Cars percentage of net worth?

[Koolau]

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".

Back when I had nothing (literally) my car WAS my NW. Now, I don't even think of it as part of NW. BUT this is a good exercise. I think it's good to know what we value and % of NW may (or may not) be eye opening. We've done this exercise with house value as well, even though most do not include house value in NW.

Again, the exercise might be useful in evaluating our priorities while it really has nothing to do with NW as we here think of NW. YMMV of course.

 

[Koolau]

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.

Strike me dead if I'm lying: I had a direct report go back to court because the court had awarded his X the extra 1/2 cent in the property settlement. You can't make this stuff up! I've never heard of a couple with such an acrimonious divorce as this couple. And here's the really good part. They both w*rked at my Megacorp - same shift most of the time. So they saw each other in the cafeteria or between buildings on a regular basis.

Rest of the story is that this poor guy was a full blown alcoholic and from what I could observe was probably the lesser of the two's problems. Returning you now...

 

[Surewhitey]

We're at 1.1% for 2, but my 2012 Sienna is an asset as I'm coasting as a cabinet / custom furniture small biz too. Mileage is up to $.655 in 2023...

 

[kgtest]

We're at 1.1% for 2, but my 2012 Sienna is an asset as I'm coasting as a cabinet / custom furniture small biz too. Mileage is up to $.655 in 2023...

Gotta love that mileage deduction!

 

[5Miler]

Guess we are under achievers regarding automobiles. Our daily driver is my 2001 Silverado and DGF occasionally drives her 2002 Trailblazer with a combined value of well under $8K, even less per our insurance agents.

That is significantly under 1% of net worth. We are just not car people. I have 95,000 miles on my truck and DGF has 63,000 miles on her TB and both bought 22 years ago new. I will admit the paint job on my truck is looking a bit rough after 22 years parked outside in the Georgia sun. It won't easily fit in my garage so I don't bother. Her TB on the other hand looks like new.

 

[Amethyst]

It would not be a large fraction.

When Mr. A. and I owned a rental townhouse, we used to joke that the residents probably sneered at our little Ford Focus in the parking lot when we came to visit. Pairs of BMWs, Mercedes, and other expensive cars were common in the townhouse parking spaces (there were no garages). These were middle-class TH's. Many people appeared to have more $ in rolling metal than they did in the homes they lived in.

 

[Car-Guy]

^^^^
And yours was probably paid for!

 

[53anddone]

Cars are a consumable like boxes of cereal. They don't count in my net worth.

 

[ls99]

Don't know, don't care. All three are paid for.

 

[anothercog]

My personal rule for cars is that they should cost no more than 10% of gross income and they should be driven for at least 10 years. Needless to say, I drive old Hondas while my peers have luxury cars. I’d rather spend on vacations.

 

[m3bs]

I’m a car guy. Mine works out to about 8%…..

 

[MarieIG]

Strike me dead if I'm lying: I had a direct report go back to court because the court had awarded his X the extra 1/2 cent in the property settlement. You can't make this stuff up! I've never heard of a couple with such an acrimonious divorce as this couple. And here's the really good part. They both w*rked at my Megacorp - same shift most of the time. So they saw each other in the cafeteria or between buildings on a regular basis.

Rest of the story is that this poor guy was a full blown alcoholic and from what I could observe was probably the lesser of the two's problems. Returning you now...

I'm sure the cost of going back to Court - was worth every penny. If that got in front of a judge, I suspect he/ she would have been less than pleased . . .

 

[KarenF]

This is Interesting. I never looked at vehicles as a % of net worth. We are at 1.2%. 1 SUV, I small SUV. We keep our cars for 10 - 15 years and I go by Blue Book value. Our small SUV is a Subaru and Subaru is trying pretty hard to get us to trade it in, no thank you

 

[MC Rider]

We have a 98 Corolla, a 14 Kia Soul, and a 22 Suzuki SV650.
The bike is probably worth the most, but none are high $.
These are expenses, not part of our NW, imho.

 

[zippy2020]

How can a rapidly depreciating object ever be considered an asset even when brand-new and never driven?

 

[COcheesehead]

How can a rapidly depreciating object ever be considered an asset even when brand-new and never driven?

Lots of assets depreciate.

 

[m3bs]

How can a rapidly depreciating object ever be considered an asset even when brand-new and never driven?

