Kevin and Sam recently wrote great pieces about the taboos around money and revealing how much you make. They opened up a good discussion on why salaries are generally kept quiet and not revealed in daily conversation. But what about how much you spent on a car? For many people a car is seen as a major income indicator. Do the same taboos apply?
People can guess what you spent
One main difference between what you spend on a car and your salary is that people can actually see the car. They can make an educated guess about what you paid whether you tell them or not.
Justified or not, people tend to make snap judgments based on the type of car you drive. If you drive a high-end luxury car like a Porsche or a Mercedes assumptions are made that you have a lot of disposable income. On the other hand, if you drive an old beater some people assume you can’t afford much more.
Of course they don’t really know whether you can afford what you drive or if you’re up to your eyeballs in debt. But the reality is that many people see your car and assume things like how much you get paid and your financial worth.
What if people can’t guess, do you share the price anyway?
Sometimes what you spent is not so obvious. Did you know that even some family cars like the GMC Acadia or an Acura MDX can run 40-50 grand? And any car can become expensive when you pick a high-end trim and load it with options. Depending on how well you haggle and how much you load onto a car, you can pay up to 15 thousand more than some else.
Or maybe you have a sports car at home that you don’t drive to the office. Do you tell your coworkers about it? Do you want jealous colleagues that question how you spend your money? John and Jane have the same position, but why can Jane afford that fancy sports car? Maybe Jane saved up her money and didn’t go out to dinner three times a week like John did, but the perception is that she must be paid more.
In all these cases, is it a mistake to advertise what you spent?
What if you overpaid?
Some people spend a ton of money on a high-end car because they think it’s a sign of status. As crazy as it sounds, they’ll actually pay more for a car so they can brag about it.
Personally, I don’t care how much money I make, I’d be embarrassed to let people know I overpaid for a car I could’ve gotten cheaper. If I decide to buy a luxury car some day, you can bet I’ll hammer that price down until I get the best possible deal, no matter what type of car. By the way, if you are like me and worry about paying too much for a car, this TrueCar review explains how to determine what is a reasonable price for any car based on current market statistics.
What if you got a great deal?
On the flipside, what if you bought the same exact car as your friend but you paid $2000 less? Would you share that information and make your friend feel bad? Maybe they didn’t work as hard as you did to get a deal? Or they didn’t wait for the best time to buy a car to time their purchase for the most savings. It’s one thing to give advice and help a friend save money before a purchase, but it’s another thing entirely to rub their face in their mistakes after the fact.
The advantages of keeping car cost to yourself
As much as I’d prefer it not be the case, what you spend does affect perception. People make judgments based on the kind of car you drive. If you keep what you paid to yourself you can avoid unwanted speculation about your financial status. It also helps you from looking like a fool that overpaid or allows you to spare your friends the same feeling if they overpaid themselves.
You may not guess it, but for me, car price is definitely a taboo subject, just like salary. Outside of my blog, I’m a bit secretive with money matters. Online I want to help people save money and get deals so I’ll use facts to help relay concepts. But in the real world, I’d prefer to keep my financials to myself. I just don’t want to be judged based on my spending habits. And in the end, if your car gets you from point A to point B, who cares what you drive?
What do you think, is it ok to talk about how much you paid for a car? Is it taboo? Or, since the price of a car is so easily found on the internet anyway, it doesn’t really matter?
Photo: A $500,000 Ferrari in the middle of China where per capita GDP is $3,800/year, 2011. Sam.
I know my 11 year old truck is the oldest vehicle in my offices employee parking….But I keep my mouth shut….
Doc, one of my cars is 11 years old too and I’ll keep it as long as it’s cheaper to maintain than to replace.
My cars lately have been pretty boring so it really isn’t much of a worry because I don’t think anybody really cares :) But, when I owned some cool cars in the past I would tell the price if someone asked but I wouldn’t go out and talk about it out of the blue.
