Hold on a second, this can’t be right. $689 per month for how long, 5 years? Is this for real? Unfortunately . . . it is.

The year was 2011 and I had the itch to drive something fun. I’m a car guy and didn’t have one at the time. One of those enthusiast car forums was showing a 2007 Audi RS4 for sale by owner. Anyone who is familiar with cars knows of the RS4 and how special it is. So I found this beautiful dark blue one for $35,500. Now this was a $70k car when new, so $35,500 is a great deal. We’ll get back to that “great deal” later. I decided this was what I wanted. All I had to do was meet the owner and hand him the cash. Pretty simple right? Wrong.

Audi RS4

Here’s the problem with bringing cash to pay for the car, you need to have cash in order to bring it. Okay, not a problem, I’ll just get a loan. So I met the owner at my bank to complete the purchase. And that’s how I very easily acquired this incredible Audi, and my incredible $689 monthly payment. In case you haven’t done the math already, $689 x 60 months (5 years) comes to $41,340. Which means my car now cost $5,840 more than the sale price!

This isn’t sounding like a great deal anymore.

The worst part is, I didn’t even need a car, let alone one as expensive as this. What was I thinking!? But who cares, right? Let me tell you, this Audi was fantastic. The sound, speed, handling, everything about it was pure brilliance! 420 horsepower in a small four door sedan makes for a very fast machine.

dscn2294

After four and a half years of ownership, I decided to sell the car. It was in storage a lot because I lived in the city and took the trains everywhere. Except for a few months when I paid for a parking spot in my building. ($235 per month!) I ended up selling it to a friend for $20,000. Sure I probably could have gotten a few thousand more, but it needed brakes ($3,000) and I felt the timing was right to just git rid of it. Not including repairs, maintenance and storage fees, the car cost me $21,340 for those 4.5 years. Considering someone paid $70k to buy it new in 2007, the $21k I paid was really a bargain to have the opportunity to own a car like this.

So what’s the problem? What did I do wrong?

The problem is that I took out a loan, to buy a car I didn’t need, with money that I didn’t have. Buying this car or any car like this should not have been an option. Why are banks lending money to people like me? So we can buy fancy cars, boats, houses and other things we can’t afford while they collect interest. I’m not saying people shouldn’t buy nice cars. I personally would love to have a Porsche 911 in my garage someday. What I am saying, is that I will never buy another car unless I can actually pay for it. Not only that, but my bank account better be multiple times larger than the price of the vehicle, otherwise forget it.