Among financial celebrities, Warren Buffett is frequently touted as one of the most reliable voices. He’s an investor who is widely respected across the financial profession and offers plenty of frameworks and strategies that burgeoning savers and investors can emulate. He is famously frugal and lives in the same home he purchased in 1958. In 1962, he made his first million, and now has an estimated net worth of roughly $150 billion. Many would expect him to have moved into fancier digs, but his home, and another particularly visible asset, cars, remain modest additions to his collection of things.
Cars, Buffett has told numerous outlets throughout the years, are something he simply refuses to spend on exorbitantly. Even with enough money under his control to buy or launch a new car brand, Buffett has long seen cars as an area of waste. “The truth is, I only drive about 3,500 miles a year, so I buy a new car very infrequently,” he shared in a 2014 Forbes interview. At the time, he drove a 2006 Cadillac DTS.
Buffett has never been flashy or extravagant and always seeks to separate needs from wants when shopping, regardless of what he’s in the market to buy. When it comes to a new car, many buyers make the mistake of investing in the vanity aspect of the purchase. Buffett isn’t a buyer who needs to worry about monthly payments fitting into his budget, but his example can translate into a powerful approach for others who do have to carefully balance the books.
Why you should rethink your car buying approach
Warren Buffett is not in the habit of buying brand-new cars. A new model is significantly more expensive and offers a driving experience that is virtually indistinguishable from a well-kept used model. Therefore, Buffet is a major proponent of saving money and buying used. The lower the sticker price, the less you’ll ultimately have to spend on interest, as well. Buying used brings an all-cash deal into greater focus, too, allowing a larger swath of buyers to skip the need to finance the purchase altogether.
However, the price of the car isn’t the only issue Buffett takes with the purchasing experience. The time required to research and negotiate is another burden that the Oracle of Omaha finds frustrating. He won’t start shopping for a new vehicle unless there’s genuine value to be gained by jettisoning his existing ride. Until that day comes, he doesn’t think it’s useful to shop around.
Naturally, the choice to invest in a new vehicle feels like a big one. The average driver owns their vehicle for around eight years, making this a selection you’ll likely have to live with for quite some time. Yet the more time you spend browsing, the less time you have for other things. By stretching out the time you keep vehicles, you’ll gain additional years to save for your next purchase, as well as precious time.
