7 Reason’s To Drive Cheap Used Cars In Your 20’s

Cheap used cars are not sexy. They will not turn heads on the street. What they will do is make you rich and teach you life lessons!

In America we love our vehicles. Often in our 20’s we look at someone with a nice car and think they must be doing really well. There is an image of success associated with a nice ride. While there is nothing wrong with owning a great vehicle, I am so grateful to have owned cheap used cars throughout my 20’s.

My current car is a 2006 Subaru Legacy with 137K miles on it. I live in Colorado and this thing crushes the snow. Many times, I have driven by larger fancier cars that have been spinning out while my go cart glides over the ice with AWD!

At first, I drove my car out of necessity now I drive it by choice. My car is now worth less then what I put away in savings and investments every month! Full disclosure I am in a two-car family my wife owns a 2012 Subaru Legacy. We even plan to upgrade her ride in 2019 to a luxury vehicle…crazy right!

I will keep my little beast for as long as I can though as our second vehicle. Check out 7 reasons why driving cheap used cars has been a blessing in disguise for me in my 20’s!

1.) Keep Your Ego In Check Daily

Creating a financial plan and sticking to it works! My wife and I started out with a vision of what we wanted to do with the money we earn and have been making the most out of it since graduating college. It is easy to login to the investment accounts and do a monthly net worth tracking update and feel like a genius in this bull market.

I would be very naïve to believe I know it all this early in my investing career! This is where my little beast keeps my ego in check each morning. Getting into my car I remember where I started and that I need to check the ego and work hard during the day.

2.) Learn About Cars in A Clueless World

My generation is savvy when it comes to technology but not so much when it comes to cars. When you pay someone else a premium to drive a new ride every three year’s you won’t ever deal with car issues. How will you learn about how your car works?

Driving cheap used cars, you will eventually run into issues. Learning what causes these issues is a life skill that you can keep forever. Not only will you know what is going wrong when something breaks, but you will also know how much it should cost to get repaired. Never get ripped off again by car dealerships or mechanics!

3.) Cheap Insurance & Registration

This one is self-explanatory cheaper car = cheaper ongoing costs. Each year your overhead stays low to stay on the road. Registration will be based off the value of the car I paid $86 dollars last year.

As far as insurance goes you can shop for a great rate. You are insuring yourself from medical bills and hitting other people’s cars more so then your car at this point.

4.) No Car Payments

No car payment = more money in your pocket. Seeing a pattern here? More money flows into your pocket every month by driving a cheaper car. Make sure this extra money finds its way to debt pay down or investments.

5.) Learn the true meaning of “big hat no cattle”.

It is so easy to get a new car if you want one. If you have a couple thousand dollars you can leave the dealership with a new ride and a large monthly payment. Most of the cars on the road are owned by banks.

If you don’t have the title to the vehicle you don’t own the car. About 43% of the entire adult population in the U.S. have auto loans. So, when you are driving around realize that just because your car is not the nicest on the road you may have more “cattle” then the person in the nice car a lane over.

6.) Make sure that girl or guy you take out likes you!

Want a true test of love, pick up your hot date in a cheap used car. I may be biased as I have already locked down my dream girl, but I would not want someone judging me on my car. If you have a great time and he/she calls you back, you may have found a keeper!

7.) Learn to appreciate what you have and stay motivated for what you don’t.

As the years go by I have really come to appreciate what I have. My car is no different, it has taught me a lot. Each day I am grateful that I have a high-quality car that has run for all these years. It motivates me to keep working hard for my goals down the road.

One day I will drive a new ride and my car will be in the junk yard. Hopefully I will have a great appreciation for the new car and will have learned a lot from my time driving the beater. If you are in your 20’s and motivated to get ahead I would recommend you drive cheap used cars for as long as you can.

What Are Your Thoughts?
  1. What type of car do you own?
  2. Did any of the points hit home with you?
  3. When do you plan to upgrade from your current ride?

Spread The Wealth!

51 Comments on “7 Reason’s To Drive Cheap Used Cars In Your 20’s”

  1. I think cheap used cars are sexy… for my balanced dividend investing 🙂

    Nice summary, DM.

    All good points. Cars can have a significant drag on one’s investment capacity. I don’t view a car as an asset or include it in net worth calculation.

    On your other questions:

    1. What type of car do you own?

    – None. I haven’t owned a car since May 2007 when I sold my car after graduation before moving to New York City. It was a beauty though – a 1999 Honda CRV with a custom-installed passenger seat interior armrest. That’s right – I had the future Mrs. BD’s best interest in mind. The car is likely the reason she first went out with me senior year of college 🙂

    2. Did any of the points hit home with you?

    – #5; I thought that figure would be hire for how many people in the US have auto loans.