I’m right there with Beagle- if someone is brave enough to ask, then I’ll usually share. I still drive a Tahoe I bought 13 years ago (most people don’t ask about it), but our ‘family’ car (the one my wife normally drives) is newer & nicer. It does seem like my in-laws are more interested in how much we spend on things than anyone else. A very competitive group…
Beagle & Dave, I agree, if someone comes out and asks I’ll share details, but I won’t advertise if it doesn’t come up.
Yes and I had people tell me I paid too much. We did book value research and learned we paid a little bit under and still the mouths keep flapping.
If you want to get a second opinion on your decision, it is ok to tell people what you paid! If you do your research well, that won’t be necessary.
Of course, there is no antidote for bragging! :)
Jai- Isn’t it funny when people point out your mistakes and they’re wrong?
MC- No anti-dote for bragging….I like that, a shame it’s all too true.
Coach,
Since it’s your domain, you can probably get a bead on what people spent better than most, heh. I drive a Saab 9-3 Convertible which no one knows how to value without looking it up (well, the parent company is bankrupt now, so look at book value and cut it in half). The wife drives a Jeep Liberty.
We do tell people if they ask, only because I know we negotiated hard (and if you want to know, message me privately, haha) and got good prices for both from everything I’ve read.
Good article, hadn’t thought about it!
PKamp- My car is an 11 year old Saab convertible too! Oddly enough, people see it and perceive it to be an expensive luxury vehicle, when in reality I probably couldn’t get more than 2k for it…..and every little repair is insanely expensive (so I postpone ’em cause together they cost more than the car is worth :)).
I wouldn’t discuss car price because it can vary so much! You could haggle a dealer down and pay much less. Besides being jealous of the income, if you got the car for a low-ball price, that could raise eyebrows of the asking party as well.
I am proud of my old (17 & 15 year old) cars! They look good and are well maintained. Their values are well known. Cars (except for a Ferrari) do not make you money. Soon, I will replace these cars with something newer. Will I look more successful? I would rather have the funds working for me.
Living in LA the whole, “Your car tells your salary,” couldn’t be further from the truth. Here we call it, “Living the illusion.” And so many people do so it’s hard to tell who’s doing well and who’s purchasing expensive cars but living in a dump. I love my almost 7 year old Element. It’s boxy, and yes even sort of ugly, but well taken care of and almost paid off (yippee!) I’m not in a hurry to replace it. Oh, and in my apartment garage, there are several 80K to 100K cars.
LH- It’s amazing to me that some people would rather drive well than live well……I’m quite the opposite. In fact, if my wife would let me, I’d dump the car and get a motorcycle or moped instead!
I had a few questions about it when I bought it new, and I was not at all ashamed to tell how much I paid (somewhere around 22k). People who knew me weren’t surprised, and people who ride in the truck would soon figure out I didnt spend extra for things like power locks and power windows.
I like to talk the dealer down on the price too, because they’re already making a ton of money just for one car even if it’s below retail. So I think it’s reasonable that we, the consumer should get the same treatment when buying back, if not close to anyway.
Aaron, yup, dealers still pull in the profits even when cars are sold cheaply. Now that car prices are so readily available on the Internet, dealers have very slim margins on the cars themselves…..where they really make money is on the back-end in the Finance Dept.
Honestly, I see it as an asset to keep your cards to your chest. I drive around a beater, and I love the fact that it looks like I can’t afford more. My husband, on the other hand, drives a mustang. Atleast it is paid for!
Amanda, I agree, sometimes driving a beater or a car that doesn’t look expensive can be a plus…..especially if it makes you less of a target for car break-ins.
To be honest, the subject doesn’t really come up very often. Other than when I first get it and my parent, brother, and bosses inquire no one else bothers to ever mention it. If someone asked me, I can’t see not telling them, though.
My current vehicles are all over 10 years old. We will keep them as long as we can.
If it was a cheap car, I wouldn’t mind sharing at all. I don’t worry about people judging me for not wanting to spend a lot on a car. However, for an expensive car, I probably wouldn’t say. I think that those who want to figure it out could look it up on the internet. But there are probably still a lot of people that don’t know how much some cars cost, and I wouldn’t want them to know, either.
