As somebody who’s planning to purchase a brand new automotive by 2025, I’m having second ideas. With the typical new automotive worth at virtually $50,000, it looks as if solely the wealthy can purchase new vehicles immediately!
Give it some thought. In case you comply with my 1/10th rule for car buying, you could earn $500,000 to purchase the typical new automotive. Nonetheless, a $500,000 family earnings is the beginning of a top 1% income!
Even when a brand new automotive purchaser violates my 1/tenth rule and spends 20% of their annual gross earnings on a automotive, that also means they earn $250,000 or extra a 12 months.
Under is the brand new car common transaction worth chart by Kelly Blue Ebook by way of January 2023. As you possibly can see, the typical transaction worth is $49,388, up 5.9%, or $2,768 from a 12 months in the past.
In distinction, the typical worth of a used automotive is about $27,000. A $22,388 unfold between the typical new automotive worth and common used automotive worth is important.

Proudly owning A New Automotive Is An Indicator Of Wealth
Primarily based on the typical new automotive worth in 2023, proudly owning a brand new automotive is one indicator of wealth. In case you want more status, then personal a mean new automotive! Individuals may deal with you with extra respect.
Nonetheless, should you consider in Stealth Wealth, then proudly owning the typical new automotive isn’t going to occur. You don’t need to appeal to undesirable consideration within the land of envy and thieves. Consequently, you rationally drive an older automotive that’s cheaper.
In fact, you possibly can additionally purchase a cheaper-than-average new automotive, like a Honda Civic for $25,000 and never be thought-about rich. All of it is determined by your age when the brand new automotive is bought.
In case you’re shopping for a brand new Honda Civic for $25,000 at age 25, you’re thought-about wealthy. However should you’re shopping for a brand new Honda Civic at age 60, you’re thought-about comparatively frugal. In spite of everything, the median income increases with age.
Therefore, should you’re shopping for the typical new automotive immediately, hopefully you’re over 50 years outdated and/or have your retirement financial savings squared away. In any other case, you could be working for for much longer than you want.
New Vehicles In all places Is A Bullish Indicator
Sadly, I drive between 40 – 100 minutes a day as a result of faculty and sports activities actions. I dislike driving, however there aren’t any environment friendly transportation alternate options for teenagers.
I at all times discover new vehicles all over the place once I’m driving. And every time I see one, I multiply the estimated automotive worth by 10 to reach on the driver’s potential family earnings. I’m in awe of how there are such a lot of high-income households.
Rush hour site visitors can also be unhealthy in San Francisco. Even with the work-from-home motion gaining reputation within the Bay Space, site visitors continues to be horrible.
However sooner or later, to assist my temper, I modified my mindset.
As an alternative of getting aggravated on the super quantity of metropolis site visitors, I began to get impressed. Heavy site visitors means enterprise is booming! And when enterprise is nice, which means I ought to be capable of earn more passive investment income to remain free.
Go site visitors jams! Drivers who double park on busy streets rock!
The media likes to give attention to doom and gloom as a result of unfavorable tales get extra consideration. Nonetheless, should you sit in site visitors day by day as I do, you’ll rapidly notice the economic system is doing simply advantageous.
The common new automotive worth of just about $50,000 isn’t sustainable if there isn’t demand. And demand isn’t sustainable if family incomes are usually not concurrently rising.
Perhaps Fools Are Additionally Shopping for New Vehicles
Sure, the wealthy are seemingly the principle folks shopping for new vehicles. However perhaps fools are shopping for new vehicles as nicely?
In spite of everything, the typical month-to-month cost for a new automotive has risen to a report $777, practically doubling from late 2019, based on Kelley Blue Book. Even used fashions have climbed to $544 a month in automotive funds on common.
Nonetheless, name me naive, however I don’t assume a rational American seeking to achieve financial freedom would ever spend a lot cash on a brand new automotive. To assume the typical American is irrational is to additionally assume the typical American is a idiot.
And we ain’t no fools!

