Cars percentage of net worth?

[racy]

5%? Lamborghini here I come, whoopee

 

[Badger]

I don't consider depreciating or consumable items as part of our NW. That includes our cars, motorcycle, guitars, refrigerator, clothes, food, etc. I do include investments, cash, and house.
Many decades ago all I had was an old car and a stereo. No money. So I guess at that time I would have had a NW of about $500.

Cheers!

 

[Ready-4-ER-at-14]

We include our used older mid and high mileage cars in our net worth but at a value consistent to what used cars were worth before covid if you straight line depreciated them to zero after enough years. Sometimes i used blue book values early on in life.

Currently value them at $7800 but imagine true value today might be 12k or so to replace the better one and think nothing drivable that looks good for under 3k to replace the oldest one.

Am retired, older, and lived through lucrative years in stock market, and real estate market and lived relatively simply getting value for my money so I don't even think I bother updating the car values much any more as more as the cars are just a tool like a hammer I'd fix or replace if needed when a bargain presented itself.

 

[marko]

Always dangerous when I get into numbers, but a high NW with two luxury vehicles could have the same percentage as a low NW with two junk cars, no? Meaningless.

I'm at 4% until the market opens this morning.

 

[HenryD]

Should be a sliding scale as you age IMO, and only include daily drivers. 10% doesn't seem too bad if you are just starting out, but I'd want to see it in single digits pretty quickly.

We're under 0.2% but we're known for having the worst car in the neighborhood. Our kids' high school friends had similar/better rides. I wouldn't count toys. If we did we'd be at 5%, but we'll be living in those toys by the end of the year.

 

[scrabbler1]

Depends entirely on one's age. When I was 22, it was probably close to %100.

Today, it's less than 1%.

You have described my history well, too. When I bought my first car (cash, no loan), just before I turned 23, it was about 94% of my NW. I was living with my parents at the time (for only a few more months) and got a biweekly paycheck a few days after I bought the new car, so I wasn't close to being insolvent or homeless. Seven months later, when I moved out (again), the car was only 50% of my NW.

Six years later, when I traded in car #1 for car #2, the slightly used car I bought represented about 17% of my NW.

Fifteen years later, when I traded in car #2 for car #3 (got nearly zip for the 16-year-old car), the new car represented about 2% of my NW. Today, that 16-year-old car #3 represents less than 0.5% of my NW.

 

[Golden sunsets]

I show the value as equal to whatever the outstanding loan is, so that net worth is not distorted. Once the liability is paid off, the car will thereafter be carried at 0. We purchased a 2020 auto that has a zero% 39 month loan we were enticed to take with a financial incentive at the time of purchase. It will be paid off this August and thereafter not be shown on our financial statement. Our other vehicle, long since paid off, is not shown. The residual value of these 2 vehicles as a % of our net worth is diminimus.

Sent from my SM-T510 using Early Retirement Forum mobile app

 

[ShokWaveRider]

$0 - They simply do not count ... unless you are Jay Leno.

 

[CincyDave]

Car 0.06%.
Whisky 1.12%

There is one bottle worth more than the car. Cheapskate car BTD whisky. Seems balanced

Nice! Party at your house.

 

[Car-Guy]

$0 - They simply do not count ... unless you are Jay Leno.

Regardless of how he "counts it' maybe he should find another hobby...

Here's a "link" to the story (and picture) of him from his hospital bed after getting burned while working on one of this cars back in November 2022.
https://people.com/health/jay-leno-shares-shocking-details-of-his-burn-accident-photos/

And another to the story of his "latest" accident (Jan 2023) where he broke multiple bones that required surgery.
https://www.nytimes.com/2023/01/27/arts/television/jay-leno-motorcycle-crash.html

Always the comedian though as he quipped after this accident: "A 72-year-old man driving an 83-year-old motorcycle. What could go wrong"?

 

[bloom2708]

We have 6 cars (3 teen drivers) for a total of ~$50k. Under 2% of NW.