    3.When do you plan to upgrade from your current ride?

    – I’d like to defer owning a vehicle as long as possible. CTA (Chicago Transit) is decent and Chicago is a walk-able city for where we’re living. If needed, we use uber, use zip-car, etc.

    1. Haha, thanks Mike.

      Pretty jealous of your no car scenario! Living in Colorado the freedom a vehicle brings is great to get up to the mountains. I would defer owning as long as possible in your shoes as well. I drive about 7k miles a year at this point in my old beater.

  2. Lol I wish my fiancé and I knew better before… when we graduated from school, we went out to finance a second hand bmw at 2% (4 yrs old at that time)… even got a family member to co-sign it. Yikes! >.<

    It was all paid off a few years ago (4 years pmt + down).

    Though it was used, I think we could’ve made a better decision at that time. What’s done is done and we learn from it… ‘til this day, we still keep our little baby… we will drive it down until it’s on her last legs. what’s surprising is we haven’t had too many repair problems, but who knows… a bad one may pop up soon… *fingers crossed*

    1. You live and you learn! You are doing something right if you haven’t had many problems with a BMW. I have heard some bad stories on those bad boys. They are great cars when they are on the road though super fun! I would own an M3 if I was not in accumulation mode.

  3. I have heard lots of issues with BMW’s too!

    My ex boyfriend (who I bought a house with, yes I know, red flag) bought a used BMW convertible with the HELOC on our home. When we split up I think he paid it off, but yeah, that wasn’t a good idea in hindsight on my part agreeing to that.

    I had a used 2000 Honda Civic that lasted me forever. Our family car is a used Mazda CX-5 (husband declined to jump into the Toyota Sienna or Honda Odyssey minivan route just yet haha jk jk jk)

    Wasn’t it in The Millionaire Next Door that most millionaires own Toyota Camry’s?

    1. I think it was Camry’s and F-150’s. I do not intend to drive really cheap cars forever. When you are young though it is such a budget killer. The dollars you can put away now are worth so much more as well then the dollars you put away later in life. Down the road I will drive whatever I want but for now I am grateful for my old little car.

  4. Hey DM, I drive a 2009 Camry with 135K miles. My wife drives a 2006 Corolla. We bought them both new, but think we have gotten our money’s worth. We will keep them until the cost of maintenance justifies a new car. We have never bought used, but should look into it more for the savings it provides. I like having older humble cars. I don’t have to worry about them getting dinged and nicked up. Tom

    1. I would say you have gotten your moneys worth! I don’t think there is anything wrong with buying new. Heck cars are just some peoples thing and they should be enjoyed once you have reached financial independence. While I am still dependent on a 9-5 as a portion of my income I will stick with older cars.

      Down the road I will drive whatever I want as it will be small potatoes in the big scheme of things.

  5. I have been pretty good about staying away from cars I can’t reasonably afford. Except for the time I went and bought a brand new car with $0 down!

    #6 – Haha, I had this new sports car on my first day with Mrs. Widget and she didn’t care! That was a good sign but still hurt since I thought it would impress her!

    Feels much better to now be driving cars that are paid for and were reasonable with respect to our income.

    1. Lots of people tend to have that first whoops happen. My now wife leased a new jeep with her first job, was not the end of the world just a learning experience.

      You had the opposite of most for #6! Sounds like it all worked out for you two!

      Having no car payment is something I will never go away from, less money going out the door every month is a huge win.

  6. Hi DM, We have never bought new cars. I still drive a 1993 work truck with 435 k. It might not be pretty or environmentally friendly but it gets me A to B. In the past I buy 4-5 year old cars and drive them till they die.

    1. Holy cow Steve! 435K miles that is amazing you have to be very handy. You are even more extreme then I think I will be!

      I think it all comes down to figuring out what your goals are and then working the car choice into them. At the end of the day its a car and a luxury in life.

  7. Hey DM!

    Certified Pre-Owned cars are a cost effective way to make the move from beater to a nicer car. We have saved a bunch buying those the last couple of cars.

    What are you and the Mrs thinking about in 2019?

    1. Looking for something that is a notch above practical but still holds its value well. Still not sure but something that we can really enjoy while we own it but also wont drop like a rock in value.

      I need to check out the CPO route. I am glad that it has worked well for you!

  8. Hahah love rule #6. Good choice on the Subaru, they are beasts. My wife and I both drove affordable used vehicles in our 20’s. Now I drive a 2012 F150 that I bought new. I plan to drive it until the wheels fall off. Kind of a necessity for us in the upper midwest where we get dumped on with snow. Nice article man.

