Since cars and status are a big part of North American society, and especially in North American business culture, this article has taken some time to transform from idea to publication.

Why?

In my industry (mortgages, leasing, insurance) and related industries (real estate and financial markets), I’ve noticed for years that a ‘nice’ car is often seen as synonymous with success, and I was concerned about how I might be judged by industry people with whom I work to source and service clients. Also, I was concerned that potential clients would learn that I drive a “non status symbol” car, and maybe have an aversion to choosing me to facilitate their debt management and real estate purchases.

So, what’s wrong with my car? To me, not much. She’s almost at 359,000 kilometres and only cost us $950 dollars. I drive a 1987 Volvo wagon with what I like to call distinguishing characteristics. The heater fan has a range of vocalizations from whisper to mad screeching. The doors sometimes need a little coaxing. The air conditioner and heated seats have never been in working order. There’s only a radio with complicated buttons and tinny sounding speakers. The sunroof opens with a crank and one window doesn’t like rolling down anymore. To add to the disarray, I usually have garden and barn “this-and-that’s” in transit in the back. Lastly Betsy, as we call her, has a very big voice. Her arrival into a driveway is usually heralded by great whishing-groaning-whirling from under the hood sounds that may be offensive to some. So, if I’m to be measured as successful by the car I drive, I would fail, using today’s business class standards.

Back in the early 90’s, I sold real estate and I had the same concerns. But times were different then. I was younger and was still in the grip of all the materialism that young people develop as a result of the bombardment of media and social messages about the car as a status symbol. I would borrow my broker’s car when important clients came to town because I didn’t think they’d consider me a valuable real estate specialist unless I kept a tryst with the myth. It was fun to drive his nice car, and I rarely had to explain if it was my car or not. But, it didn’t feel right. Some of the realtors I really looked up to ended up disclosing that they were in terrible financial trouble because of their cars, but didn’t think they could change their image without it having a negative impact on their earnings. Hello … the times they are ‘a changin’!

Here’s why I am “coming out”. I’m no longer in the closet about the car I drive and I want to liberate others from this myth too. In the recent past, I’ve hidden my car around the corner from the homes of prestigious clients when I visited or when I joined realtors at open houses. But now, I’m ready to be real. This inspiration to “come out” and the conviction that I not only want to but am obligated to post about this issue came to me yesterday as I talked to a young couple. They are currently crippled by car payments and unable to buy a home because of their total high monthly payments.

It is time to stop perpetuating the myth that a nice car means success. I wonder who started that anyway. For those of you in your 20s aiming to own a home and those considering carrying debt into retirement, take note that a car payment can extinguish your ability to qualify for a mortgage because of your debt ratios.

It is time to let people know that I practice what I preach. Here are my Seven Tips to Getting What You Want (by getting away from what you don’t want!):

1. Drive what you can afford and what you want to drive.

2. Always put your goals and dreams first to ensure your vehicle costs are not blocking your path.

3. Let the media and society judge however they may.

4. Be totally ok with your choice – from Jaguar to electric bike.

5. Do the math (I can help) and let go of the emotional attachment to hunks of metal and plastic.

6. Whenever possible, pay cash for vehicles and toys.

7. Buy a recently-new car instead of a new one, if depreciation is a concern for you.

Why do I drive an old car?

It is a choice. I sold my beautiful Nissan Xtrail that was costing $900 per month, of which the payments accounted for more than half of that and operating costs took the remainder. The numbers worked, even taking a loss of $4,000 which I put on a line of credit. In the following four months without a car payment, I recovered that loss. Betsy, the old-new Volvo was only supposed to last a year until my husband finished his Master’s degree. Here we are over three years later, and she is still going strong, with minimal cost of ownership. And my husband is doing his PHD now. I’m self-employed, launching my career in 2010 during a down time in the economy. It’s been a slow and steady climb, but I am finally becoming known in the industry and getting great testimonials from clients.

Buying a fancy car with high payments would have meant I’d be out of the game by now, losing a career into which I’ve invested time, money, marketing, blood, sweat and tears. And I can’t even imagine how strained my marriage would be if we had more debt from a car on top of student debt. Further, an unforeseen and prolonged illness reduced my income to a pittance for some time, and I would have lost the car. We named our car Betsy because she is like a dairy cow … big boned, sturdy, white with black trim, reliable as heck, but not very sexy. So far, she’s being true to her name!

One day, I want to own a fun, functional vehicle that is environmentally friendly. To achieve that goal means going on a savings schedule soon, before Betsy is done her years. (Secretly, I’m aiming for Volvo’s million mile club! Those were the days—when cars were built to go the distance, not just to the next edition). I haven’t done the entire carbon-footprint math, but I’ve read several reports that say having an older car (for now) may have less of a footprint than buying a new one.

Years ago, I read a book called “The Millionaire Next Door” which was one of the books that changed my life, along with “You Have More Than You Think”, “The Lazy Investor” and “The Wealthy Barber”. In “The Millionaire Next Door”, author Thomas J. Stanley offered a perspective I’d never heard before: Many millionaires are just the person next door. They drive humble vehicles; clean their own houses, prepare their own food, and have all their neighbours thinking they are not wealthy. But in fact, they own all their stuff outright, often own their own business, and they have great gads of money invested wisely. I wouldn’t mind that one bit.

Do you have a car vs financial freedom story to share? Please Reply below and I’ll post it after an initial screening to ensure it is not a net-troll writing to me 🙂

PS: Thank you to Landsman Volvo in downtown Victoria for awesome and honest service! And to Chapman Motors in Mill Bay for all the awesome used parts when needed!!

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Caroline Lennox
Mortgage Broker and iLease Financing Professional
Invis – Canada’s Mortgage Experts™
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