How much of your net worth does your car represent?

[travelover]

......... And I don't think he talked them down much, so probably paid close to full price.

Lowering the cost would defeat the purpose of bragging rights to a ridiculously expensive toy.

 

[RE2Boys]

Fun thread. We're in the "few percent" group like many here. Met a guy other day bragging about the $50,000 he spent on a pickup truck. I didn't know that was possible.

Hell, I added up all the cars I bought for myself (not counting wife) over the last 30+ years and the total was less than $50k - most I ever spent for my car was around $8,000.

Suspect I'll finally break the $20K barrier next time I purchase a lightly used vehicle. Last purchase was for $17K. A 2011 minivan purchased in 2013 with 8K miles. Come to think of it, paid $17K for my 1995 minivan in 1996, the same for my 2001 in late 2001, and a 2005 in late 2005.

 

[nuke_diver]

Not going to do the math/research but very little since we have no cars from this century

I think my bicycle that I bought last year is worth close to 1/2 of what my car is worth (bike cost $1600). I do have >2500miles on the bike though so I believe I'm getting my money's worth.

 

[stepford]

Either folks in this thread have some seriously high NW's while driving some seriously crappy cars or else folks are having problems with placing the decimal point. I'm seeing lots of percentages in the .01% range - which means (for example) an old beater car worth $1K and a NW of $10M...

 

[kcowan]

3 cars currently worth under $25k in total. One was purchased new. NW not a factor in our car purchases. One of our rare extravagances.

 

[sengsational]

Either folks in this thread have some seriously high NW's while driving some seriously crappy cars or else folks are having problems with placing the decimal point. I'm seeing lots of percentages in the .01% range - which means (for example) an old beater car worth $1K and a NW of $10M...

I thought I recall seeing a post that indicated NW's here centered in the $2M range. $200 KBB value is pretty low! But I had a real nice Mazda, everything worked, kept in the garage always so looked nice, but only fetched $600 (needed engine work due to leaking oil was the only reason I ditched it).

When I saw the .01%, I presumed it was 1% (or the person just 'shot from the hip' instead of doing the math).

 

[rodi]

I didn't give my percentage originally... But mine is less than 1%. I did the math correctly. (division then multiply by 100) Our cars are reliable, but old... so the depreciation is fully kicked in and they'd bring in less than $15k combined.

Tentative plan is to let the kids drive the (then) over 20 year old truck. It's super reliable but not gas efficient... so they'll be motivated to do chores to earn gas money. We'll purchase an all-electric car at some point in the future when we put in solar panels... That's 2-3 years out - about the time the older son will be thinking of getting a license.

 

[Sea Kayaker]

My 15 year old "beater" truck, with 17 year old "beater boat" on top.

Yes, I look after my "stuff".

 

[ArkTinkerer]

Mine are mostly "antiques" as defined by the state. I don't figure them in net worth. I don't owe anything on them so I don't count as liability either. I figure them as tools I will use until they go for parts or recycling!

 

[samclem]

Tentative plan is to let the kids drive the (then) over 20 year old truck. It's super reliable but not gas efficient... so they'll be motivated to do chores to earn gas money.

We had to make a similar choice about DD's first car--I have a reliable old Camry that would have fit the bill. But, new drivers crash cars, and they get hurt. Their judgement and driving skills just aren't as good as an experienced driver. The car I had was small, had no airbags at all, etc. So, we helped her buy a car of her own, provided it met certain criteria: 3000 lbs min, good injury and crash test ratings, etc. She ended up getting an 8 YO Taurus with side airbags, etc. So far, so good.
Maybe not the perfect approach, but the one we took.

 

[robnplunder]

0.02% when bought new. Never bought a luxury car. Besides the house, this is the largest LBYM item for us.

 

[Sunset]

OK, against my better judgment, I'll take the bait. As you stated yourself, vehicles are assets. How quickly they depreciate does not change that basic fact. Cars are not, as several people have asserted in this thread, "just an expense like electricity." The money you spend on fuel, insurance, repairs, maintenance, taxes, registration, interest on a loan, etc... those are expenses. Even the depreciation in value is an expense, although most individuals don't use the accrual method of accounting in their personal finances. But the value of the vehicle itself is an asset. As such, it belongs on the balance sheet. Net worth is just a personal version of a company's balance sheet, subject to many of the same reporting expectations and measurement criteria. See AICPA SOP 82-1.

Now... you certainly may choose to exclude it from your own personal net worth calculation for whatever reason you want. The most common legitimate reason for this is immateriality, as evidenced by most, but not all, of the answers on this thread. I exclude cars from my current NW calculation for that reason. But if I went out tomorrow and converted $50K cash into an F-250, yes, I would include it, as my financial position at that moment is unchanged by the transaction.

I also see people on this forum make comments like, "I don't include my house in net worth because I have to live somewhere." Same issue, only more problematic because house values are generally material to NW. And I think in both cases, the problem is derived from the fact that this is a forum dominated by topics about retirement planning. Generally, what the person really means is: "I don't include my house in the subset of assets from which I expect to derive retirement income because I have to live somewhere." The problem stems from a simple misunderstanding of what is actually meant by net worth, which is much closer to aja8888's description:

I think you will have to include some "goodwill" in your NW as well for your educational input here.
However, if you "converted $50K cash into an F-250" your NW would probably decrease by 5K immediately due to transfer costs, and instant depreciation.
Otherwise I agree, just my vehicles are so worthless, I think I have a painting worth more than they are, and all that stuff value is easily overwhelmed by the daily stock market variation.
So my vehicles are more of a rounding error value.