    1. #6 will save everyone out there a lot of time in a relationship! I love my Subaru it really is great in the snow, here in CO it at least melts away!

      Stay warm, and happy new year!

  9. Great post and about the perfect timing for me! I am close to buying my very first car (at the age of 27) and many people around me, try to convince me that a new car is the best way to go. Right now, I am coming directly from the college and I don’t want to start the cycle of paying auto loans every month until I get a new car.

    However, I work as a freelancer and there are some tax considerations where a leased car may is more reasonable for me. I will check this with my tax advisor in January and either go this way or buy a used car.

    One thing I like to add. I really enjoy driving newer cars because they are in general a little safer. That’s why I will probably buy a more premium used car first. I guess my car will also carry my children in some years, so I want to take care of this fact, too.

      1. Hi DM,

        thanks for that link to MMM. I like to use calculations to stop me from having biases. However, I’m not just talking about a safer car by the size of it. I was referring to the new safety features. Recently, I needed one of my dad’s new car and this has maybe saved me from a crash. It’s not a big deal right now. When I carry my children it is. But well, this also doesn’t mean that I will look for the safest car (a tank or so). I will just not only look at the price tag and try to make a good trade-off.

  10. My cars during college were an ‘89 Tercel hatchback that burned as much oil as gas, and an ‘86 Jetta diesel that wouldn’t start when it got too cold (I live in Canada so that could be a problem). Glad I didn’t drop big dollars on cars then, but I did buy a new car (with payments) a few years into my career. One of the biggest financial regrets I have!!

    1. Haha I can relate to the cold here in Colorado! I think that getting a new car at the start of someones career is really common. My wife signed up for 3 year lease when she first started working. It was an expensive luxury, but not the end of the world. We saved up to purchase a car in cash for her at the end of that one and we haven’t had a car payment since!

      I think until someone doesn’t have a car payment its hard to see how nice it really is. It takes time but if everyone would be disciplined they can eventually out right own whatever it is they drive.

      Happy New Year!

  11. Yep, saving on cars and houses (or rent) are the fastest ways to get ahead. I drove ugly old beater-uppers through most of my late twenties and thirties. Mostly station wagons as they have all the cargo benefits of an SUV but are way better on gas and maintenance costs. My best two buys were a Ford Escort Wagon with 82k miles for $3000 (it had a dent but I didn’t care), and a Ford Focus Wagon with 68k miles for $5000. I got 11 years between those two vehicles for very low cost and they were reliable. Plus they hauled my bikes, kayaks, and camping stuff like champs!

    1. That is a solid return on those vehicles! So amazing how much you everyone can save when they cut back on the big things. Now I am sure you have the choice to drive whatever it is you want.

    1. Yep, I would want to make sure my kids were in something safe as well. My parents helped me with 3k for my first car and I came up with the rest. I think it was a good way of doing it I cared about the car because I worked hard for it.

      Crazy how I choose to drive a cheaper car now as an adult.

  12. I really liked this article. I purchased my previous vehicle for $1500, but moved to Utah where the 2WD pickup wasn’t going to cut it. Now we have a 2014 Subaru and a 2015 Toyota, and although we paid for both of them in cash we agree that we’re going back to the ~$10k price range in a decade when its time to switch again (maybe longer as I only put about 5k miles on my Suby thanks to a nice bike with studded tires for winter commuting).

    The thing about cars is that no matter what you drive it will just end up feeling like your car in a couple of months (at most), so having something reliable and cheap leaves more room for things that won’t lose their shine (like an epic trip with my kids). We also realized that the logic we used for the new cars (“we need reliable cars because we have little kids and don’t want to deal with the shop”) was a bit flawed. While the days of the $1500 car are done for us for this reason, it’s likely that an 8 year old lower mileage car would have had maybe only a day or two more in the shop than our new cars over the past three years. The only question left for us was whether to sell the new cars now that we have them, and we’ve decided to just drive them until they are done since we know they run great and we invest $$ up front to keep them in perfect shape.

    1. That is awesome you bike in a lot of days! I am around the same mileage on my Suby at about 7k a year. Would be really hard to give up my car when it works so well and helps propel me forward with all my goals.

      We are in the same mindset with experiences over things as well! I would much rather see new parts of the world with loved ones then drive a luxury car to work each day.

      Nothing wrong with enjoying newer cars. I am positive there are many people that are more extreme then me about this and would say NO CAR! It all comes down to what works for the individual and I am thankful I held onto my Suby. Knock on wood I hope it takes me into my 30’s as our secondary car.

      Happy New Year.