We have 1 extra car (6 cars, 5 drivers). I have a cheap gas sipper so the Ford Expedition EL only needs to be driven when hauling or towing or 6-8 passengers.

As the kids fly the nest, hopefully this number goes down.

 

[braumeister]

This is a remarkable question to me. I've never thought about including my car in my net worth. Do people include their furniture, pots and pans, silverware, etc. as well?

 

[bloom2708]

This is a remarkable question to me. I've never thought about including my car in my net worth. Do people include their furniture, pots and pans, silverware, etc. as well?

If you decide to have a "life garage sale", your furniture, pots, pans, stuff in the garage, stuff in the attic is likely worth something. If you include TVs, computers, smart phones, tablets, guns, art, you may have a pretty good amount tied up into those items. Is it easy to get the money out? Maybe or maybe not.

After a house, a car is likely most peoples largest expense. Yes, the value goes down, but a car worth $20k is certainly part of your net worth.

A pot may be worth $2, so your level of tracking might only go down to $1,000 or higher. Or have a bucket like "Household Items".

 

[MarieIG]

This is a remarkable question to me. I've never thought about including my car in my net worth. Do people include their furniture, pots and pans, silverware, etc. as well?

I don't include vehicles, personal property or pension/ SS income in net worth. I don't see the point.

Have I ever seen it done. Yes, acrimonious probate and divorce proceedings. In one probate matter, I recall seeing a toilet bowl brush being listed.

 

[COcheesehead]

This is a remarkable question to me. I've never thought about including my car in my net worth. Do people include their furniture, pots and pans, silverware, etc. as well?

Being a seller on eBay, I know there is a market for almost everything. We sell household stuff all the time, so yes, we include a category for household items in our net worth statement along with cars, the house, etc. If it can be liquidated, it’s an asset to us.
Our household category right now has a conservative estimate of $62,000. My wife’s cameras, our bikes, iPads, phones, jewelry, wine, outdoor toys…it adds up.

 

[Car-Guy]

This is a remarkable question to me. I've never thought about including my car in my net worth. Do people include their furniture, pots and pans, silverware, etc. as well?

"Most" new cars value drop thousands when you drive them off the lot and continue to devalue as time goes by and miles are driven.

Furniture, pots and pans, etc, resale values drop to "almost" nothing once they are at home and used. (Real silverware, maybe not so much) So no, I've never counted the value of household stuff, "except" when thinking about replacement cost for insurance purposes.

Even nice TV's and PC's are throwaway prices these days. In the last 6 mos, I bough a new big flat screen TV and a new HP laptop for a total price of about $700 (at the most)...

 

[Sunset]

If you decide to have a "life garage sale", your furniture, pots, pans, stuff in the garage, stuff in the attic is likely worth something. If you include TVs, computers, smart phones, tablets, guns, art, you may have a pretty good amount tied up into those items. Is it easy to get the money out? Maybe or maybe not.

......

I find people highly over-value all the stuff they own, unless a person has a Rembrandt on the wall, the entire household of used furniture can be sold for $1K -> $5K

I see online folks giving away for free china cabinets, couches, beds and bed frames, dining tables and chairs, paintings and art, etc...

It's hard to get the money out of these things, and many of the free things I see are after the people tried to sell them for around $100.

So I don't include house contents in net worth.

 

[Jerry1]

I don't include vehicles, personal property or pension/ SS income in net worth. I don't see the point.

Have I ever seen it done. Yes, acrimonious probate and divorce proceedings. In one probate matter, I recall seeing a toilet bowl brush being listed.

NW includes everything. All assets minus all liabilities. It does not include income streams unless they have a cash surrender value/option. However, as a practical mater, I don’t even include my house in my net worth. I just look at my cash and investable assets. If I had to do a balance sheet for say a loan or something, I’d include my house, get a Kelly Blue Book value for my car and make an educated estimate of my personal property. I don’t see having to do that in my future. The only reason I look at or think about my NW is when I think about inheritance to my two daughters and when I think about end of life care. As mentioned earlier, I’m going to have a nice car until I can no longer drive. It’s not likely I will ever think of it in terms of my NW no matter how defined.