 

[lorikmt]

If my calculations are correct, our cars amount to 0.0006% of net worth. Both are Hondas, one a 2001 and one a 2002. I hope they still have a lot of life in them because I'd like them to last longer than we do. They both still run great and look pretty good, too.

 

[stepford]

0.02% when bought new. Never bought a luxury car. Besides the house, this is the largest LBYM item for us.

Unless we're talking about a Schwinn I suspect a NW of 5000x the cost of any new vehicle should put FIRE within one's reach.

 

[38Chevy454]

I am certainly an outlier as compared to the rest of you. I have a lot of valuable vehicles, so in total they account for a good portion of money. Just guessing, approx $200K worth. I could live very well for several years off the money if i sold them.

But most of my vehicles are classics and actually go up in value. They do not depreciate. I also do not really consider their value in net worth, they are my hobby and are not income producing like savings. Someday when I am too old they will be sold or some are planned given to family.

Vehicles are not just an appliance to me, I drive what I like. Nothing like driving one of the old cars to put a smile on my face. Having valuable vehicles is my choice. Funny thing is my more daily driver newer cars do fit more in line with FIRE mentality: 1997 Expedition, 1988 F-250, and wife's 2008 Edge. All of them are 125K or more miles, but still are all good shape because I take care of them. I am not into new cars that have high depreciation costs.

 

[lemming]

12 year old Volvo. And no it doesn't have a Kerry bumper sticker on it. not even a
Visualize Whirled Peas sticker-and I love that one.
Now the envelope of money carved out for a replacement is over 3% but that is a gleam in my eye for a couple of years.

 

[Cobra9777]

Either folks in this thread have some seriously high NW's while driving some seriously crappy cars or else folks are having problems with placing the decimal point. I'm seeing lots of percentages in the .01% range - which means (for example) an old beater car worth $1K and a NW of $10M...

If my calculations are correct, our cars amount to 0.0006% of net worth. Both are Hondas, one a 2001 and one a 2002. I hope they still have a lot of life in them because I'd like them to last longer than we do. They both still run great and look pretty good, too.

Well, I see 4 possibilities here, lorikmt:

1. Your net worth is around $800,000,000, which seems unlikely since you're driving two 12-year-old Hondas.
2. Your two Hondas combined are worth about $12, which seems unlikely since they "run great and look pretty good, too."
3. You read stepford's post and decided to make a subtle ironic joke, which seems unlikely since you only used 3 zeros.
4. Your math is not correct.

I'm going with #4.

Speaking of subtle ironic jokes: The other day my friend was claiming that I don't understand irony... which was ironic because we were at the bus stop.

 

[foxfirev5]

<1%. Two 10 year old cars. Bought new and maintained very regularly. We plan to keep the Chevy another year or two and the Lexus as long as it holds up. My experiences the last few years with tech loaded company cars has increased my reluctance to upgrade. For instance the GPS/Radio goes out and the heater won't work. $2k later and it's still a POS.

 

[eta2020]

My optimal transportation would be something like Prague metro/Prague Trams: 5 month ticket costs about 45 dollars for people over 60.

That would represent nearly nothing from my NW and allow me to have few beers on the way home .

BTW it is one of best Public Transportations in Europe. One thing communists did right.

 

[Amethyst]

I'm no accountant, yet I fully understand the nuances. That's why I say things like "I don't count my house in my net worth..." (as opposed to "you shouldn't count your house...") because it's a personal decision based on my personal situation. Certainly my heir(s) would count the money they could get by selling the house (minus fixing-up costs and broker's fees).

Amethyst

I also see people on this forum make comments like, "I don't include my house in net worth because I have to live somewhere." Same issue, only more problematic because house values are generally material to NW. And I think in both cases, the problem is derived from the fact that this is a forum dominated by topics about retirement planning. Generally, what the person really means is: "I don't include my house in the subset of assets from which I expect to derive retirement income because I have to live somewhere." The problem stems from a simple misunderstanding of what is actually meant by net worth, which is much closer to aja8888's description:

 

[sengsational]

I'm going with #4.

Here's how one would check the math.

Say you come up with 0.02% and you want to validate it's right.

First convert to a decimal =(0.0002)

Type that into your calculator and hit "1/x" =(5000)

Multiply the result by the value of your car, say you spent 12K on a new economy car =(60,000,000).

So that example says the net worth is 60 million.

 

[CoolChange]

RV + car < 1.5% of current net worth

This % is currently declining because of auto depreciation and portfolio growth; I am hoping for (but not expecting) the portfolio grow to take this % down to some of the infinitesimal numbers posted in this thread.

 

[nash031]

I've never included cars in NW calculations, because at no point do I intend to retain/get the full value of the car. In other words, drive it until the wheels fall or or it's totaled, in which case I'm just getting some portion (trade-in) of the value.

If I did right now, I'd estimate that our 2007 Infiniti G35 (78,000mi) and 2004 Acura RSX (132,000mi) are 1.7% of our NW.

 

[Retire2013]

Less than 0.01%

 

[Dash man]

0.8%


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