I am chuckling. No one has ever asked us. Of course our cars are a honda crv 2003 and isuzu trooper 1998. Not cars others are too competitive about, even though we bought both new with no financing!!
I’d share if asked, but I wouldn’t volunteer it. Our vehicles are a 2004 van and a 2006 Ford — nothing spectacular! But they’re paid for, that’s all I care about.
We’ve spent $45,000 on two vehicles over the past 5 years (paid for now). I think that’s a lot, but I talk about it because I’m ashamed. People in my family spend that much on one vehicle, and I just shake my head. I think new cars are the quickest way to guaranteed poverty.
Wow, that is a lot! But, if you’ve got the money, then why not?
Only live once!
I’m with John! People around me (including my boyfriend) are all driving really expensive cars. Of course, to me, really expensive is anything over $20K. Because of those car purchases, I think we’ve lost many opportunities to build wealth. But, I’ve definitely realized my mistake and my BF has too (although we’re keeping the car..even though I feel like it’s way too expensive, we need cars to get to work in LA). Oh well, you make mistakes and you try not to repeat them. Thankfully my car is getting close to being paid off!
I have no problem telling people how much we’ve paid for cars. Our two most recent purchases were craigslist specials, which were great deals on 10ish year old SUV’s.
On the flip-side of this question, I even go so far as to ask others what they paid for a car! I don’t see the big deal. I ask in a polite way, of course.
How ’bout the people who have no idea the amount they paid for their car, but can brag about their “low” monthly payments that they get to pay for 5 years!
Matt- I find that entertaining as well. I know too many people that mistakenly think low monthly payment = good deal.
I don’t think it’s a taboo, I’ll talk to anyone about how much I paid for my car (8000something) how much I owe on it (zilch) and how much it costs to maintain (almost zilch) I think talking about it is a way of helping others become educated about the costs of car loans, car and what you can and can’t afford.
I own a business and some family members have laughed at my intent to keep driving my car, regardless of my income, until it’s no longer driveable. Makes for great discussions I think!
Much like Andrea, I have no problem sharing how much I paid for either of my cars because it opens the door for a great discussion on debt and needs vs. wants. Sometimes I get laughed at because of my old (paid for vehicles) but It gives me a chance to share how I paid them off and how little it costs me to maintain them.
Andrea & Matt, If I could drive my current car for another 20 years I would in a second (althought I don’t think it will last). I love that sweet-spot of 5-7 years after a car is paid off where you hopefully don’t need to spend much in repairs and you have no monthly payments!
I don’t get the opportunity much but like Matt said, when I do I don’t mind sharing as it leads to a healthy discussion from which I can learn. Of course, I tell my family because they are not reluctant to ask.
I’ve shared that I paid $3500 for my 97 Camry on my blog but in real life I don’t think anyone has ever asked me how much it cost. When you have an inexpensive car people aren’t that interested in the price.
This is a fun topic, Coach. I tend to be very private about sharing any sort of financial information. What I love most about my hybrid Honda is that it’s paid off, and I hope to drive it for many more years. But if I’m being really honest here, even though I love living more simply I have to admit that occasionally I see a Lexus or Mercedes and feel a little pull… :-)
I can understand the pull….I get the same feeling when looking at 60 inch screen LED TV’s!
I don’t mind telling my friends how much I paid for the car. We are now driving a boring Mazda 5 mini van so nobody bother to ask. :) Someday we’ll get a little convertible again….
I rarely buy cars so I haven’t had much occasion to share the cost, lol. I’ve bought seven cars in the past twenty five years, all used, most cost $2000 or less, and of those, three are still in daily use (we bought our son’s car for him and he paid us back but technically it was one that I consider to have bought). My 1996 Nissan Pathfinder was the most expensive, six years old when I bought it, if I remember correctly it cost just about $15K. It served me well until it recently caught fire, okay I thought it was on fire – S.M.O.K.E. billowing out of the air vents = fire in my book. It had over 350,000 miles and my husband is planning to fix it eventually. Now I do love to share the deals I get on clothing, especially when I come in to work looking like a million bucks and my outfit was made up from $3.99 per item from Savers or Goodwill. Or if I got a great online deal buy one get one free, etc.