Everyone knows new vehicles have the steepest depreciation curve in the course of the first three years. Additional, saving and investing aggressively are musts to realize monetary freedom.
Given 70% of Individuals are disengaged at work, it additionally means 70% of Individuals don’t need to be slaves to their jobs endlessly.
In case you hate your job, it is unnecessary to make use of a big chunk of your financial savings or tackle a $777 month-to-month cost to purchase a brand new automotive.
New Vehicles Priced Round $50,000
Given solely the wealthy can purchase the typical new automotive, here’s a listing of the highest-rated new vehicles priced round $50,000. This manner, we are able to rapidly determine who’s wealthy and who shouldn’t be!
- Lexus ES
- Audi A4, A5, S3, A6
- Volvo V60, XC60, S60
- Volvo XC60
- Volkswagen Arteon
- BMW 2, 3, 4 Collection, I-4
- Acura TLX
- Tesla Mannequin 3, Mannequin Y
- Hyundai Genesis G80, GV80
- Mercedes Benz C-Class
- Kia Stinger
- Cadillac CT5-V
- Nissan Z
With taxes and charges, a few of these vehicles are pushing $60,000. Right here in San Francisco, many of those new automotive fashions are a dime a dozen, particularly the Tesla Mannequin 3 vehicles.
Even my softball acquaintance drives a Mannequin 3. Although he doesn’t make $500,000+ as an educator, he did amass an virtually $1 million position in Tesla stock on margin. Therefore, folks shopping for the typical new automotive have monetary assets apart from their incomes.
There’s extra wealth on the market than we all know.
Ideas About Shopping for A New Automotive For My Household
The explanation why I’m seeking to purchase a brand new automotive in 2025 is as a result of my Vary Rover Sport can be 10 years outdated by then. Primarily as a result of security, I feel the ideal length of time to own a car is when the automotive hits 10 years outdated.
Security options are at all times bettering yearly. Automotive engineers aren’t simply twiddling their thumbs annually amassing a paycheck. Given I’ve to move youngsters, I’m not prepared to drive a automotive a lot older than 10 years outdated.
I’ve pushed a lot older vehicles earlier than. And identical to with owning rental properties, one thing at all times comes up.
Listed below are a few of my outdated automotive failure examples:
- Timing belt on my 15-year-old Toyota Corolla snapped sooner or later.
- Brakes stopped working in my 18-year-old 1989 BMW CSI whereas pulling right into a Finest Purchase car parking zone
- Engine in my 12-year-old 1997 BMW M3 began lurching as a result of the transmission was failing
The spare donut tire in your automotive must be changed each 10 years given rubber hardens and cracks. In the meantime, airbags may not work correctly after 10-15 years.
If a automotive malfunction had been to trigger an accident and injure my passengers I’d by no means forgive myself if I might have afforded a safer automotive. The best time to own the nicest car you can afford is when you may have youngsters.
I’m certain I might drive my automotive till it’s 15 years outdated to save cash given I solely drive about 6,000 miles a 12 months. Nonetheless, it’s in all probability not well worth the danger given I can afford to purchase a brand new automotive sooner.
Will In all probability Nonetheless Purchase A Barely Used Automotive

Proudly owning a brand new automotive is good. Who doesn’t love the brand new automotive odor?! However the depreciation on a brand new automotive is just too dramatic to abdomen. As an alternative, I’ll in all probability purchase a two-or-three-year-old automotive to save cash. Better mental health is likely one of the greatest causes for driving an older automotive.
Personally, I like the brand new design of the newest Land Rover Vary Rover. Too unhealthy it prices about $150,000 reasonably geared up! If I actually need to experience in model, I greatest begin writing more bestselling books.
It actually looks as if solely the wealthy can afford to purchase new vehicles immediately. Are you one in every of them? In case you aren’t, how did you afford to purchase a brand new automotive at immediately’s astronomical costs? Please reveal your monetary secret!
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