By Josh – Listener Submission.
According to Wikipedia, the average income in Australia is $66520 AUD (Yes This isn’t peer reviewed so we can’t tell if it’s completely accurate. However it’s a useful guideline to be considered). The car enthused average Joe also has a real life to attend to with a spouse and/or spawn-lings (Children). Due to these distractions and modest income, the average Joe simply cannot afford to put all of his income into a car. As the boys stated in the latest episode of the podcast (EP17 at the time of this writing), cars featured in car magazines are usually new, sexy, fast and ludicrously expensive, which the average Joe cannot afford.
What can the average Joe afford then? Most people can only afford to own one car. On top of that space is expensive in Sydney and not everyone is lucky enough to have enough space to park two cars. The car then has to be fun as well as practical. Also because of the aforementioned spouse or spawn-lings, it is not possible to save more than 10k a year. Around 1/12th of the annual income in a double income household or 1/6th of your annual income if you are flying solo. After 3 years of saving up, you end up with 30k, which is enough for a base model Toyota Camry.
However, chances are you don’t want a Camry because although the Toyota Camry is a very good car for getting you from A to B trouble free, the Toyota Camry is mostly purchased by people who don’t really like cars (with a few exceptions) and treat them as a white good. The biggest problem though with the Camry is that it is usually bought in bulk by big companies for their fleets, which means that it depreciates faster than its competitors.
Which brings us on to its competitors like the Mazda 6 (which is the benchmark of this class), Subaru Liberty (2.5, of course, the 3.6 is 40k) and the Korean twins namely the Kia Optima and the Hyundai Sonata. All of these options are fine and they all may depreciate slower than the Camry. However buying new would mean a large percentage of its value will be lost the moment you drive it off the lot, like all new cars.
Actually, come to think of it all new cars suffer a large depreciation when you drive off the lot, so you don’t really want a new car as well. However since you won’t know how the owner treated the car before you, a second-hand car might have hidden issues (such as being written off before or bad finance). However if you look deep enough, through classified you can find yesterday’s darlings for the price of a base model Camry. Thanks to depreciation cars such as BMW M3, Audi S4 and the Mercedes-Benz E55 AMG can now be had for under 30K. Is it too good to be true? Absolutely, as many nobodies on the web say, “If it’s too good to be true it probably is” these cars are no exception. They will probably be a nightmare to maintain and cost a fortune to keep on the road, but on the occasion that it works it will be all worth it.
Actually, unless you absolutely have to drive to work or school, public transport is a better option. To an average Joe a car is a luxury, an emotional decision as it is hard to justify owning a fun car logically. In this case there is no right answer, so why not just buy whatever takes your fancy and be happy with what you own. Considering a car can be considered a depreciating asset, an average Joe may not be able to afford to lose 20K over 10 years of a cars life. That 20k may be better spent now and into the future.
In the end the only advice I can give is to just buy whatever you want, other opinions can be damned. Unless you only need to get from A to B, buy a Mid-Sized saloon like the Camry. However if you love cars don’t just settle. There are plenty of cars out there that can be had at a bargain that will be great as a daily driver and as a track darling. Remember the most sensible choice (a Camry) isn’t always the best or right choice for you.
This was a listeners submission! Thank you Josh, it has been a pleasure working with you and we look forward to your next submissions!
If you wish to make a submission too, you can email us at email@example.com.
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