Spend some time on BringaTrailer.com. Not all cars depreciate to nothing. A 1984 VW GTI sold last week for $34K. The air cooled Porsche market has gone crazy.

 

[Car-Guy]

How can a rapidly depreciating object ever be considered an asset even when brand-new and never driven?

Many vehicles bought new in the last two or three+ years are now worth considerable more than the original purchase price. Ex, I bought a truck back in 2021 for about $75k... Now, that same truck, even with ~20k miles on it, is going for $85 to $90k. Before that, I had a high end SUV that I drove about ~40k miles and I got my original purchase price back when I traded it.

 

[mojavesue]

How can a rapidly depreciating object ever be considered an asset even when brand-new and never driven?

I bought a 2021 Toyota Landcruiser Heritage edition new. Sold it after owning it a year for 5k more than I paid. Had I kept it I could get another 15k or more.

Our 1995 Toyota Landcruiser has gone up in value since we bought it. We paid 11k for it in 2016. Been offered 25k for it. We have a 98 Toyota Tacoma 4X4 V6 5 speed transmission. We've had several notes left on the windshield from prospective buyers! Paid 7500 for it 4 years ago. Could easily sell for 10k and thats after putting 30k miles on it. We keep the truck at our Vegas place to use when we are there. We typically dont buy new cars. Both of us are car people and have always done our own maintenance and repairs. We're also fans of the 2nd gen Prius. We're on our 3rd one, an 08 with 166k miles. These are fantastic cars that require minimal maintenance.

 

[USGrant1962]

How can a rapidly depreciating object ever be considered an asset even when brand-new and never driven?

Your net worth is your liquidation value TODAY. Your car has a blue book value today - you can trade or sell it for that value today. Hence it is an asset (you pick which KBB value you want to use, and subtract any car loan). And hopefully your car is worth more than your car loan so is actually an asset.

Tomorrow your car value may decline, and your house value may increase (or decrease), and your stocks may do whatever. Your net worth will be different tomorrow than it is today (if you use enough significant figures).

Net worth is a point in time - and it is always your assets minus your liabilities (all of them). Nothing more, nothing less. You can certainly round off, and neglect stuff that is +/- a small percentage of your NW. So, you can count your pennies any way you like, but if it is not total assets minus liabilities (today) it is not net worth.

Basically, if you die today your NW is what determines your estate tax liability. But it is also interesting for financial rules of thumb - though as pointed out in this thread those are very age-dependent.

 

[RobbieB]

Yeah, pretty simple. If it's worth something, it's an asset. Like it runs and you can sell it.

Now, on the other hand, if it's up on cinder blocks with a blown engine leaking oil on the driveway and all rusted out with water damage from the storms and the busted out windows...

Then it's a liability.

 

[Beachcomber]

This group is a pretty savvy bunch, but how many know what vehicle most high net individuals own? If you guessed a Ford pick up, you are right on the money. One caveat, many pick ups cost as much as a new MB or BMW.

The new pick ups are quiet, have good gas mileage (over 20 mpg HWY on a 2 ton), good acceleration while offering utilitarian advantages. And they also offer good accident protection.

 

[Amethyst]

I was in a very country restaurant in SC, where literally the entire parking lot seemed full of nothing but white pickups. Big ones, little ones, new ones, old ones.

The other guests (also very white in color, as am I, come to think of it) didn't look very high net worth, but maybe they were next-door millionaires.

This group is a pretty savvy bunch, but how many know what vehicle most high net individuals own? If you guessed a Ford pick up, you are right on the money. .

 

[Beachcomber]

I was in a very country restaurant in SC, where literally the entire parking lot seemed full of nothing but white pickups. Big ones, little ones, new ones, old ones.

The other guests (also very white in color, as am I, come to think of it) didn't look very high net worth, but maybe they were next-door millionaires.

Interesting. I wonder if you were in a farm/tobacco area?

What I notice now, vs 20 years ago, is most vehicles are suvs.

 

[Out of Steam]

Pairs of BMWs, Mercedes, and other expensive cars were common in the townhouse parking spaces (there were no garages). These were middle-class TH's. Many people appeared to have more $ in rolling metal than they did in the homes they lived in.

There's a satirical map of our city that came out some years ago. It labels a then-working class neighborhood of post-WWII frame houses (now popular with millennial buyers) as "Cars Worth More than Houses".