I’m currently carless so I have no car cost to reveal but I am happy to share that I pay for an overpriced bus pass! Even though I’ve been on many a bus and feared for my life, overall I’m quite happy with the public transit in my area so I can’t really complain. But if I did own my own car, I wouldn’t feel comfortable talking about how much I paid unless a close friend looking to buy a similar car really wanted to know. I’d probably buy a low end one as I’m not into fancy rides!
I tell people because it’s never a huge amount, and I always pay cash. I don’t think it’s taboo at all. Now, if I started buying Land Rovers and BMWs… then maybe I wouldn’t mention it.
I don’t mind discussing it, since most people can figure out about how much one paid for a typical car. If asked, I have no problem telling people that my last car was driven to over 220,000 miles, and that I wanted to extract everything out of it before it fell apart. Not sure I’ll do exactly that again, but regardless we might as well be upfront with who we are!
I wouldn’t mind telling people at all how much I paid for my car. Some people think it is a status thing to have a fancy car and tell me that they sure paid some big bucks for it. Really? I’m supposed to be impressed by the fact that they were stupid to overpay or fail to negotiate? Oh wait….I live in Los Angeles and that should already explain itself.
Oh, I brag about how much I got my car for. I got a great deal. It was through a dealership, too! I also don’t view cars as a status symbol, although I understand that society as a whole does.
Every time I see a flashy car on the road, I immediately think they bought it off credit just to show off. I realize many people are able to afford these expensive ‘toys’ but if you think about it, most people that do drive their fancy new cars add to the amounts of debt they are probably already in. I don’t want to dock the ones that can comfortably afford boats, ATV’s and cars, because my goals are to achieve this myself, but I will never buy overly expensive toys just to brag and share to neighbors and friends what I paid for it.
I don’t think car price is taboo. If someone can afford $20K, $30, $40K, $50K or more on their cars, good for them. I know I personally don’t want spent too much money on cars even if I can afford it. I will spend the money on safety, reliability and meeting my needs (so 4 to 5 year old card are fine by me but anything older then probably not as I am not handy and know nothing about cars). One friend has a brand new (back in 05) Lexus i350 while my car is 8 year that I bought used. Her parents gave it to her as a grad gift when she graduated from university (her parents bought a car of the kid’s choice for all the three kids). I think her family (particular parents look at it as a status symbol). Her parents work 7 days a week in their family restaurant so yes they can afford it but her parents work super long hours. Personally, if I was in her (or her siblings’) shoes, I would rather my parents take a vacation verses buying me a new car or put the money away so they can retire earlier.
I used to not tell anybody about anything I spent on my cars. However, now that Moose is worth maybe $3,500… I love to share. It’s like a badge of honor now! :)
The only time I have mentioned how much i paid for my car was when I was trying to make my brother drive carefully in it. Other than that, its a luxury car and I was foolish when I got it, but even then I got a great deal on it. In my line of work, sometimes image plays a part.
P.s I love how Sam named his car, too. Mine is named Bentley- no, its not an actual Bentley.
I was going to write that I drive a 10 year-old-truck, but it’s the new year. So, I drive an 11-year old truck. As long as it gets us around. This year, I may even tart it up with a bed liner and tool box.
I’m thinking of ‘tarting’ (sorry Centavos I had to steal that line!) up my 10 yr old Jetta. She’s the youngster among our cars.
It may be taboo for some but I’m a mouthy kind of girl that talks about salary and how much I spend on just about everything during a cocktail party.
I HAD to have my Jetta. I justified it saying it would get great gas mileage since it was a diesel. Mike drives a piece of crap 1995 Honda Civic that he got for $2,000 about 3 years ago. He drives like grandma going 20mph where ever he goes and so gets 40 miles to the gallon. Also he hasn’t put more than $1,000 in it. The Jetta on the other hand gets less than 40 miles per gallon (come on! I’m a zippy driver!) and we’ve put several thousand dollars in her. My defense for spending too much on the car was I wanted something pretty…that was it. Now all I want is a piece of crap 1995 Honda Civic.
