Too Broke To Pay Attention

Thoughts on personal finance and how to avoid having it take over your life

Is Bangernomics only for people who have money?

22 Feb 2015

If you’re not familiar with the term Bangernomics, it’s an idea I’ve encountered in the UK about buying cheap - like, really cheap - cars, drive them as long as possible and then get rid of them when they start breaking down too often. Ideally, if the cars are cheap enough, and you find a lot of really cheap cars in the UK, compared to say, the US, you substantially lower your cost of running a car. Of course it also helps if you are in a place that has reasonable public transport infrastructure so you’re not 100% dependent on a car in the first place.

Certain financial expert talk radio hosts recommend something like this over here in the US, too, as a way to help to get out of debt by buying a car for around $1000, concentrate on paying of your debt and then eventually as the cash flow permits, upgrade your car, always paying cash for the next car.

While I’m a big fan of paying cash for vehicles - even if I occasionally break that rule myself - my experience with a lot of cheaper cars here in the US is that you have to be pretty mechanically savvy too keep them running long enough to make owning them make financial sense. Most $1000 are pretty close to the end of their lives, so breakdowns are a matter of if, not when. Breakdowns usually aren’t very helpful when it comes to holding down a job so unless you can cycle to work or use some other means of transport when your cheapomobile breaks down, you end up having to have some sort of backup vehicle to get you to work in case the main vehicle breaks down.

If you have enough money to buy/insure/tax/register multiple vehicles, you may want to consider buying a single, better condition car and drive that into the ground while only having the expense of running a single vehicle. I think you still have to be reasonably mechanically savvy to make it work, but you tend to stand a better chance with, say, a $4000 Honda than four $1000 Hondas.

Of course if you like having multiple vehicles and don’t mind working on them, you’re welcome to ignore the advice.

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