What Does That "New Car Smell" Really Cost?

What Does That New Car Smell Really Cost?

As an Investment Advisor/Financial Planner, I often hear, “I know I should be saving/investing more, but I am doing all I can!”  While that may be true, sometimes a few lifestyle changes can make all the difference.

Take buying a new truck versus a used truck for example:

Looking at the Ford website, a 2023 Ford F-150 XLT goes for $65,910.  If you finance it over 6 years, or 72 months, you are looking at a $915XX per month payment – assuming you pay zero interest.  In turn, looking at Carfax®, I found a 2019 Ford F-150 XLT with only 24,000 miles on it for $39,498.  If you finance it over 6 years or 72 months, you’re looking at a $548xx per month payment (again assuming you pay zero interest).

The difference in a new truck versus a used truck is approximately $367xx per month.  Let’s set aside $67xx for interest and repairs (it is a used truck); and only save/invest $300xx per month, or $3,600xx for 6 years.  Using the calculators on my website: www.frontlinefinancialsvc.com, Calculators/Savings Accumulation; and assuming an 8% rate of return:

$300 per month or $3,600 per year at 8% for 6 years = $26,409

Now let’s assume you repeat this process every 6 years, purchasing a newer, used truck at 6-year intervals, allowing you to continue to save/invest at $300 per month, or $3,600 per year:

Investing $3,600 per year for 12 years at 8% = $68,318

$3,600 per year for 18 years at 8% = $134,821

$3,600 per year for 24 years at 8% = $240,353

$3,600 per year for 30 years = $407,820

What does that new car smell really cost? 

Buying a new truck every 6 years versus buying a used truck every 6 years cost you over $400,000 over your lifetime.

Saving and investing is not hard, it just may take a new way of looking at your budget.  For more on this look at the articles on my website: www.frontlinefinancialsvc.com, “Start Here”/ “The ABC’s of Investing”, “The 70/30 Rule”, or “The Power of Time”

Please remember all calculations were based on assumptions and do not guarantee future results.  They should be used only to demonstrate how a little lifestyle change could impact your future.

Please call us at 866-469-6501 to get your very own Investment/Savings plan.

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