  13. What Are Your Thoughts? So many thoughts. Since it’s close to noon, most of them are centered on lunch. Oh wait, you meant about the post…

    What type of car do you own? Silver Betty is a 2005 Pontiac G6. I got her brand new as my company car then bought her three years later for wholesale price with an auto loan I paid off in two years. She is my baby and I love her.

    Did any of the points hit home with you? Point 7 hit home for sure. I don’t know about #2. I know nothing about cars. I pay other people to maintain her. As for point 4, I’m starting to realize that the money I would spend on a car payment is now going to repairs on an annual basis. I’ve spent over $1300 this year to make SB feel better when she’s been sick. Luckily everything has been fixable, but the maintenance costs are definitely starting to add up.

    When do you plan to upgrade from your current ride? I want to drive my baby forever, but if that cannot happen I will likely upgrade in the next two years. I either want a VW Passat or a Benz. I plan to pay cash and buy a 3-4 year old car so someone else takes the majority of the depreciation hit.

    1. Haha I hope you got lunch!

      There is certainly a point when you have to move on and repairs start to get crazy. Luckily I have a really great mechanic that is a good guy and just wants to be paid a reasonable price. Subaru parts are fairly cheap so I purchase the parts and he slaps them in. It has helped me keep my costs low this far.

      Sounds like a good plan for when you are ready to upgrade! Thanks for sharing.

  14. I had a guest come last night who had just purchased a brand new Honda Civic. He said he got a great deal and he did (considering a new car). But he would have saved thousands buying gently used. I didn’t bother explaining my side though because he was so excited and I didn’t want to rain on his parade.

    1. I always just support everyone once their mind is made up. At the end of the day its everyone’s choice how they maneuver.

      Seems like your guest is moving in the right direction with a Honda though if they can hold onto it for a long time! I like taking a look at KBB depreciation schedule by year for different types of vehicles. Shows you the sweet spot for when it might make sense to buy.

  15. I don’t think there was a more exciting time in my life than the first month after I submitted my last car payment. That $367 monthly payment was then immediately applied to our investments!

    I also realized after I bought my brand new fancy car that I am not really that into cars…Why I bought it, I will never be able to answer!

    Great post!

    1. Hey at least you have a good car now. When someone gets focused on their finances I think it becomes more exciting to put that money to work instead of into something like a car.

      I am not really a car guy either but can understand why people are. At this point in my life though I am with you I love watching the extra money build for the future. I can turn into a car guy later and buy in cash!

  16. I have 2013 Toyota Prius C that was new and we paid in full at the lot. Before that was a 2000 Honda civic and made 4 years worth of car payments for it. With those experiences we are going to buy used cars going forward(if it’s necessary of course) for the reasons you mentioned and plus it depreciates once it’s off the lot.

    1. A Toyota new is a great car to buy as well if you are in a position to do so. The cheaper way is not always the route you have to take if you have the funds and want a new vehicle.

      Buying used though you will for sure save more in the long run if that is the #1 priority at the time.

  17. You nailed it with this post. My favorite part…”Make sure that girl or guy you take out likes you!” Hahaha. I drive an 06 Altima. I’ll replace it when it’s no longer worth repairing or if we truly need a larger car often enough that it’s worth getting a new one.

    1. Hey you clear out a big majority of candidates real quick these days! Takes the right lady or man to look past the ride and at the person.

      When a car is that old and still running well it is paying you! Like subsidized driving!

  18. Try driving your teenagers around in a beater 98 Honda civic, ha ha, that’s keeping young egos in check daily! And hopefully giving them an appreciation of delayed gratification 🙂

    1. I think that is awesome! Not being spoiled as a kid is a huge win.

      The lesson of delayed gratification will last a lifetime, good for you.

  19. I love it. We drive a 2003 Ford Escape and a 2005 Grand Prix. Both are paid off and we love not having a car payment. Our plan is to upgrade the Grand Prix to a minivan this fall for our growing family.

    I think my favorite on your list is making sure a guy or girl actually likes you. Definitely got a nice chuckle out of that but it’s kind of true, haha.

    Thanks for the great stuff!

    1. Have to run some tests to see if they actually are into you.

      That sounds like a great plan. Congrats on the growing family.

  20. Learn the true meaning of “big hat no cattle”.

    Hah, love this!

    I drove a 2007 Civic, my wife drives a 2007 Grand Caravan. We won’t be in old cars forever but we’re well past the whole borrowing money to buy vehicles thing.

    1. The more years that pass the more I realize how foolish that is! I agree with you on not being in old cars forever. We are all working for SOMETHING what that something is we must decide.

      Thanks for checking it out.