 

[MarieIG]

NW includes everything. All assets minus all liabilities. It does not include income streams unless they have a cash surrender value/option. However, as a practical mater, I don’t even include my house in my net worth. I just look at my cash and investable assets. If I had to do a balance sheet for say a loan or something, I’d include my house, get a Kelly Blue Book value for my car and make an educated estimate of my personal property. I don’t see having to do that in my future. The only reason I look at or think about my NW is when I think about inheritance to my two daughters and when I think about end of life care. As mentioned earlier, I’m going to have a nice car until I can no longer drive. It’s not likely I will ever think of it in terms of my NW no matter how defined.

Thanks Jerry.

 

[PatrickA5]

This is a remarkable question to me. I've never thought about including my car in my net worth. Do people include their furniture, pots and pans, silverware, etc. as well?

NW is Assets less Liabilities. A fork is an asset. Might only get you 10 cents in a garage sale, but it's still an asset.

But, most people pick and choose what they want to include in THEIR definition of net worth. If I wanted to, I could say I don't include my investments in my Net Worth.

 

[Car-Guy]

NW includes everything. All assets minus all liabilities. It does not include income streams unless they have a cash surrender value/option.

So two guys (or gals) retire at 65, on the exact same day and both have a cash value in their personal accounts the day before retiring of $500,000. The first person takes the company retirement lump sum settlement for $1,000,000 and is now worth 1,600,000. (not counting taxes). The second person takes the company annuity w/o survivorship so they still have a net worth of $500,000. Correct?

 

[finnski1]

So two guys (or gals) retire at 65, on the exact same day and both have a cash value in their personal accounts the day before retiring of $500,000. The first person takes the company retirement lump sum settlement for $1,000,000 and is now worth 1,600,000. (not counting taxes). The second person takes the company annuity w/o survivorship so they still have a net worth of $500,000. Correct?

Well in my mind you are correct. You can't count future cash flow or NPV of that cash flow on something that expires when you do.

 

[finnski1]

Well the premise of the article seems to be what percentage of your net worth can you afford to pay for a new vehicle not what percentage is your present vehicle of your net worth. A subtle distinction. Most of us appear to have well loved vehicles worth a tiny % but that is not necessarily what we would go out and spend for a new one.
Either way I would not be comfortable at all spending 5% for a new vehicle or anything near that. But I am frugal

 

[Major Tom]

I keep meaning to sell my campervan, which I hope to get around to in the next few months. After I've done that, I'll be back to not owning a vehicle, which will be wonderful. I view vehicles as bills and liabilities on wheels.

When the campervan is sold, I'll be back to having just a bicycle for transport. It cost me $125 off Craigslist, and about $50 to fix up. Call it $200, to be absolutely sure. It will represent about 0.0001851852% of my net worth.

Lovely!

 

[Jimonlimon]

This is a remarkable question to me. I've never thought about including my car in my net worth. Do people include their furniture, pots and pans, silverware, etc. as well?

There's your net worth, then there's the amount that you consider useful for planning your expenditures and budget.

I don't count the roughly $750k in equity for our 2,000 square foot house in planning for expenditures. We need a place to live and unless we move out of our region the cost difference to downsize (after closing costs, moving costs, etc) would be very little.

I do consider the home equity in thinking about leaving something to our heirs or the potential for moving to a different region- As long as we avoid expensive metro areas our equity should be enough to buy a replacement with cash.

Cars? They're just a money pit. Old ones cost for repairs and maintenance, new ones cost a lot then depreciate quickly. The value of a new car is that you get a couple years break before spending much on repairs or another new car. "Collectable" cars my be an investment but most people I know who bought, restored, and sold classic cars (whatever that means) did it at either an outright net loss or if they made a paper profit their time, garage space, tools, etc. weren't part of the equation.