. One of the reasons why I no longer have a car addiction is because I can buy just about any car I want now. But it’s actually the desire to buy a sweet ride that’s out of your financial reach that makes cars so fun!
Once you’re able to buy whatever car you want, you no longer desire cars so much. It’s like reaching the peak of one mountain and moving on to conquer another.
However, I’m capped out with what I can buy when it comes to houses. Hence, the real estate FOMO can sometimes rear its ugly head if I spend too much time looking online.
As you get older and wealthier, owning a luxury automobile becomes no big deal. You’ll start driving it because you like it, not because you want to impress others.
And for those of you who would like a little more love and acceptance from others, driving a luxury automobile might actually give you what you want. However, in the long run, the most important person to want love and acceptance from is yourself.
Reader Questions And More
Readers, do any of you own a luxury automobile, defined as costing 50% more than the average new car price? If so, did you feel bad at first paying so much? What are some of the other surprising benefits of owning a luxury automobile?
Related post: My Favorite Mid-Life Crisis Cars To Buy
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A Surprising Benefit Of Driving A Luxury Automobile You Might Not Realize is written by Financial Samurai for www.financialsamurai.com