I agree that your car can tell a lot about your financial situation, but that’s not always the case. I personally don’t see a big deal in telling someone what car you drive or how much you paid (if they ask). I work hard and I want to enjoy what I have worked for.
I would have to say that it defiantly depends on the type of people that you are taking with. Among good friends I think talking about car price is totally acceptable but outside of that inner circle I would say that it is best to avoid the subject.
We have had various cars in our lifetime and I find it interesting what people thought we earned based on what we were driving. We now have my favourite car we have ever owned, just a Camry but I love it.
I think if people ask I am happy to discuss, but won’t say anything otherwise.
My Dad had a friend who I was told was pretty well off. He drove a 20 year old car, lived in the house him and his wife bought when they first married etc. One day I saw him driving around a flash new BMW and he had always said how against flashy cars he was. As it turned out his work forced him to get one as part of his salary as the position he had it was deemed unacceptable for him to be driving his old car and it was either get the BMW or lose his job. That I think sucks.
For me..I haven’t tell any one except my wife about my income. For car, entire office know the cost of my two cars.
[…] we don’t have any traffic in Santa Fe and neither one of us minds discussing how much our cars cost. Are we really that […]
I drove a 1997 Geo Metro hatchback from 1997 until June 30, 2009, when my wife finally convinced me to get a small SUV. I was VERY proud of the Geo. My wife… not so much. But to answer your question, I don’t hide how much I paid but I also didn’t keep the window sticker on…
As you can probably tell, I’m not a big “car guy.”
Thanks for the mention, Geoff! I have read on the blog “Overcoming Bias” about how a lot of this is mostly just status signalling — birds have colorful feathers, deer have antlers, … humans have flashy and expensive cars. ;) So, it’s not totally irrational but it depends on who you want to attract and what you want out of life.
If I paid $2000 less than a friend and found out after the fact, I would not rub it in my friend’s face. That is just salty and it hurts. ;)
Up until Tuesday, I had a 24 year old car, which was always the oldest and junkiest one in the parkade at work. It broke down, and I bought a newer car, only 4 years old.
If somebody asked, I’d tell them how much it was, and I’ll be writing a post about my car situation for next week, so if somebody read my blog they’d find out. But I wouldn’t offer up that information right away.
I’m really not one of those people that cares as much about what I drive, just that it’s reliable. Even if I was a billionaire, I wouldn’t drive a Ferrari, so I am not much for showing off with cars. I bought a Honda Civic so practical and reliable is all I want!
24 year old car? I may be one of the few people who thinks that’s actually pretty cool. Nice job getting as much value out of it as you could. My badge of honor was driving a car to over 220,000 miles, but it was only 12 years old if I recall right. There was too much driving happening back then!
I’m so excited to find this post. I’m a frugal Mom blogger of 3 kids. My husband and I are huge fans of good used vehicles. We currently have 5 cars, each one for a particular reason. All of them are over 12 years old. The oldest being 18 years old. None of them look it, most of our friends think they are newer. I have to say we do sometimes tell how much we paid, if asked, but most of the time don’t. The reason being they were expense to begin with! They include different brands like Isuzu, GM, and Mercedes. We haven’t ever had a car payment in over 4 years and hope to never have a car payment again. I’m so proud of the fact that we paid little for our vehicles and we only have to make minimal payments for maintenance some of which my husband does. We enjoy our vehicles and we can save up for our other goals. I love my Mercedes!
l am living in Southeast Asia. In here, spending a year worth of salary to a car is common. In general, in here we consider if we can afford the monthly payment, it considered we can afford it.
l recently bought a 1300 c.c compact car, at almost a half of my annual income. l know this is a bad spending but l have no other way to do it.
Except cars, other cost of living are not so expensive. If we choose to dinner out, for our family of four, for the decent menu, this will cost us about RM25 to RM30. ( or worth at about 25 cans of Coke, in the graphical economic representation )..